Approach and implementation of single sourcing Abhirup Das (09BM8002) Debesh Majumdar (09BM8016) Devdut Saha (09BM8083) Su...
Contents <ul><li>Hindrances </li></ul><ul><li>Characteristics of single source </li></ul><ul><li>From multiple to single s...
Hindrances  <ul><li>May lead to corruption (govt. organizations) </li></ul><ul><li>Requires large purchase volume </li></u...
Characteristics of single source <ul><li>Motivated & committed </li></ul><ul><li>Flexibility in production </li></ul><ul><...
From multiple source to single source <ul><li>Identification of materials to single source </li></ul><ul><li>Identificatio...
Identification of materials: Product Portfolios <ul><ul><li>Portfolio analysis is used to develop sourcing strategy </li><...
Analysis of Portfolios Purchase Category Features Routine Items <ul><li>More number of suppliers available </li></ul><ul><...
Selection Criteria for Single Sourcing  Not-so-significant attributes: Product : Ease of operation Impact on energy utiliz...
Selection Criteria for Single Sourcing <ul><li>Selection criteria must fulfill objective business decisions  (e.g. leverag...
Upcoming SlideShare
Loading in...5
×

Single Source

700

Published on

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
700
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Single Source"

  1. 1. Approach and implementation of single sourcing Abhirup Das (09BM8002) Debesh Majumdar (09BM8016) Devdut Saha (09BM8083) Sujeeth Ungratwar (09BM8097) VGSoM, IIT Kharagpur
  2. 2. Contents <ul><li>Hindrances </li></ul><ul><li>Characteristics of single source </li></ul><ul><li>From multiple to single source </li></ul>
  3. 3. Hindrances <ul><li>May lead to corruption (govt. organizations) </li></ul><ul><li>Requires large purchase volume </li></ul><ul><li>High skill requirement of supplier </li></ul><ul><li>Long time required for vendor development </li></ul><ul><li>Total reliance on the supplier. Supplier setbacks can affect the purchaser </li></ul>
  4. 4. Characteristics of single source <ul><li>Motivated & committed </li></ul><ul><li>Flexibility in production </li></ul><ul><li>Innovation capabilities </li></ul><ul><li>Should be capable of taking the manufacturing of other parts </li></ul><ul><li>Should be able to reduce the cost of production continuously over time </li></ul>
  5. 5. From multiple source to single source <ul><li>Identification of materials to single source </li></ul><ul><li>Identification of the vendors </li></ul><ul><ul><li>Present capability </li></ul></ul><ul><ul><li>Future potential </li></ul></ul><ul><li>Vendor development </li></ul><ul><ul><li>Technical </li></ul></ul><ul><ul><li>competitiveness </li></ul></ul><ul><li>Support to the vendor </li></ul><ul><ul><li>Emotional/handholding </li></ul></ul><ul><ul><li>Information/know how </li></ul></ul><ul><ul><li>Financial </li></ul></ul><ul><ul><li>Technical </li></ul></ul><ul><ul><li>Market </li></ul></ul>
  6. 6. Identification of materials: Product Portfolios <ul><ul><li>Portfolio analysis is used to develop sourcing strategy </li></ul></ul><ul><ul><li>Considerations: Product complexity, supply market economic factors, </li></ul></ul><ul><ul><li>image factors such as brand and safety </li></ul></ul>
  7. 7. Analysis of Portfolios Purchase Category Features Routine Items <ul><li>More number of suppliers available </li></ul><ul><li>Very short term supplier relationship </li></ul><ul><li>Supplier Monitoring </li></ul><ul><li>Simplification and automation of purchasing procedure </li></ul><ul><li>Delegation of decision making power to lower level of management </li></ul>Bottleneck Items <ul><li>Monopolistic supplier market </li></ul><ul><li>Long term supplier relationship </li></ul><ul><li>Security of inventories </li></ul><ul><li>Internally develop alternatives </li></ul><ul><li>Contingency planning </li></ul><ul><li>Delegation of decision making power to higher level of management </li></ul>Leverage Items <ul><li>More number of suppliers available </li></ul><ul><li>Short term supplier relationship </li></ul><ul><li>Exploitation of full purchasing power </li></ul><ul><li>Delegation of decision making power to medium level of management </li></ul>Strategic Items <ul><li>Few suppliers are available </li></ul><ul><li>Medium/ long term supplier relationship </li></ul><ul><li>Detailed evaluation of suppliers </li></ul><ul><li>Supplier development efforts </li></ul><ul><li>Delegation of decision making power to top level of management </li></ul>
  8. 8. Selection Criteria for Single Sourcing Not-so-significant attributes: Product : Ease of operation Impact on energy utilization Cost of service contract Availability: Breadth of product line Geographic proximity Warranties Dependability: Ability to keep delivery promise Price : Low price *Adopted from “Preferences for Single Sourcing and Supplier Selection Criteria” by Cathy Owens Swift, GEORGIA SOUTHERN UNIVERSITY
  9. 9. Selection Criteria for Single Sourcing <ul><li>Selection criteria must fulfill objective business decisions (e.g. leveraged volume purchase contracts, standardization programs/systems, parts/service provided by an &quot;original equipment manufacturer&quot;, consistency of quality/batch control, &quot;just in time&quot; delivery requirements etc). </li></ul><ul><li>Another objective can be developing a &quot;co-maker&quot; relationship, or one in which the supplier is considered an upstream extension of the customer's business. </li></ul><ul><li>Quality aspect(Deming’s 4 th point): &quot;End the practice of awarding business on price tag alone. Instead, minimize total cost by working with a single supplier.” </li></ul><ul><li>Single source selection based purely on personal preference or subjective rationale will not be sanctioned. </li></ul>

×