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[object Object],[object Object],[object Object],[object Object]
.  Sourcing :   the fundamental aspects of sourcing is    supplier selection (for a commodity class identified by spend analysis)  using one of many negotiation techniques (such as RFx, auctions etc).   Once the suppliers are selected the relationship with the selected suppliers is then managed through the negotiated contracts.  dEfinitions
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[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Purchasing These activities are the routine activities related to issuing purchase orders for needed products     There are two types of products that a  company buys  : ,[object Object],[object Object],The mechanics of purchasing both types of products are largely the same
Ch allenges   ,[object Object],[object Object],[object Object],[object Object]
Consumption Management    Understanding of how much of what categories of products are being  bought across the entire company  as well as by each operating unit.    There must be an understanding of how much of what kinds of products are  bought from whom and at what prices.
Vendor Selection There must be an ongoing process to define the procurement capabilities needed to  support the company ’ s business plan and its operating model. This definition will provide insight into the relative importance of vendor capabilities.  The value of these capabilities have to be considered in addition to simply the price of a vendor ’ s product.  The value of product quality, service levels, just in time delivery, and technical support  can only be estimated in light of what is called for by the business plan and the company ’ s operating model.
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Contract Negotiation A core ingredient of sourcing is  negotiation  with suppliers and executions  of the resulting contract.    Understanding of how much of what categories of products are being  bought across the entire company  as well as by each operating unit.    The simplest negotiations are for contracts to purchase indirect products where suppliers are selected on the basis of lowest price.  The most complex negotiations  are for contracts to purchase direct materials  that must meet exacting quality  requirements and where high service levels and technical support are needed.
CAPABILITIES ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
RF x ,[object Object],[object Object],[object Object],[object Object]
Protocols (aka Auctions) A typical flow for negotiation is to get a bid response to the RFQ  from the suppliers and choose the appropriate bid/s that satisfy the  requirements of the purchase at minimum cost.
Contract Management    A company needs the ability to track the performance of its suppliers and  hold them accountable to meet the service levels they agreed to in their contract    Routinely collect data about the performance of suppliers.      Any supplier that consistently falls below requirements should be made  aware of their shortcomings and asked to correct them.
Decision Support for Bid Evaluation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Multi-Attribute Bids    Factors related to the product specification such as price, material quality  and properties, color and size      Factors related to the service specification such as delivery time and cost,  and warranty      Supplier qualification factors such as trading history, experience and reputation.
Bundled “All-or-Nothing” Bids While negotiating prices for procuring, say, weekly demand, it is advantageous  to aggregate demand over several locations and plants, because this leads to a  larger transaction.  An additional advantage is that suppliers can provide a discounted bid on a  bundle because they might have excess inventory in a local warehouse or spare  capacity in the carrier and hence can reduce transportation costs .
Volume Discount Bids ,[object Object],[object Object],[object Object],[object Object],[object Object]
Support Functions ,[object Object],[object Object],[object Object],[object Object],[object Object]
Document Management ,[object Object],[object Object],[object Object],[object Object]
Project Management ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Market Intelligence A variety of external information helps category managers and other  purchasing staff members perform their jobs.  This external information includes commodity prices, supplier news,  company news, and market intelligence such as industry news and reports.  Market intelligence needs to be provided as a sourcing workbench  as the first  page upon logging into the system.
Collaboration &  Workflow In addition to negotiating and communicating with multiple suppliers,  category managers must collaborate with many people across the enterprise  such as  Engineering  for technical specifications,  Manufacturing  for scheduling  and inventory concerns,  Legal  for contractual terms and conditions, etc.
SUPPLY CHAIN & CRM ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
 
Convergence between CRM & SC ExAmples ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
SUPPLY CHAIN & sRM Today, t he most big challenge is the total integration of supply chain. By including Supplier Relationship Management “SRM”  (like CRM)  we will achieve that goal. SCEM (Supply Chain Executive Management) helps the firm to manage  all the events during the phases of production and distribution.
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
CONCLUSION This chapter provided an overview of the various functionalities that are  required for procurement and sourcing for an enterprise.   ,[object Object],[object Object],www.fadelexpert.ici.ma

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Sourcing & SRM

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  • 3. . Sourcing : the fundamental aspects of sourcing is  supplier selection (for a commodity class identified by spend analysis) using one of many negotiation techniques (such as RFx, auctions etc).  Once the suppliers are selected the relationship with the selected suppliers is then managed through the negotiated contracts. dEfinitions
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  • 8. Consumption Management  Understanding of how much of what categories of products are being bought across the entire company as well as by each operating unit.  There must be an understanding of how much of what kinds of products are bought from whom and at what prices.
  • 9. Vendor Selection There must be an ongoing process to define the procurement capabilities needed to support the company ’ s business plan and its operating model. This definition will provide insight into the relative importance of vendor capabilities. The value of these capabilities have to be considered in addition to simply the price of a vendor ’ s product. The value of product quality, service levels, just in time delivery, and technical support can only be estimated in light of what is called for by the business plan and the company ’ s operating model.
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  • 11. Contract Negotiation A core ingredient of sourcing is negotiation with suppliers and executions of the resulting contract.  Understanding of how much of what categories of products are being bought across the entire company as well as by each operating unit.  The simplest negotiations are for contracts to purchase indirect products where suppliers are selected on the basis of lowest price. The most complex negotiations are for contracts to purchase direct materials that must meet exacting quality requirements and where high service levels and technical support are needed.
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  • 14. Protocols (aka Auctions) A typical flow for negotiation is to get a bid response to the RFQ from the suppliers and choose the appropriate bid/s that satisfy the requirements of the purchase at minimum cost.
  • 15. Contract Management  A company needs the ability to track the performance of its suppliers and hold them accountable to meet the service levels they agreed to in their contract  Routinely collect data about the performance of suppliers.  Any supplier that consistently falls below requirements should be made aware of their shortcomings and asked to correct them.
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  • 17. Multi-Attribute Bids  Factors related to the product specification such as price, material quality and properties, color and size  Factors related to the service specification such as delivery time and cost, and warranty  Supplier qualification factors such as trading history, experience and reputation.
  • 18. Bundled “All-or-Nothing” Bids While negotiating prices for procuring, say, weekly demand, it is advantageous to aggregate demand over several locations and plants, because this leads to a larger transaction. An additional advantage is that suppliers can provide a discounted bid on a bundle because they might have excess inventory in a local warehouse or spare capacity in the carrier and hence can reduce transportation costs .
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  • 23. Market Intelligence A variety of external information helps category managers and other purchasing staff members perform their jobs. This external information includes commodity prices, supplier news, company news, and market intelligence such as industry news and reports. Market intelligence needs to be provided as a sourcing workbench as the first page upon logging into the system.
  • 24. Collaboration & Workflow In addition to negotiating and communicating with multiple suppliers, category managers must collaborate with many people across the enterprise such as Engineering for technical specifications, Manufacturing for scheduling and inventory concerns, Legal for contractual terms and conditions, etc.
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  • 30. SUPPLY CHAIN & sRM Today, t he most big challenge is the total integration of supply chain. By including Supplier Relationship Management “SRM” (like CRM) we will achieve that goal. SCEM (Supply Chain Executive Management) helps the firm to manage all the events during the phases of production and distribution.
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