Logistics & Supply Chain Management(LSCM)- Sourcing Decisions& Transportation in Supply Chain- MBA

1. A Presentation on The
Logistics & Supply Chain Management(18MS04T1)
4th Unit: Sourcing, Transporting& Pricing Products
2nd Mid Topic: Sourcing Decisions& Transportation in Supply Chain
Presented by:
Immani Chandra Shekar
(Reg. No: 19K61E0020)
MBA -II

2. Sourcing Decisions in Supply Chain:
Sourcing is the whole set of business processes, which is necessary to buy goods and services
required by the Supply Chain. Most important decision for a supply chain function is whether
it is feasible to
 Perform the function by In-house or
 Outsource or
 Offshoring.

3. Sourcing Processes :
Sourcing processes involves :
Supplier Scoring & Assessment
Supplier Selection & Contract Negotiation
Design Collaboration
Procurement Process
Sourcing planning and analysis

4. 1. Supplier Scoring &Assessment:
 Supplier performance should be compared on the basis of the supplier’s impact on total cost.
 There are several other factors besides purchase price that influence total cost
2.Supplier Selection-Auctions and Negotiations:
 Supplier selection can be performed through competitive bids, reverse auctions, and direct
negotiations .
3.Design Collaboration:
 Design collaboration with suppliers can result in reduced cost, improved quality, and
decreased time to market.
 80 percent of the cost of a purchased part is fixed in the design phase
 50-70 percent of spending at a manufacturer is through procurement

5. 4.Procurement of Process:
 The process in which the supplier sends product in response to orders placed by the buyer.
 Goal is to enable orders to be placed and delivered on schedule at the lowest possible overall cost.
 Focus for direct materials should be on improving coordination and visibility with supplier.
 Focus for indirect materials should be on decreasing the transaction cost for each order .
 Procurement for both should consolidate orders where possible to take advantage of economies of
scale and quantity discounts.
5.Sourcing planning and analysis:
 A firm should periodically analyse its procurement spending and supplier performance and
use this analysis as an input for future sourcing decisions.
 Supplier performance analysis should be used to build a portfolio of suppliers with
complementary strengths.

6. Benefits of Effective Sourcing Decisions:
 Better economies of scale can be achieved if orders are aggregated.
 More efficient procurement transactions can significantly reduce the overall cost of
purchasing.
 Design collaboration can result in products that are easier to manufacture and
distribute, resulting in lower overall costs.
 Good procurement processes can facilitate coordination with suppliers.
 Appropriate supplier contracts can allow for the sharing of risk.
 Firms can achieve a lower purchase price by increasing competition through the use of
auctions.

7. Transportation in Supply Chain:
 Transportation refers to the movement of
product from one location to another as it
makes its way from the beginning of
supply chain to the customer.
 Transport is important because it enables
trade between people, which is essential
for the development of civilizations.

8. Role of Transportation in Supply Chain:
 Transportation is the physical link connecting
the firm to its suppliers and customers.
 Transportation is an important supply chain
driver because products are really not produced
and consumed at same location.
 Transportation also adds value to the product
by providing in time and Right place.
 As firms engage in global competition,
transportation costs are becoming even more
significant.

9. Factors Influencing Transportation:

10. Challenges in Transportation:

11. Conclusion:
 Sourcing Decision In Supply Chain brings efficiency and effectiveness in the system of
purchases followed by the management & thereby assisting in carrying out the process of
manufacturing.
 Transportation plays very important role in the supply chain to distribute the goods from
one place to the another place by considering the 3 elements i.e. Cost, Speed&
Consistency by management.

12. Department of Management Science
Thank You Sir
2020-2021