Post on 14-Apr-2017
Service-Dominant Strategic Sourcing value creation versus cost saving
Laleh Rafati & Geert PoelsCenter for Service Intelligence
Department of Business Informatics and Operations Management
Enterprise Engineering
Enterprise Engineering (Viewing Enterprise as a System)
Teleological View(function & behavior)
Black-box Models White-box Models
Ontological View(construction & operation)
Outside –box Models
General System Theory (GST)
Modeling Approaches
Teleological View(function & behavior)
Black-box Models White-box Models
Ontological View(construction & operation)
Outside –box Models
Archimate 1.0DEMOe3valueArchimate 2.0Motivation Ext.
Business Model Canvas
Service Oriented Enterprise Engineering
Service Oriented Enterprise Engineering (Viewing Enterprise as Service System)
Teleological View(function & behavior)
Black-box Models White-box Models
Ontological View(construction & operation)
Outside –box Models
Viable Systems Approach (vSa)
Strategic Management (strategic Sourcing)
Procurement & Strategic Sourcing
- Procurement >> not a buying process- Strategic Sourcing >> not a cost function- Strategic Sourcing > > a critical area of strategic management
Strategic Sourcing as Tactical Spend Management
Define Category and Determine
Category Positioning
Determine Dependency Positioning
Identify Category’s Purchasing Strategies
Traditional steps of strategic sourcing
focus strongly on cost savings targets through applying spend analysis, supply market analyses and positioning techniques.
Complexity of Supply M
arket
Importance of Purchasing
Low
High
Low High
BOTTLENECK STRATEGIC
NON-CRITICAL LEVERAGE
High complexity/Few suppliersHigh complexity/Few suppliers
Low complexity/Many suppliersLow complexity/Many suppliers
High value/critical Items
High value/critical Items
Low value/Non-critical Items
Low value/Non-critical Items
Long-term CollaborationEnsoure Short-term Availability
Short-term Cost Leverage & Bidding
Short-term Functional Efficiency
Kraljic Purchasing Portfolio ModelFo
cus o
n 6
crite
ria o
f Por
ter’s
Fiv
e Fo
rces
Focus on Spend Cost
Buyer Pow
er
Supplier Power
Low
High
Low High
Interdependence=
Supplier Dominance<
Buyer Dominance>
Independence 0
LEVERAGE ALLIANCE
MARKET DEPENDENCY
Cox Power Portfolio Model
Focus on Performance Metrics
(Interdependence)BOTTLENECK
(Supplier Dominance)
(Buyer Dominance)(Independence)
STRATEGIC
NON-CRITICAL LEVERAGE
Strategy: Change nature of demand
4 Tactical Levers: Innovation
Breakthrough Risk Management
Technical Data Mining
Strategy: Seek joint advantage with supplier
4 Tactical Levers: Value Chain Management
Value Partnership Integrated Operation Management
Cost Partnership
Strategy: Manage Spend
4 Tactical Levers: Co-Sourcing
Commercial Data Mining Demand Management
Volum Bundling
Strategy: Leverage Competition among Suppliers
4 Tactical Levers: Tendering
Supplier Pricing Review Globalization Target Pricing
limited range of strategic sourcing options (only four sourcing strategies ‘cherry-pick’ strategic options and tactical levers from any of the quadrants;
and/or in the worst cases
Purchasing Chessboard
Strategic Sourcing as Value Driven Management
• Objective 1: Design a systemic view on strategic sourcing with emphasis on value creation to realize strategic sourcing as value driven management
• Objective 2: Develop a conceptual modeling language for the systemic exploration of strategic sourcing alternatives towards both cost saving and value creation targets
Research Approach
Way of Thinking
Way of Modeling Way of Working
Way of Supporting
Service eco-System Thinking
C.A.R.S Modeling Language and Method
Computer-aided Design Tool
Model based Analysis Approach
Seligmann et al., 1989Analyzing the structure of IS methodologies, an alternative approach
Service-Dominant Strategic Sourcing
• A systemic view on strategic sourcing emphasizes on value creation
• We propose a service ecosystem perspective for strategic sourcing as a systemic view based on the Viable Systems Approach (vSa) and Service-Dominant Logic (S-D Logic)
Strategic sourcing: a strategic process for organizing and fine-tuning the focal firm’s resources, competencies and capabilities internally and externally through A2A interactions with suppliers, buyers, internal and external customers to deliver value, in order to achieve (sustainable) competitive advantage or survivability.
C.A.R.S – a conceptual modeling language
Capability(service system)
Service
Resource base
Actor
to provide
to integrate
the configuration of
Asset(operand resource)
Competency(operant resource)
to exchange
owner
the application of
to interact
Cost Down KPIs
Value Driven KPIs
What an actor Can do
What an actor Does
Who is the resource Integrator
What an actor Has
C.A.R.S. Meta Model
Case study: Proof of Concept Demonstration
Determine Capability Positioning
Determine Dependency Positioning
Identify Capability Sourcing Strategies
C.A.R.S
Value Driven Strategic Sourcing
focus is on value-driven strategic sourcing of capabilities
Step 1: Determine capability positioning
C.A.R.S model of UZ Gent IT capabilities
Step 1: Determine capability positioning
Capability portfolio matrix of UZ Gent
Step 2: Determine (Buyer-Supplier) Dependency Positioning
C.A.R.S dependency model between UZ Gent and Agfa Healthcare
Step 2: Determine (Buyer-Supplier) Dependency Positioning
UZ Gent - Suppliers dependency matrix
Step 3: Identify capability sourcing strategies
UZ Gent capability sourcing portfolio
C.A.R.S Modeling Language 1. Focusing on procurement and strategic sourcing
2. Enabling companies to support procurement data management and analytics competencies for fact-based decision-making
3. Providing a rigorous analysis considering both cost-saving KPIs and value-driven KPIs in strategic sourcing
4. Modeling both performance-related and (strategic) functional dimensions of value chain actors (e.g. buyer, supplier and focal firm) to achieve long-term and short-term sourcing objectives
Thanks for your attention