Strategic Sourcing Management

Personal Action Planning

Name:……………………………………………………… Date:………………….

Setting the stage

Strategic Sourcing Management – process overview

Content Covered and Personal implication Key Concept

Process

Initiation

Situation

Analysis

Strategy Creation

and Approval

Strategy

Implementation

Define Sourcing Group

Categories

Identify Business

Requirements

Collect Data

Analyse Data

Validate Opportunity

Analysis

Generate Charter

Form Team

Terms of Reference

Establish Project

Management

Perform Strategic

Analysis

Generate Options

Evaluate Options and

choose a Strategic

Approach

Document Source Plan

Strategy Approval

Create Implementation

plan

Conduct Negotiations

Secure agreement and

Contract

Obtain Implementation

Approval

Continuous Improvement

Supplier Assessment

Development and Performance Mgt

Negotiations and Contract reviews

Supplier Reviews

Supplier Management

Supply Chain Improvement

Risk and Vulnerability Management

Supply Management

Value Engineering

Value Analysis

Pre-Sourcing

Quality Management Tools

Specification Management

Continuous Review

Six Core Concepts

Breakthrough Thinking

Content Covered and Personal implication Key Concept

Leader: Date:

Problem Definition: Team:

Current Situation

Targets:

Proposals:

Project Charther

Introduction to Stage 1Generate Charter and Form Team• STP

Content Covered and Personal implication Key Concept

Team Charter

Sourcing Group/Category Team Name:

Purpose:

Sourcing Group/Category Team Leader:

Responsibilities:

Sourcing Group/Category Boundaries:

Includes:

Excludes:

Sourcing Group/Category Team Members:

Extended Team Members:

Sourcing Group/Category Sponsor:

Responsibilities:

Sourcing Group/Category Team Member Responsibilities:

Extended Team Member Responsibilities:

Sourcing Group / Category Sponsor Expectations (ie targets, constraints, budgets, milestones, team members' time commitments):

Facilitator:

Responsibilities:

• SSP team Kick Off• 3P Agenda Decision Log

Stakeholder / Costituency Mapping

Content Covered and Personal implication Key Concept

Who Role Location Interest/Role Label

Topic Purpose Process Payoff Timing

Terms of Reference & Process Management• Terms Of Reference

Action Planning

Content Covered and Personal implication Key Concept

Action

Number

What Has To

Be Done

With

Whom

How It Will

Be Done

By

When

Expected

Results

•

•

•

••

Team size •

Team Location• .

Team Disciplines•

Objectives

Benefits

Scope

IssuesKey Milestones

Team Structure

To Whom What Method Frequency ActionCommunication Planning

Introduction to stage 2Data Gathering• Business Requirement Analysis

Content Covered and Personal implication Key Concept

Area 1 year 3 years 5 years 10 years

A

Q

S

C

I

R

Prioritising Business Requirements

example

Content Covered and Personal implication Key Concept

Assurance of Supply

Regulatory Compliance

Quality

Service

Cost

Innovation

RFI

Develop and analyse Data• Stroryboard

Content Covered and Personal implication Key Concept

Facts and Data

Information Gaps

Business Requirements

Quick Wins

Strategic options Evaluation

Conclusions

Provide detailed support

How do we answer ?Who do we answer ?

How do we check/validate?Needs Vs wants ?How do we quantify

Develop action plans

Capture for long/mediumterm strategic evaluation

Yellow

Green

Orange

Blue

Purple

Pink

Post-It Use for: Action required:

Quick Wins

Price model

Content Covered and Personal implication Key Concept

Business

Impact

Big

Pay off

GemsExtra Effort

Small

Pay Off

Quick Hits Caution

Easy ToughEase of

Implementation

Seller Buyer

Value

What is the value to us? What is the value to us?

What is the value to them? What is the value to them?

Budget

What is our budget? What is our budget?

What is their budget? What is their budget?

Target

What price do we have to design it for? What do we want to pay?

Competition

What will our competitors charge? How do we create competition?

Cost

What are our costs? What should it cost them?

Greed

What can we get them to pay? What can we get them to accept?

Day one Analysis

exercise

Content Covered and Personal implication Key Concept

Tailored

ProprietaryCustom

GenericMany

Suppliers

One

One Customers Many

Introduction to stage 3Strategic analysisPorter’s five Force

Portfolio Analysis

Content Covered and Personal implication Key Concept

Industry

Competitors

Intensity

Of Rivalry

Industry

Competitors

Intensity

Of Rivalry

Suppliers

Bargaining power

Suppliers

Bargaining power

Substitu

tes

Scope fo

r substitu

tes

Substitu

tes

Scope fo

r substitu

tes

Potential

Entrants

Scope fo

r entra

ntsPotential

Entrants

Scope fo

r entra

nts

Buyers

Bargaining power

Buyers

Bargaining power

Industry

Competitors

Intensity

Of Rivalry

Industry

Competitors

Intensity

Of Rivalry

Suppliers

Bargaining power

Suppliers

Bargaining power

Substitu

tes

Scope fo

r substitu

tes

Substitu

tes

Scope fo

r substitu

tes

Potential

Entrants

Scope fo

r entra

ntsPotential

Entrants

Scope fo

r entra

nts

Buyers

Bargaining power

Buyers

Bargaining power

High

Low

HighLow

Market

Difficulty /

Risk

Relative Spend /

Profit Impact

Critical Strategic

Acquisition Leverage

portfolio

Supplier relationship mapping

Content Covered and Personal implication Key Concept

Procurement considerations: Buyer strong In balance Supplier

strong

1. Number of suppliers acceptable High Low

2. Production or service capacity currently available

in the market for suitable suppliers

High Low

3. Existing share of shortlist sup pliers’ current

capacity

High Low

4. Demand growth for product or service required High Low/None

5. Substitution possibilities Exist None

6. Knowledge or product cost breakdown within a

market context

Extensive Poor

7. Knowledge of supplier s’ pricing policies Yes No

8. Supply logistics (geographical or transport

considerations)

Advantageous Disadvantageous

9. Attractiveness to relevant suppliers Strong Weak

10. Barriers hindering a change of supplier Insignificant Significant

Supplier preferencing

SWOT Analysis

Content Covered and Personal implication Key Concept

High

Low

HighLow

Attractiveness

of

Account

Relative Value of

Business

Development Core

Nuisance Exploitable

Strengths

Opportunities

Weaknesses

Threats

a

Strategic Option• Option generation

Content Covered and Personal implication Key Concept

Generate as many options as possible from team members

Group ideas together and summarise each grouping into a possible strategic option

Agree actions required to further define value, cost, difficulty and risk of each strategic option group prior to options evaluation

Form a number of strategic options groupings by combining several options to form a layered option (ie option 1 followed by option 3 etc)

Estimate the likely value, cost, difficulty and risk against each option grouping

Decison Making• Option Evaluation

Source plan Generation and Approval• Source plan Generation

Content Covered and Personal implication Key Concept

Weighting Option 1 Option 2

Criteria Rate Score Rate Score

The benefit must be greater than £120,000 Go/No go Go No go

The resources should be restricted to manufacturing Go/No go Go

The benefit must be delivered in a 12 month time scale 10 3 30

No specification changes 8 8 64

Existing suppliers should be used 6 0 0

The difficulties should be no greater than medium 4 4 16

Total 110

Strategy Approval

exercise

Content Covered and Personal implication Key Concept

Introduction to Stage 4Create Implementation Plan• Implementation Planning

Conduct negotiationsNegotiation planning

Content Covered and Personal implication Key Concept

RFI RF

Q

Financial

Analysis

of Quotations

Negotiati

on

Events

Agreeme

nt

Conditionin

g

Conditionin

g

Supplier conditioning

RFP/RFQ

Content Covered and Personal implication Key Concept

Co

nti

nu

ou

s S

up

pli

er

Co

nd

itio

nin

g

Supplier

Conditioning PointsTotal Supply Market

Issue RFI

Many

Suppliers

Major

conditioning

opportunity

Issue

RFQ

Few

Suppliers

Major

conditioning

opportunity

Major

conditioning

opportunity

Future Suppliers

Stage

1: Process Initiation

2: Situation Analysis

4: Strategy Implementation

Bidding process

Contract Development and Management

Content Covered and Personal implication Key Concept

Intellectual Property Rights

Assignment/Delegation

Confidentiality

What: Contract: For:Key Clauses Analysis Comments/Implications ActionsTermination PeriodVolume CommitmentsContingent LiabilitiesPenaltiesInventory

Set off

WarrantiesPurchasers Property

InformationEquipment Buy BackEnvironmental ClausesPaymentLaw and Jurisdiction

Does it meet current business requirements

Secure agreement/contract

Contract Development and Management

Content Covered and Personal implication Key Concept

Implementation

Managing the change- Success model

Content Covered and Personal implication Key Concept

Indroduction to stage 5KPI’s

Supplier Feedback

Content Covered and Personal implication Key Concept

Supplier performance

Value Analysis

Content Covered and Personal implication Key Concept

Supplier roadmapping

Fmea

Content Covered and Personal implication Key Concept

Contingency Planning

Supplier Management

Content Covered and Personal implication Key Concept

Monitor and Measure improvementSupplier Review

Finalization

Content Covered and Personal implication Key Concept

a

a

Content Covered and Personal implication Key Concept