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SCM 355 Important Concepts Chapter 6

SCM 355 Important Concepts Chapter 6 - SCM 355 Important...

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SCM 355 Important Concepts Chapter 6 (Purchasing and Commodity Strategy Development) Linking Purchasing and Corporate Strategy: The strategy of an organization is a conceptualization of: Long-term objectives and purposes of the organization (Exhibit 6.1) Broad constraints and policies that restrict activities A current set of action plans (also know as tactics) and near-term goals expected to help achieve an organization’s objectives Translating Corporate Objectives into Purchasing Goals Four major dimensions: time frame, measurement, specificity and focus Integrative Strategy Development Corporate strategies, Business unit strategies, Purchasing strategies and Commodity strategies Translating Purchasing Objectives into Purchasing Goals Cost-reduction, Technology/New product development, Supply-base reduction, Supply assurance and Quality objectives Bring Goals and Objectives Together—the Purchasing Strategy Development Process Step 1: Define Business Unit Requirements Step 2:
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