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Unformatted text preview: Purchasing strategies/development Types of Strategies Supply Base Optimization, TQM of Suppliers, Global Sourcing, Long-Term Supplier Relationship, Early Supplier Design Involvement, Supplier Development Total Cost of Ownership and E-Reverse Auctions (e-RAs) Development Process Step 1: Define Business Unit Requirements Step 2: Define the Strategic Importance of the Purchasing Requirement (Portfolio Analysis Exhibit 6.4) Transaction/Price Quadrant (MRO) Bottleneck/Problem Quadrant Leverage Quadrant Strategic Quadrant Step 3: Determine Business and Purchasing Requirements and Conducting Supply Management Research Step 4: Set Goals and Conduct Gap Analysis Step 5: Develop Sourcing Strategy Objectives Step 6: Execute the Strategy Step 7: Monitor Results and Review Performance Evaluation of supplier’s capabilities/criteria of selection • Quiz question – “One of the most important processes that organizations perform is the evaluation, selection and continuous measurement of suppliers .” • Quiz question – “Regardless of the approach employed, overall the objective of the evaluation process should be to reduce purchase risk and maximize overall value to the purchaser .” The Supplier Evaluation and Selection Process • Quiz question – “no exceptions” 1. Recognize the need for supplier selection. 2. Identify key sourcing requirements. 3. Determine sourcing strategy. Single versus multiple sources, short-term versus long-term purchase contracts, selecting suppliers that provide design support versus those that lack design capability, full services versus non-full service suppliers, domestic versus foreign suppliers and expectation of a close working relationship versus arm-length purchasing 4. Identify potential supply sources. Current, sales representatives, information databases, experience, trade journals, trade directories, trade shows, second-party or indirect information, internal sources and internet searches 5. Limit suppliers in selection pool. Financial risk analysis, evaluation of supplier performance, and evaluation of supplier- provided information 6. Determine method of supplier evaluation and selection. Evaluation of supplier-provide information, supplier visits, use of preferred suppliers and external or third-party information 7. Select supplier and reach agreement. Evaluation Criteria • Quiz question – “not limit suppliers in selection pool” Management Capability, Employee Capabilities, Cost Structure, Total Quality Performance, Systems and Philosophy, Process and Technological Capability, Environmental Regulation Compliance, Financial Stability, Production Scheduling and Control Systems, E-Commerce,...
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This note was uploaded on 06/24/2008 for the course SCM 355 taught by Professor Pearson during the Spring '08 term at ASU.
- Spring '08