strategic sourcing

strategic sourcing - Common operating procedures 5...

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1 Strategic Sourcing Sept 8, 2010
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Initial Questions What is hallowing out of a firm? Can you think of an example of hallowing out? 2
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Hallowing Out Outsourcing most of the value added functions Design, Mfg, distribution etc Nike Retains design but outsources the rest Boeing Dreamliner Significant portion of assembly outsourced Glitches in outsourced modules 3
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Observations Large companies face “NIH” (Not invented here) syndrome No basis to distinguish strategic from tactical Outdated cost accounting systems Decisions based on ease of handling rather than strategic (differentiation in eyes of the customer) 4
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Architectural knowledge Combustion recipe Translating customer requirements into product and process parameters Could be key to sources of differentiation Boeing and wing design Applicable to service firm as well
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Unformatted text preview: Common operating procedures 5 Strategic Sourcing Model Like parts Like processes Parts family Common sourcing as a group Eliciting employee commitment to close the capability gap is interesting 6 Generalizable To the extent that is based on core competencies, yes Parts are similar to tasks 7 Vendor Managed Inventory Vendor takes over management of inventory for customer Kitting operations Baxter Health care 8 Reasons for VMI Process efficiencies Core competencies Pros: Cost savings, cycle time savings; enables focus on core competencies Cons: Expensive implementation; heavily hinged on coordination; does not fit into all contexts 9 Characteristics Inventory Transparency 3 rd party warehouse Schedule sharing ERP systems 10...
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