supply chain management.docx

Acquisition strategy is developed usually during the

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Acquisition strategy is developed usually during the front end of the acquisition life cycle. It provides the integrated strategy for all aspects of the acquisition program throughout the program lifecycle. The acquisition process is a high-level business and technical management approach designed to achieve program objective within specified resources constraints. It serves as the framework for organizing, controlling, staffing leading a program and establishing the appropriate contract mechanism. Acquisition strategy provides a master schedule for research,
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PROCUREMENT 4 development, testing, production, fielding and other system engineering related activities essential for program success as well as for formulating functional strategies and plans. There are seven models along the souring continuum which include basic provider, approved provider, preferred provider, performance-based or managed service model, vested business model, shared service model and equity partnerships ( Walsh, 2016). A basic provider model is transaction-based. It has a set price for individual products and services for which there is a wide range of standard market options. These goods are readily available, with little differentiation in them. An approved provider model uses a transaction-based approach where products and services are purchased from prequalified suppliers that meet specific performance or other selection criteria. The preferred provider model also uses a transaction based economic model. The significant difference between the preferred provider and the other transaction-based models is that the customer has chosen to make a relationship with the supplier where there is a chance for the supplier to add value to the buyer's business to achieve strategies objectives. Performance based or managed service model is generally a formal, longer-term supplier agreement that combines a relational contracting model with an output-based economic model. It seeks to drive supplier accountability for output-based service-level contracts and targets of cost reduction. A vested sourcing business model is an advanced combination of an outcome-based economic and a relational contracting model. Companies enter into highly collaborative arrangements designed to create and share value for buyers and suppliers above and beyond. A shared service model is an internal organization based on an arm’s-length outsourcing arrangement ( Hugos, 2018). Using this approach, processes are often centralized into a single sign-on that charges business units or users for the services they use. An equity partnership creates a legally binding entity-it can take different legal forms, from buying a supplier to
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