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Strategic Sourcing Spend SEGMENTATION, Cross Functional TEAMS, ANALYSING: TCO / Lifeycle Costs, Supplier Market, Item Characteristics and Supplier Costs. OPPORTUNITY Brainstorming, Sourcing STRATEGY Development.

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  #1  
Old 09-09-2008, 04:49 PM
bernievn's Avatar
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South Africa
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Default Strategic Sourcing Processes

Is there a standard process for strategic sourcing that can be applied in any organization or should each define its own? For example: Some companies use the following sequence:

1. Identify the business drivers / strategic objectives
2. Analyse the spend and categorise into commodity categories
3. Create cross functional teams based on organisational / commodity requirements
4. Investigate the current situation / build a fact base
5. Identify and quantify opportunities
6. Finalise commodity strategies and obtain approval
7. Implement proposed strategy...
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Last edited by bernievn : 09-09-2008 at 04:54 PM.
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  #2  
Old 10-12-2008, 01:24 AM
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Join Date: Oct 2008
Australia
Posts: 1
Default Re: Strategic Sourcing Processes

Quote:
Originally Posted by bernievn View Post
Is there a standard process for strategic sourcing that can be applied in any organization or should each define its own? E.G. Some companies use the following sequence:

1. Identify the business drivers / strategic objectives
2. Analyse the spend and categorise into commodity categories
3. Create cross functional teams based on organisational / commodity req'ts
4. Investigate the current situation / build a fact base
5. Identify and quantify opportunities
6. Finalise commodity strategies and obtain approval
7. Implement proposed strategy...

The short answer is 'yes', which is in the main very similar to what you have described above. The differences are usually in steps 3 and 7 (in your list)!

(1) Step 3: Depending on the 'strategic objectives', you will find that team memberships can be different , e.g. who is driving the initiatives? Often, and unfortunately "political" influences within the organisation can play a big part in team composition.
(2) Step 7: The timing of strategy rollout will make a significant difference in the success of strategic procurement initiatives. For example, in the current highly volatile commodity markets, going to the (supply) markets, negotiating deals, and setting up duration for supply agreements very much depend on when the team engages the supply market! This factor may even determine the well-being of the organisation as security of supply may seriously disrupt the business' operations. There are no doubt other implications with timing factor...
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Old 01-05-2009, 06:11 PM
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Join Date: Jul 2008
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Posts: 1
Default Re: Strategic Sourcing Processes

Quote:
Originally Posted by bernievn View Post
Is there a standard process for strategic sourcing that can be applied in any organization or should each define its own? For example: Some companies use the following sequence:

1. Identify the business drivers / strategic objectives
2. Analyse the spend and categorise into commodity categories
3. Create cross functional teams based on organisational / commodity requirements
4. Investigate the current situation / build a fact base
5. Identify and quantify opportunities
6. Finalise commodity strategies and obtain approval
7. Implement proposed strategy...

I believe the process you cite is common to most companies, based on common sense applicable, and the fact that there is little difference at this level of viewing, between the approach for different categories. Where the real differences become significant is in the next level down, as soon as the commodity categories are listed (mainly strategic implications, the effect of unknown implications on the options being reviewed, in particular, in my experience which relates mainly to low cost country procurement).

Other areas include how companies look at the total cost of change and of ownership, and tangible/intangible costs associated with this. This tends to be the area where most lively discussion and alternative views is/are created.
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