Strategic Global Sourcing Best Practices E-Book

Fred Sollish

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 364

Veröffentlichungsjahr: 2011

Beschreibung

The latest best practice guidance on all aspects of global strategic sourcing-including environmental and international issues Strategic Global Sourcing Best Practices covers the latest trends and leading edge processes in global strategic sourcing, including supply management, t, sustainability, financial decisions, risk management, and international strategies. * Offers the latest trends and guidance for sourcing and supply managers * Features coverage of understanding sourcing, procurement and supply management, procurement and best business practices, best practices in sourcing management and global sourcing management, financial strategies for sourcing, responsible procurement,diversity procurement, managing risk, supplier selection, project management for procurement and supply managers, managing supplier relationships, international sourcing, managing supplier relationships supply management operations, * With the rise of global supply chains, environmental/sustainability concerns, and constantly evolving technology, the time is right for understanding Strategic Global Sourcing Best Practices.

Leseprobe

Contents

Cover

Title Page

Copyright

Preface

Chapter 1: An Overview of Global Strategic Sourcing

The Strategic Sourcing Plan

Operational Sourcing Strategy

Summary

Chapter 2: Operational Alignment with Sourcing Strategy

Understanding Requirements

Opportunity Analysis

Category Segmentation

Summary

Chapter 3: Source to Settle (S2S)

Why Source to Settle?

Implementing an S2S Process

Managing the S2S Process

Outsourcing the S2S Process

Summary

Chapter 4: Cultural Considerations for Global Sourcing

Conducting Business in Other Nations

Cultural Values

Sourcing Challenges

Summary

Chapter 5: Supplier Research and Market Analysis

Conducting Supplier Research

Conducting Market Analysis

Summary

Chapter 6: Solicitation of Bids and Proposals

Solicitation Planning

Solicitation Methods

Summary

Chapter 7: Supplier Evaluation and Selection

Evaluation Criteria

Summary

Chapter 8: Negotiation Revisited

The Nature of Negotiation

Negotiation Strategy

Negotiation Planning

Developing a Negotiation Plan

Exception Conditions

Summary

Chapter 9: Supplier Diversity

Diversity Programs

The Business Case for Diversity

Supplier Diversity Best Practices

Global Supplier Diversity

Diversity Advocacy Organizations

Summary

Chapter 10: Sustainability

Issues in Sustainability

Guidelines

Criteria for Supplier Evaluation

Summary

Chapter 11: Risk

The Nature of Risk

Why Is Understanding Risk Important?

Risk Management Principles

Summary

Chapter 12: Global Sourcing

Developing a Global Sourcing Strategy

International Trade Requirements

Summary

Glossary

Suggested Reading

About the Authors

Index

Copyright © 2011 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Sollish, Fred.

Strategic global sourcing best practices / Fred Sollish, John Semanik.

p. cm.

Includes index.

ISBN 978-0-470-49440-0 (hardback); ISBN 978-0-470-94928-3 (ebk);

ISBN 978-0-470-94929-0 (ebk); ISBN 978-0-470-94930-6 (ebk)

1. Industrial procurement. 2. Purchasing. 3. Strategic planning. 4. Business logistics. I. Semanik, John. II. Title.

HD39.5.S664 2011

658.7'2–dc22

2010037969

Preface

For most of its history, procurement has been focused primarily on transactional processing, with virtually no strategic decision-making responsibilities. The typical purchasing routine has been simple: receive a requisition from the user, place the purchase order with the supplier, expedite when necessary, and resolve invoice discrepancies. In this process, there was very little room for decision making such as supply sourcing and even less for discretion. Furthermore, it has been widely estimated that even as late as the 1990s, less than 60 percent of an organization's spending with suppliers was controlled by any part of the procurement organization.

Today, this is certainly no longer the case; procurement has evolved into a strategic element in the competitive arsenal of most organizations. There is now a justifiable movement toward centralized control of corporate spending for cost reduction, compliance, and risk management. In fact, many U.S. organizations now mandate that all external spending come under the auspices and control of the procurement or supply management group.

What created this change? We can only surmise. Competitive pressure to reduce costs most likely has a large role; Sarbanes-Oxley legislation requiring the disclosure of risks to shareholders may also contribute. And as executive management's awareness of procurement's potential to positively impact the profitability of the organization evolved, the level of professionalism within the procurement group has improved as well. Twenty years ago, no more than five universities offered graduate degrees in procurement, contract management, or supply management; now there are dozens in the United States alone. The trend points to a sustained increase in demand for educational opportunities in this field.

Recently, an even newer trend has emerged: the division and migration of the procurement/supply management group into strategic and tactical elements. Procurement has developed as a valuable tactical element, overseeing the day-to-day logistics operations with the supply base, while a new element in the procurement process, sourcing, has taken the longer-range, strategic role: finding, qualifying, developing, and contracting with domestic and global supply organizations. Keep in mind that sourcing is still in its relative infancy (although we hear so much about it). Because the process will likely continue to evolve substantially in the coming decade, it becomes difficult to forecast its ultimate evolution.

We will leave the future to visionaries. We chose to address in our review what we believe is the strategic sourcing state of the art at this time. Our task is one of surveying current practices in an attempt to uncover and document what we believe to be the best practices in sourcing operations. And since we are now facing an increasingly integrated world economy, we've tried to sift out those practices that apply globally as well.

We recognize that defining best practices is going to be somewhat subjective, based on the information we can gather and the opinions of others as well as our own. We say this with no attempt to excuse ourselves should we fail to pinpoint each and every one of the areas that come into the picture. Our task, we believe, is to provide the global supply professional with a basis for understanding sourcing practices as they exist today and to be informed enough to understand their evolution in the future.

In the sincere belief that we have accomplished this task, we invite you to join us in the strategic sourcing evolution.

Fred Sollish

San Francisco, California

John SemanikSan Jose, California

Chapter 1

An Overview of Global Strategic Sourcing

Although it has a grandiose-sounding title, strategic sourcing has its roots in very humble beginnings. Sourcing has always been a purchasing and supply management function. In its traditional form, it is the process of locating and employing suppliers. However, various organizations and academics often define this process in different ways when managing their supply chains. As supply chains extend into global markets today, we find under the heading of strategic sourcing a number of often confusing and disparate methods. We expect, in the pages that follow, to bring some measure of clarity to the subject. This chapter provides an overview of the topics we intend to cover in more detail in chapters that follow.

So let's begin our exploration with a basic definition, as we see it, to help keep us in alignment as we go through the more detailed processes in this book. Here is our definition:

Strategic sourcing is an organizational procurement and supply management process used to locate, develop, qualify, and employ suppliers that add maximum value to the buyer's products or services.

The major objective of strategic sourcing is to engage suppliers that align with the strategic business and operational goals of the organization. We apply the term “strategic” to recognize that many sourcing projects require a long-term plan of supply chain action. It's meeting the needs of this relatively long time horizon that makes sourcing “strategic.”

When the word “global” is added to the title, it means that suppliers may be selected beyond the organization's national borders.

Using a thorough, comprehensive process to select suppliers is a path to organizational supply chain management excellence. But this is not an easy task at all. The suppliers we select must be able to lower overall cost, expedite time to market, reduce business risk, improve product or service quality, and support us through flexible scheduling and, possibly, production and engineering support.

Strategic sourcing does not include the day-to-day activities of the acquisition process. It does not include supplier's individual quotations, routine buying activities, logistics, quality assessment, performance analysis, and payment. Essentially, strategic sourcing and procurement part ways following the formation of a contract or the formal qualification of a selected supplier.

Figure 1.1 shows the typical supply management process starting with receipt of a request (requirements) through managing the supplier or contract.

Figure 1.1 The Sourcing and Procurement Process

The Strategic Sourcing Plan

When in place and understood by all stakeholders, a strategic sourcing plan provides guidance to those responsible for implementing acquisition policy. As with any plan, it should be well documented and systematically refer to the organizational mission and vision statements. The plan must also clearly take into account customer requirements that are identified in the organization's broader strategic business plan.