SupplyChainManagement

S i P StrategicProcurement
Course Introduction CourseIntroduction
Section 1.0 Section1.0
CourseIntroduction
Objectives
Overview of SCM OverviewofSCM
ClassSchedule
ClassCourtesy
MethodofInstruction
Grading
ObjectivesoftheAdvancedCourse
be familiar with vocabulary and concepts befamiliarwithvocabularyandconcepts
beabletodescribeandimplementadvancedprocurement
strategies strategies
haveagreaterunderstandingoftheroleofthe
procurementdepartmentinstrategicplanning
haveexperiencesynthesizingcoursecontenttosolve
questionsthatrequirecombiningconcepts,techniques,and
assumptions
havetheopportunitytodemonstratecommitmenttogroup
effectiveness effectiveness
Overviewof(SCM)Certificate
Introduction to Supply Chain Management IntroductiontoSupplyChainManagement
IntroductiontoProcurementStrategiesinSupplyChain
StrategicProcurementinSupplyChainManagement
PlanningandSchedulinginSupplyChainManagement
Inventory,WarehousingandAnalysisinSupplyChainManagement
T h l d E P i S l Ch i M TechnologyandEProcurementinSupplyChainManagement
ProjectManagement AnOverview
Managing High Performance Teams ManagingHighPerformanceTeams
EffectiveProfessionalCommunications
FinalAssessmentPaper
WeekendSchedule
ScheduledTimeframe MaterialCovered
Weeknight
6:309:30pm

CourseIntroduction
ObjectivesofStrategicProcurementCourse
ReviewCaseMethodology
GroupPresentationGroupSelection;CaseAssignment;Discussion
2 0 Cost Management Discounts & Negotiation 2.0CostManagement,Discounts&Negotiation
Saturday
8:30am5:00pm

AssignedQuestionReview
ReviewCase51B&LInc.
3.0Make,Buy,Insourcing/Outsourcing
VideoIsWalmartGoodforAmerica
ReviewCase141TrojanTechnologies
4.0GlobalSupply Management
Weeknight
6:309:30pm

AssignedQuestionReview
ReviewCase61MorenCorporation(A)
5.0CapitalGoods
GroupWork
Saturday Assigned Question Review Saturday
8:30am5:00pm

AssignedQuestionReview
6.0Services
ReviewCase21SpartanHeatExchangersInc.
GroupCaseStudyPresentations
7.0StrategyinPurchasing&SupplyManagement
SCMConceptsReview
SCM Concepts Confirmation SCMConceptsConfirmation

ClassCourtesy
Promptandregularinattendance
Discussandparticipateenthusiastically
Personalexperiencesandopinionsarevalued
Allow&encourageotherstocontribute
L i i i l i & ll b ti Learningisinclusive&collaborative
Respecttheotherpersonspointofview
Respect confidentiality Respectconfidentiality
Confinediscussiontothetopic
Asidesdiscussedatbreak
MethodofInstruction
Lectureonmaterials 30%
Interactiveclassdiscussions 20%
ReviewofQuestions/Answers 25%
C t di 25% Casestudies 25%
Grading
Attendance 35%
ConceptsConfirmation 35%
GroupCaseStudy 30%
ForFinalGrades,seeGradeTranslationTable
GradingTranslationTable
A+ 95 100
A 90 94
A 85 89 A 85 89
B+ 80 84
B 75 79 5 9
B 70 74
C+ 65 69
C 60 64
F 59andbelow
ReviewQuestions
Chapter11:page307 #s1,2,8
Ch 30 2 3 Chapter5:page130 #s2,3,5
Chapter14:page412 #s3,6
Chapter 6: pages 155 156 #s 3 5 Chapter6:pages155156 # s3,5
Chapter6:pages155156 #s4,8
Chapter2:pages3738 #s1,8,10 p p g , ,
InClassCaseStudies
Case111 DeereCostManagementpages308309
C 5 1 B&L I 131 132 Case51 B&LInc. pages131132
Case141 TrojanTechnologies pages413415
Case 61 Moren Corporation (A) pages 156158 Case61 MorenCorporation(A) pages156158
Case62 MorenCorporation(B) pages158159
Case21 SpartanHeatExchangersInc. pages3940 p g p g
CUBSDIAGRAM
TheProcessGroupdiagramisbasedontheCUBS
(Customer,User,Buyer,Supplier)modelasshown
below below.
Inbound Outbound
Logistics Logistics Logistics Logistics
Operations
S2 S1 B U C1 C2 S2 S1 B U C1 C2

Purchasing Marketing
CaseStudyFormat
OrganizationBackground
D fi i th I DefiningtheIssue
AnalyzingCaseData
Decision Criteria DecisionCriteria
AlternativeAnalysisandEvaluation
ActionandImplementationPlan p
Assumptions,Presentation&Organization
FinalAssessmentPaper
ThegoaloftheFinalAssessmentpaperintheMountRoyal
University(MRU)SupplyChainManagementCertificate
Programistogivethelearneranopportunitytoapplysupply
chain management fundamentals principles and practices to chainmanagementfundamentals,principlesandpracticesto
areallifeproject.
Throughthewritingofapapershowingtheintegrationofall
h i hi h S l Ch i M theprocesseswithintheSupplyChainManagement
KnowledgeAreas,alearnerisabletoshowevidenceoftheir
understandingofthekeycomponentsofthenineclassroom
courses in the Supply Chain Management Certificate Program coursesintheSupplyChainManagementCertificateProgram.
Arequirementforcrossinstitutionrecognitionofthe
CertificateinSupplyChainManagement.
SupplyChainManagement
StrategicProcurement g
CostManagement,Discounts,&Negotiation
Section2.0(Chapter11)
SuppliersCosts
Suppliers often not challenged as to their own supply chain costs Suppliersoftennotchallengedastotheirownsupplychaincosts
duetoseveralmisconceptions:
1. Suppliersdonotknowtheirowncosts.
2 Interpretation of what constitutes a cost subjective 2. Interpretationofwhatconstitutesacostsubjective.
3. Refusaltodisclosesuchinformation.
4. Sellerscostsnotalwayswhatmarketpricesat.
5. ManySCMprofessionalsnotinterestedinsupplierscosts,onlyfocusonhow
lowtheycangettheprice.
Overridingconcern achievethebestpriceconsistentwith
quality,quantity,deliveryandservice. q y, q y, y
Needtobeabletojudgethereasonablenessofasuppliers
proposedpricingregime.
EstimatingInputCosts
Several methods to help SCM professionals in estimating SeveralmethodstohelpSCMprofessionalsinestimating
supplierscosts:
CostbasedPricing readilyavailabledata(market,indices)
OverheadCosts indirectcostsformfgfacilities(fixed%,allocatedcostforentire
estimatedyearlyproduction)
Tooling&EngineeringCosts incl.inoverhead,needtosegregateforanalysisand
determine what is reasonable determinewhatisreasonable
Gen.&Admin.Costs selling,promotion,advertising.Needtoanalyzeinrelationto
ownrequirements
MaterialCosts estimateusingasamplebillofmaterialsorfromreverseengineeringa
sampleunderconsideration
DirectLabourEstimates useofindices,geographicalconsiderations
l f hi ( ) TotalCostofOwnership(TCO)
TCOincludesallrelevantcosts
suchas:
Directmaterial Storage
Administration
Followup
E diti
Scrap
Warranty
S i Expediting
Inboundtransportation
Inspection and testing
Service
Downtime
Customer returns Inspectionandtesting
Rework
Customerreturns
Lostsales
TCO(contd)
TCOAnalysistobeusedfor: y
Highlightingcostreductionopportunities
Aidingsupplierevaluationandselection
Providing data for negotiations Providingdatafornegotiations
Focusingsuppliersoncostreductionopportunities
Highlightingtheadvantagesofexpensivehighqualityversuscheap,lowcost
materials
Clarifyinganddefiningsupplierperformanceexpectations;
Creatingalongtermsupplyperspective
Forecastingfutureperformance g p
Dothisby;havingsellerwillinglysharesome,most,orall,ofcost
data,developingowncostmodel,oracombinationofboth.
TargetPricing
In most basic form; derived by the organization establishing a Inmostbasicform;derivedbytheorganizationestablishinga
priceatwhichitplanstosellitsfinishedproduct.
Allorganizationalprerequisitecosts,includingexpected g p q , g p
normaloperatingprofit,aresubtractedfromthisfinalsales
pricetoderiveabasictargetcostforeachitem.Sourcing
workswithpotentialsupplierstoachievethematerialsand
servicescosttargets.
Designtocost,onthepartofdesignengineering
Manufacturetocost,onthepartofproduction
Purchasetocost,onthepartofsourcing/supply , p g / pp y
ActivityBasedCosting(ABC)
Attemptstoturnindirectcostsintodirectcosts;byspecificallyand
methodicallytrackingthecostdriversbehindalldirectandindirect y g
overheadcostsrelatedtoaspecificmanufacturingactivity.
ABCcanbeusedasatooltoreducesuppliercostsbyeliminatingnon
valueaddedactivities,reducingactivityoccurrences,andreducingthe , g y , g
costdriverrate.
Dataistheessentialkeyelementinallofthisactivity.Supplierswork
cooperativelytoprovideasmuchofdataaspossible. p y p p
Thecostofanactivityitselfmaybetargetedforimprovementsin
efficiencythroughfurthervalueanalysisandsystemredesign.
Discounts
CashDiscounts securingofpromptpaymentofanaccount; g p p p y
acknowledgingthetimevalueofmoneyandthepotentialreturnof
moniesusedforadditionalproduction.Thefocusshouldbeonthenet
price price.
TradeDiscounts mostoftengrantedbecausethepurchaserisa
particulartypeofdistributor,oruser,whoisabletosellanitematalower
priceduetoexistinginfrastructureandbusinesscontacts.Thediscount
oftenapproximatesthecostofdoingbusinessforthemanufacturer.
M lti l Di t th di t b ild h th d t MultipleDiscounts thesediscountsbuilduponeachother;usedto
furtherincentacustomertopurchasefromaparticularmanufacturer,and
toremainwiththemoverthelongrun.
Discounts(contd)
Q tit Di t t d f b i i ti l titi d QuantityDiscounts grantedforbuyinginparticularquantities,andvary
roughlyinproportiontotheamountpurchased.Setupcosts,
transportationcosts,andproductioncostsallcomeintoplayin
consideringthetypeandamountofquantitydiscountsofferedbya
particularseller.
Inventorycostconsiderations
Earlyproductionorderconsiderations
Cumulativediscountconsiderations
Followonorderdiscountconsiderations
Negotiations
The most expensive means of price determination requiring The most expensive means of price determination, requiring
both seller and buyer to come to a common understanding,
after intense discussion, of the essentials of a purchase / sale
t t i l di contract, including:
Quality
Support
Supply
Transportation
Price
Terms
Remember: Both parties must be able to reach their
objectives in order to consider the negotiations a success!!! objectives in order to consider the negotiations a success!!!
Negotiations(contd)
Negotiationsnottobeconfusedwithpricehaggling;nickle
anddimingasellertoaslowapriceaspossiblewithout
recognizing their costs and need for a profit Bad and recognizingtheircostsandneedforaprofit.Badand
unethicalbusinesspracticesinclude:
Misleadingthesellerinanyway
Erroneousvolumes
Fictitiouscompetitors
Unnecessarilyprolongednegotiations,withnointenttosettle
Negotiations(contd)
Planning&Preparingfor
Negotiations: Negotiations:
1. Developspecificobjectives/outcomes
basedonscenarios.
2 Gather pertinent data; especially cost
6. Seteachotherspositionsoneach
issue,assumedorotherwise,and
develop strategies to overcome or
2. Gatherpertinentdata;especiallycost
data.
3. Determinethefactsofthesituation;
what is known and unknown.
developstrategiestoovercomeor
strengthen.
7. Planthenegotiationstrategy;which
itemscomefirst,second,andwhich
whatisknownandunknown.
4. Determinetheissuesthatmay
generatedisagreementsanddevelop
potentiallyacceptableresolutions.
, ,
itemscanbecompromised.
8. Briefallindividualsontheteamwho
willbeparticipating.
5. Analyzethepositionsofstrengthas
wellasweaknessesforbothsides;
developsolutionstoboth.
9. Dressrehearsal.
10. Actualconductofthenegotiationsin
accordancewiththeplan.
ReviewQuestionsforNextClass
Chapter 11: page 307 #s 1 2 8 Chapter11:page307 #s1,2,8
Chapter5:page130 #s2,3,5
InClassCaseStudyforNext
Class
Case51B&LInc. pages131132
Case141TrojanTechnologies pages413415
SupplyChainManagement
StrategicProcurement
Make, Buy, Insourcing / Outsourcing Make,Buy,Insourcing/Outsourcing
Section3.0(Chapter5)
ReasonsforMakingInsteadof
i Buying
quantities are too small quantitiesaretoosmall
quantityrequirementsmaybeunusualastorequirespecialprocessing
methods
topreservetechnologicalsecrets
toobtainlowercosts
totakeadvantageofidleequipmentandlabor
toensuresteadyrunningofthecorporationsownfacilities
toavoidsolesourcingdependencies
competitive,political,social,orenvironmentalreasons
emotionalorpersonalattachmenttoinhouseproduction
ReasonsforBuyingOutside
lackadministrativeortechnicalexperiences
excessproductioncapacity
l h d h b l l f f h suppliersmayhaveareputationandhavebuiltarealpreferencefortheir
component
challengesofmaintaininglongtermtechnologicalandeconomicviability
for a non core activity foranoncoreactivity
adecisiontomake,oncemade,isdifficulttoreverse
itisdifficulttodeterminethetruelongtermcostsofthemakedecision
there is more flexibility in selecting possible sources and substitute items thereismoreflexibilityinselectingpossiblesourcesandsubstituteitems
superiorsupplymanagementexpertise
acquisitiongenerallyrequireslessoverhead
Subcontracting
Managingasubcontractisacomplexactivity.Somepointsto g g p y p
rememberare:
Cost control of the subcontract begins with the negotiation of a Costcontrolofthesubcontractbeginswiththenegotiationofa
fairandreasonableprice
Schedulecontrolrequiresthedevelopmentofagoodmaster
schedule
Technicalcontrolmustbeinstigatedtoensurethattheend
productconformstoalloftheperformanceparameters
Configuration control ensures that all of the changes are
documented
ReasonsforOutsourcing
reduceandcontroloperatingunits
improvecompanyfocus
i t ld id biliti gainaccesstoworldwidecapabilities
freeupinternalresourcesforotherpurposes
resourcesthatarenotavailableinternally
acceleratereengineeringinitiativesandbenefits
functionisdifficulttomanageoriscurrentlyoutofcontrol
make capital funds available for other projects / initiatives makecapitalfundsavailableforotherprojects/initiatives
shareriskswithsupplier(thereisacosttothis)
cashinfusion,ifequipment/processes/technologysold
PurchasingRoleinOutsourcing
providingacomprehensive,competitiveprocess
identifyingopportunitiesforoutsourcing y g pp g
aidingintheidentificationandselectionofpotentialsources
identifyingpotentialrelationshipissues,andsolvingthem
Developing,negotiatingandfinalizingthecontract
ongoingperformancemeasurement,monitoringandmanagementofthe
relationship
PurchaserSupplierRelationships
Traditional
LowestPrice
Partnership
Totalcostofownership
Specificationdriven
Shortterm;reactstomarket
Troubleavoidance
Endcustomerdriven
Longterm
Opportunitymaximization
Purchasersresponsibility
Tactical
Littlesharingofinformationonboth
id
Crossfunctionalteams&top
managementinvolvement
Strategic
Sh h t & l t l sides Shareshort&longtermplans
Sharerisk&opportunity
Standardization
J i Jointventure
Sharedata
Review Questions for Next Class ReviewQuestionsforNextClass
Chapter5:page130 #s2,3,5 p p g , ,
InClass Case Study for Next InClassCaseStudyforNext
Class
Case61Moren Corporation(A). pages156
158
SupplyChainManagement
Strategic Procurement StrategicProcurement
GlobalSupplyManagement
S i 4 0 (Ch 14) Section4.0(Chapter14)
ReasonsforGlobalPurchasing
Labourcostsintheproducingcountrymaybesubstantially
lower
E h f b i ff h Exchangeratesmayfavorbuyingoffshore
Equipmentandprocessesusedbytheinternationalsupplier
maybemoreefficient
Availabilitymaybeanissue,andgivenshortleadtimes,you
mayhavenochoicebuttosourceinternationally
Delivery may be quicker across the USA border versus shipping DeliverymaybequickeracrosstheUSAborderversusshipping
fromanotherdistantpartofthecountry(eastwesttypically
slowerthannorthsouthinCanada)
InternationalPurchasingChallenges
source locations and evaluation sourcelocationsandevaluation
lead/deliverytime
physicaldelivery
language/customs
ethics;athomeandabroad
exchangerates g
labourissues;athomeandabroad
timezones/managementissues
hidden costs hiddencosts
customs
Incoterms (whoisresponsibleforinsurance,shipping
claims,insuranceclaims,customs,taxes,duties)
Intermediaries
brokers
agents agents
tradingcompanies
barter/swaps
offsets
Review Questions for Next Class ReviewQuestionsforNextClass
Chapter14:page412 #s3,6
InClass Case Study for Next Class In ClassCaseStudyforNextClass
Case 61 Moren Corporation (A). pages 156158 Case6 1 Moren Corporation(A). pages156 158
SupplyChainManagement
Strategic Procurement StrategicProcurement
CapitalGoods
S i 5 0 (Ch 6) Section5.0(Chapter6)
ChallengesofEquipmentBuying
Strategicrisk
Largedollars
Infrequent purchase Infrequentpurchase
Totalcostdifficulttocalculate
Thebesttimetobuy
E i t l i t Environmentalimpact
Taxconsideration
Technologyforecasting
Lengthofstartup
Integrationwithestablishedprocedures
ReasonstoPurchaseEquipment
capacity
economyinoperationandmaintenance
increased productivity increasedproductivity
betterquality
dependabilityinuse
savingsintimeorlaborcosts
durability
safety,pollution,andemergencyprotection y, p , g y p
CostConsiderations
Istheequipmentintendedforreplacementonly,ortoprovideadditional
capacity?
What is the installed cost of the equipment? Whatistheinstalledcostoftheequipment?
Whatwillstartupcostsbe?
Willtheequipmentinstallationcreateproblemswithplantlayout?
Whatwillbethemaintenanceandrepaircosts,whowillproviderepairparts,
andatwhatcost?Whowilldotheactualrepairswhenrequired?
Whatwillbetheoperatingcosts;includingpowerandlabour?
Whatarethemachinehourstheequipmentwillbeused?
Atwhatrateisthemachinetobedepreciated?
Whatfinancingcostsareinvolved?
SelectionoftheSource
li bili f h ll reliabilityoftheseller
reasonableprice
selectionoftherighttypeofequipment
proper installation properinstallation
commoninterestsinefficientoperation
availabilityofrepairpartsandservices
satisfactory past relationships satisfactory past relationships
patentinfringementconsiderations
extentofliabilityforaccidentstoemployees
fullregulatorysafetycompliance g y y p
consequentialdamageconsiderations
oldorobsoleteequipmentdisposal
ReasonsforBuyingUsedEquipment y g q p
buyersfundsarescarce
for use in a pilot or experimental plant foruseinapilotorexperimentalplant
forusewithaspecialortemporaryorder
wherethemachinewillbeidlesubstantialamountsoftime
fortheuseofapprentices
formaintenancedepartments
forfasterdeliverywhentimeisessential y
whenausedmachinecanbeeasilymodernizedinrelativelylittle
time
AdvantagesofLeasingEquipment g g q p
leaserentalsareexpensesforincometaxpurposes p p p
smallinitialoutlay(mayactuallycostless)
availabilityofexpertservice
risk of obsolescence reduced riskofobsolescencereduced
adaptabilitytospecialjobsandseasonalbusiness
testperiodprovidedbeforepurchase
burdenofinvestmentshiftedtosupplier
Disadvantages of Leasing Equipment DisadvantagesofLeasingEquipment
finalcostmaybetoohigh
surveillance by lessor entailed surveillancebylessorentailed
lessfreedomofcontrolanduse
TypesofLeases yp
Financial lease Financiallease
Operationallease
ReviewQuestionsforNextClass Q
Chapter 6: pages 155 156 #s 3 5 Chapter6:pages155156 #s3,5
Chapter6:pages155156 #s4,8
Chapter2:pages3738 #s1,8,10
InClass Case Study for Next Class In ClassCaseStudyforNextClass
Case21SpartanHeatExchangersInc. pages
3940
SupplyChainManagement
StrategicProcurement
S i S i 6 0 (Ch 6) ServicesSection6.0(Chapter6)
DiversityofServicesPurchasing
advertising
architectural architectural
banking&auditing
programming
construction
consulting
courier
customsbrokerage
dataprocessing
environmentalcleanup
engineeringdesign
t t wastemanagement
WhatMakesServicesDifferent?
theinabilitytostoreservicesisthemostcommonattribute
differentiating services from goods differentiatingservicesfromgoods
timingofthedeliveryhastocoincidewiththepurchasers
specificneeds
difficultyinassessingqualityisanotherdifferentiating
attributeofservices
inspectionpriortodeliveryisoftenverydifficult p p y y
specificationandmeasurementofqualityinaservicemay
alsopresentsignificantdifficulties
FrameworkforAnalyzingServices
Valueoftheservice
Degreeofrepetitiveness g p
Degreeoftangibility
Directionoftheservice
Production of the service Productionoftheservice
Natureofthedemand
Natureoftheservicedelivery
f Degreeofcustomization
Skillsrequiredfortheservice
TheAcquisitionProcessforServices q
Needrecognitionandspecification
Analysis of supply alternatives Analysisofsupplyalternatives
ThePurchaseAgreement;includingspecialprovisions
sourcing
i i pricing
sourceoptions
makeorbuy
Contract Administration ContractAdministration
followupandexpediting
qualitycontrolandsupplierevaluationpayment
records & other aspects of contract administration records&otheraspectsofcontractadministration
ReviewQuestionsforNextClass Q
Chapter6:pages155156 #s4,8 p p g ,
Chapter2:pages3738 #s1,8,10
InClass Case Study for Next Class In ClassCaseStudyforNextClass
Case21SpartanHeatExchangersInc. pages39
40
Supply Chain Management SupplyChainManagement
Strategic Procurement StrategicProcurement
StrategyinPurchasing&Supply
Management
Section7.0(Chapter2) ( p )
LevelsofStrategicPlanning
Corporate:Whatbusinessarewein?Howwillwe
efficientlyandeffectivelyallocateourresources? y y
Unit:Plansofeachofthebusinessunitsmoldedto
contributetothecorporatestrategy?
F ti Th h f h f ti l Function:Thehowofeachfunctionalareas
contributiontothebusinessstrategy,involvingthe
allocationofallinternalresources.
SupplysContributiontoBusinessStrategy
Supply
Objectives
Organizational
Objectives
Supply
St t
Organizational
St t Strategy Strategy
SupplysContributiontoBusinessStrategy
Current
Needs
Future
Needs
Current
Markets
Future
Markets Markets Markets
SupplysContributiontoBusinessStrategy
socialissuesandtrends
governmentregulationsandcontrols
financial planning with suppliers financialplanningwithsuppliers
productliabilityexposure
economictrendsandenvironment
organizationalchanges
productorserviceline
competitiveintelligence
technology
ecommerce
investment
mergers/acquisitions/divestment
ti b d titi timebasedcompetition
CompetitiveIntelligence
Howwillcompetitorsdirectionsaffectthesupplymarket? p pp y
Howwillthemarketreacttoamoveagainsttheprevailing
trends?
What current commodities may be redundant in the short Whatcurrentcommoditiesmayberedundantintheshort,
medium,andlongterm?
Whatisbeingdonetomitigatetheeffectsofthat
redundancy?
RiskManagement
Risks in the supply chain can be classified in two different Risksinthesupplychaincanbeclassifiedintwodifferent
ways:
theriskofinterruptionoftheflowofgoodsandservice
theriskthatthecostofthegoodsorserviceswillbehigher
thanexpected
To manage supply risks the following are needed: Tomanagesupplyrisksthefollowingareneeded:
identificationandclassificationoftherisks
impactassessment
ariskstrategy
MajorPurchasingFunctional
StrategyAreas
Assuranceofsupplystrategies
Costreductionstrategies
Supply support strategies Supplysupportstrategies
Environmentalchangestrategies
Competitiveedgestrategies
StrategicComponents
What?Tomakeorbuy
Quality? Whatisbeingprocured
Howmuch? Largeversussmall,maintenanceofinventoryornot
Who? Centralizeordecentralize,qualityofstaff
When? Nowversuslater,forwardbuying
Whatprice? Premium,standard,costbased,marketbased
Where? Local,regional,global
How? Systemsandprocedures,negotiations,systems,contracting,ethics,
value analysis valueanalysis
Why? Objectivescongruent,internalreasons,outsidesupply,inside
supply
TrendsandtheFuture
Nontraditionalstaffinginsupplymanagementpositions
Technicalentryrouteintopurchasing
Emphasis on total quality management and customer satisfaction Emphasisontotalqualitymanagementandcustomersatisfaction
Emphasisontheprocessusedinacquisition,ratherthanjustthetransaction
itself
Purchaseofsystems,services,andproducts
Strategiccostmanagement
Designengineeringandpurchasingcapitalizingontheirpotentialsynergy
Thesupplierbasewillbereformulated
Longertermcontracts
eCommerce
TrendsandtheFuture(contd)
Globalsupplymanagement
MROitemshandledbythirdpartycontractors
l d h l d d d b l d Sourcingtoincludethecompleteendproduct,orservice,andbecompleted
proactively
Closersupplierrelationshipsteaming
Empowerment Empowerment
Endproductmanufacturerswillfocusondesignandassembly
Consortiumsforpurchasing
Separation of strategic and tactical purchasing Separationofstrategicandtacticalpurchasing
Greaterinvolvementofpurchasinginnontraditionalpurchases
Environmentalpurchasing
Valueenhancementvs.costreductions
AssignedQuestionReview g Q
Ch t 6 155 156 # 4 8 Chapter6:pages155156 #s4,8
Chapter2:pages3738 #s1,8,10
Review of all of the assigned questions Reviewofalloftheassignedquestions.
ConfirmationExam
Openbook,inclass,handinSCMStrategicProcurement
conceptsexam.