The combined strength realized by the joint purchasing power of all the uc campuses, medical centers, and labs deliver substantial pricing discounts from regional. Contact supply chain management for more information on supply chain management, please call 415 4765761. However, it is conceptually easier to imagine a chain as a river, originating from a source, moving downstream and terminating at a sink. Meanwhile, while sourcing and supply chain management are increasingly viewed as strategic by csuite executives, leaders of these functions often find themselves with organizations that are not fully equipped to deal with the challenges and opportunities they confront. A well trained procurement organization can save a company millions of dollars. Strategic sourcing techniques are also applied to nontraditional areas such as services or capital. Sourcing is the process of finding and subsequently managing a source for the input of production. Strategic purchasing is supported by associated supply management practices such. Reducing the purchasing spend for a company can directly relate to an increase. Materials management is a managerial and organizational approach used to integrate the supply management functions in an organization.
We will work with the suppliers to resolve any issues and, if necessary, initiate any escalation of systemwide agreement issues to ucop strategic sourcing. The supply chain logistics course will cover transportation, warehousing and inventory, and logistics network design. As our profession has evolved from the purchasing agent to supply chain mentality, strategic sourcing culminates the transformation as a collaborative process. If you are in supply chain field, you should know that its a major decision whether you outsource your.
Oct 07, 2019 for supply chain managers looking to maximize the effectiveness of todays complicated supply chains, strategic sourcing is a body of knowledge that can help increase efficiency and reduce costs. Strategic sourcing is an institutional procurement process that continuously improves and reevaluates the purchasing activities of a company. The strategy involves integration of its objectives in line with or confirming to the objectives of stake holders in operations, finance. The firms sourcing strategy the firms sourcing strategy imp group. Managing and partnering with suppliers is important from sourcing through procurement. The company management has to decide on the strategic supply chain policies with regards to suppliers. Strategic sourcing is a uc systemwide collaborative effort to drive value and increase customer satisfaction by enhancing product quality and service levels, while leveraging the uc buying. To operationalize strategic sourcing of direct materials, you need an endtoend process that integrates your sourcing, contracting, and supplier management. Supply chain management 2 according to the council of supply chain management professionals cscmp, supply chain management encompasses the planning and management of all activities. Some of the sourcing strategies that are used in supply chain management today include. And as labour costs in china inch closer to parity with that. Next, the book details strategic sourcing methodology. Supply management strategic sourcing sathit parniangtong.
This is a brief introductory tutorial that explains the methodologies applied in the rapidly. In order to remain competitive and relevant in todays chaotic markets, it is necessary to utilize the most beneficial cuttingedge tools. Supply chain management spans all movement and storage of raw materials, workinprocess inventory, and finished goods from point of origin to point of consumption. Strategic sourcing is the ongoing process of finding the best suppliers and using these supplier relationships to maximize value for an organization. Purchasing is shifting its focus from daily procurement activities to long term, valueadding purchasing and supply chain initiatives. Yet these lowcost benefits are eroding through a combination of cost. Nov 06, 2016 strategic sourcing refers to making supply chain management decisions with the intent to create distinctive value and to achieve a competitive advantage. And in no part of the business is it any more critical than in procurement and sourcing activities. Chambers, 41601 see upstream volatility in the supply chain. Developing and implementing a strategic sourcing strategy.
Strategic sourcing decision making is the scope of this master dissertation. When strategic sourcing results in a contract solution, competition is. Major changes are currently taking place within purchasing functions of manufacturing firms. Some of the sourcing strategies that are used in supply. Sourcing strategy scm supply chain resource cooperative. Sourcing is a critical activity used at both tactical and strategic levels. A paradigm shift in supply chain management can be the. We hear and read a great deal of information in our supply chain profession about strategic sourcing. Supply chain management spans all movement and storage of raw materials, work in process inventory, and finished goods from point of origin to point of consumption.
The overall purpose is to develop plans that it here to supply chain strategy well achieving maximum benefit from supply chain resources. Purchasing is shifting its focus from daily procurement activities to long term, valueadding purchasing and supply. The concept is created to help supply chain managers and. Supply chain management i about the tutorial supply chain management can be defined as the management of flow of products and services, which begins from the origin of products and ends with. Increasing value in supply chain and procurement stretch of the function need for doing more realizing latent supply chain value applying structured approaches for sustainable value bringing. It is concerned with what needs to be purchased, why, when and where. It also includes the crucial components of coordination and collaboration with channel. The essentials of supply chain management strategic.
Sourcing ppt procurement supply chain free 30day trial. Strategic sourcing is key for successful global supply chain management. Sourcing is the entire set of business processes required to purchase goods and services. Supply chain management 2 according to the council of supply chain management professionals cscmp, supply chain management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management. Supply base management sourcing by identifying and locating suppliers is relatively simple. Pdf the role of strategic sourcing on global supply chain. One example is the quality management concept which has had a major impact. The book uses in depth examples that bring these concepts to life and demonstrate that one size doesnt fit all. Most notably, a companys commitment to supply chain management impacts its strategic orientation, which in turn significantly influences the supply chains stability and the firms independence. Most notably, a companys commitment to supply chain management impacts its strategic orientation, which in turn significantly influences the supply chain s stability and the firms independence.
Mon, 24 apr 2017 as we all know, that identifying and locating suppliers is relatively simple, but it becomes more complex as the amount of unique raw materials, ingredients, parts, components, connectors, apparatus, products, equipment, supplies. Strategic sourcing and supplier relationship management. Explore the leading edge of procurement and supply management practices. Sep 18, 2019 strategic sourcing is a uc systemwide collaborative effort to drive value and increase customer satisfaction by enhancing product quality and service levels, while leveraging the uc buying power to significantly lower total costs. It begins by outlining the mental shift necessary to build robust relationships with suppliers. Founded in 1915, ism has over 50,000 members located in 100.
Strategic sourcing is a uc systemwide collaborative effort to drive value and increase customer satisfaction by enhancing product quality and service levels, while leveraging the uc buying power to significantly lower total costs. Building a distinctive capability in strategic purchasing is important to the achievement of relational rents. It involves the planning, acquisition, flow and distribution of production materials from the raw material state to the finished product state. Traditionally, sourcing was considered to be the identification of new or potential suppliers. The final building block is supplier relationship management. If you are in supply chain field, you should know that its a major decision whether you outsource your productionfunction or perform inhouse. Most organizations are short term in nature and plan along a timeline of one quarter to one year. May 04, 2018 sourcing is the entire set of business processes required to purchase goods and services. The results of a wellmanaged strategic sourcing initiative can be impressive and the benefits can be extended well beyond cost reduction. Cost management cost management has taken on increasing importance in all aspects of the business. Strategic sourcing refers to making supply chain management decisions with the intent to create distinctive value and to achieve a competitive advantage. As the core challenge of suppl y chain management is the remo val of barriers between the. The concept is created to help supply chain managers and practitioners to improve, develop and implement strategic sourcing strategies. Engel, vice president project services the procurement centre 76230111 ext.
Important strategic concepts about supply chain management, including. The next generation of supply chain ideas how to better structure your supply chain strategy guidelines for making strategic sourcing and makebuy decisions how to integrate ebusiness thinking into supply chain strategy and management. Supply chain planning, at the tactical level, occurs regularly but is not a daily task. May 16, 2011 the essentials of supply chain management strategic sourcing. Strategic sourcing for successful supply chain management. Outsourcing results in the supply chain functions being performed by a third party. Strategic supply chain management loudly and clearly makes the case that successful companies supply chain strategies are closely aligned with their competitive differentiation and operating models.
The next generation of supply chain ideas how to better structure your supply chain strategy guidelines for making strategic. The essentials of supply chain management strategic sourcing. The supply chain management specialization is made up of four basic courses in logistics, operations, planning, and sourcing, followed by a capstone course in supply chain management strategy. Taxation labour and material costs have been, for many multinationals, the initial driver of supply chain considerations in china. This study contributes to the supply chain and operations management literature in. This book takes a process approach of identifying, evaluating, selecting, managing and developing suppliers to create more value for customers. The overall goals of strategic sourcing is to achieve large and sustainable cost reductions, longterm supply stability and minimization of supply risk. The supply chain extends upstream to the sourcing of raw. Oct 20, 2005 building a distinctive capability in strategic purchasing is important to the achievement of relational rents.
Strategic purchasing is supported by associated supply management practices such as formal socialisation processes, supplier integration and supply base flexibility. But this was a strategic sale for pepsico which, after a couple of years of. Strategic sourcing institute for supply management. Represents a practical guide to managing supplier performanceprovides a thorough insight into. Strategic sourcing decisions are, for example, makeor buy decisions and supplier selection. Strategic sourcing is key f or successful global supply chain management.
But in setting supply chain strategy, youll need to look at three layers of cost. For supply chain managers looking to maximize the effectiveness of todays complicated supply chains, strategic sourcing is a body of knowledge that can help increase efficiency and reduce. Strategic sourcing strategic sourcing for successful supply chain management. Supply chain management i about the tutorial supply chain management can be defined as the management of flow of products and services, which begins from the origin of products and ends with the products consumption at the enduser. Choosing which resources and capabilities to develop internally and which to procure. Reducing the purchasing spend for a company can directly relate to an increase in profit and strategically there are a number of decisions that can be made to obtain that result. Impact the bottomline cost reduction is typically the primary goal of most strategic sourcing initiatives, because savings in cost of goods sold cogs. A method whereby a purchased part is supplied by only one supplier. An organizations strategic sourcing decisions determine where and how it procures products and services.