TRAINING BEST PRACTICE IN STRATEGIC SOURCING METHODOLOGY

Training Develop Insight Into Life Cycle Cost Drivers

Training Business Case To Ensure The Strategy Execution Of The Acquisition

Description:

Strategic sourcing is a supply management tool that delivers significant cost reductions and other benefits. More specifically, it’s a periodic event that includes the identification and selection of initial commercial arrangements with a selected supplier that either creates or resets a relationship.

Strategic Sourcing methodology is used to identify, examine, select and implement sourcing alternatives for a specific Sourcing Group (SG). It encompass the whole process for evaluating, selecting and aligning with supplier(s) to achieve operational improvements and support overall strategic objectives.

Strategic Sourcing focuses on total costs and not just the purchase price; Strategic Sourcing assists an organization by gaining a good understanding of its requirements, knowing how it must map to the existing supply market, and then develop a plan for both short and long-term objectives. There are many ways to segment a strategic sourcing program into a step by step approach.

Strategic Sourcing begins with data collection and analysis to develop a deeper understanding of where and how the state spends money. During this assessment, the state develops profiles of different catagories of spend and a business case for the savings to be realized by pursuing strategic sourcing.

The assessment typically takes two to three months 9 – 11 November 2021 but the invaluable help it provides in providing a baseline of spending and determining priorities for improvement makes it a worthwhile exercise, even if the state or province does not continue with further phases of strategic sourcing implementation: Often, what’s found leads the government to wmbark upon legislative procurement reform.

After assessment, strategic sourcing moves to implementation: harmonizing or normalizing reqirements and service levels that take into account the bigger picture ( including elements such as total cost of ownership and value through customer service); evaluating supplier markets; developing strategies and tactics for sourcing of different categories; evaluating suppliers through competitive bids; and then moving into negotiations for awarding new contratcs.

Objectives:

* Analysis of current spend to develop insight into life cycle cost drivers and requirements
* Identification of best practices (both across the government and in the commercial sector) which have been successful in minimizing cost and improving value
* Analysis of the supply market to identify the trends and economic factors that can be leveraged to optimize the government’s acquisition
* Development of a strategy to lower the government’s total cost of ownership
* Development of a business case to ensure the strategy Execution of the acquisition
* Ongoing performance management, including the collection of detailed data from vendors to ensure value is achieved

COURSE CONTENT

1. Introductory to Strategic Sourcing Management

2. Identifying the targeted spend area
*  Creating the sourcing team (Touch Point Required)
*  Developing a team strategy and communication plan (Touch Point Required)
*  Gathering Market Information
* Developing a supplier portfolio (Touch Point Required)
*  Develop a Future State
* Negotiate, evaluate, commitment, and agree (Touch Point Required)
*  Supplier Relationship Management

3. The steps in a strategic sourcing process are:
* 1. Assessment of a company’s current spending (what is bought, where, at what prices?).
* 2. Assessment of the supply market (who offers what?).
* 3. Total cost analyses (how much does it cost to provide those goods or services?).
* 4. Identification of suitable suppliers.
* 5. Development of a sourcing strategy (where to purchase, considering demand and supply situations, while minimizing risk and costs).
* 6. Negotiation with suppliers (products, service levels, prices, geographical coverage, etc.).
* 7. Implementation of new supply structure.
* 8. Track results and restart assessment (continuous cycle).
* 9. Negotiate payment terms with vendors.

4. Commodity Strategies Using:
*  Best Price Evaluation,
* Volume Concentration,
* Product Specification Improvement,
* Joint Process Improvement,
* Relationship Restructuring and Global Sourcing.

5. Project Procurement
6. Methods of Vendor Selection