Global Logistics Management
AZ7755
gscm_6th_ed_ch3_en1.pptManaging Procurement and Sourcing
Getting What You Need
GSCM Ch 3 - *
Global sourcing
Global
Sourcing
Benefits
Risk
Factors
Factor-
input
Market
access
Quality
Ethical
concerns
Patent
protection
Supply management
Aims/objectives
Process of
sourcing &
procurement
Supplier
selection
Supplier
management
Aims/Objectives
The primary goals/objectives of purchasing are:
- Ensure uninterrupted flows of raw materials at the lowest total cost,
- Improve quality of the finished goods produced, and
- Optimize customer satisfaction.
Purchasing contributes to these objectives by:
- Actively seeking better materials and reliable suppliers,
- Work closely with and exploiting the expertise of strategic suppliers to improve quality and materials
- Involving suppliers and purchasing personnel in new product design and development efforts.
GSCM Ch 3 - *
The sourcing process
- Conduct internal needs analysis
Item to be sourced; characteristics; import restrictions; volume
- Conduct market assessment of suppliers
PEST analysis of country; risks (threats) and opportunities
- Collect supplier information
Reputation; financials; references
- Develop sourcing strategy
Strategic alliance?; level of collaborating
- Negotiate with suppliers
Price; quality; delivery times
- Implement supply chain improvements
Develop key performance indicators (Kpi)
The sourcing process
GSCM Ch 3 - *
Adapting the process
- Spend-driven approach
Analysis of every sourced good or service
Suppliers selected to meet company’s spend profile
- Risk-driven approach
Placing a trial order
Avoiding high-risk countries
Having more than one supplier
Negotiate conditional payment terms
GSCM Ch 3 - *
Efficient sourcing
GSCM Ch 3 - *
Efficient sourcing
- Total acquisition cost analysis (TAC)
- Supply base rationalization and consolidation
- Primary and secondary sourcing
- E-procurement
GSCM Ch 3 - *
Partnerships and alliances
- Benefits of supply chain partnerships
- Foundations for good partnerships
- Common types of supply chain partners
Vendor Managed Inventory (VMI)
Collaborative planning, forecasting and replenishment (CPFR)
GSCM Ch 3 - *
Outsourcing
- Benefits
- Importance of knowing an organization’s core competencies
- Types of agreements:
Equity joint venture
Equity strategic alliance
Non-equity alliance
Franchising
Production and assembly
Legal services
Technical training
GSCM Ch 3 - *
Outsourcing
Benefits
Cost savings
Gaining outside expertise
Improving customer service
Ability to focus on core competencies
Obtaining outside technology
Disadvantages
- Possibility of increased costs
- Loss of company control
- Negative impact on employees
- Negative impact on customers
- Relationship problems
GSCM Ch 3 - *
Negotiating with suppliers or outsourcers
- Priority negotiating elements
What volume is being purchased?
Discounts available?
Are logistical and importing costs covered in the price?
What does the price include?
What are the responsibilities of each party involved?
- Method of payment and documentation
- Payment terms
- Ensuring receipt
GSCM Ch 3 - *
Compliance with international law: Export regulations
- Export control
- Exchange control licenses
- Export quotas
- Export documentation
Commercial invoice
Bill of lading
Export declaration
Packing list
Insurance document
Certificate of origin
GSCM Ch 3 - *
Compliance with international law: Import regulations
- Importers liability
- Import quotas
- Antidumping legislation
- Tariff classification
- Import documentation
Commercial invoice
Bill of lading
Import declaration
Packing list
Insurance document
Certificate of origin
GSCM Ch 3 - *
Customs brokers
What is a customs broker?
What services do customs brokers offer?
How should my organization choose a customers broker?
GSCM Ch 3 - *
Becoming a supplier
- Benefits
- Locating opportunities
- Tips for responding to an RFP/RFQ
- Bidding realistically
- Export contracts
- Binding agreements and contracts
