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Sourcing Procurement Presentation

The document outlines the importance of sourcing in procurement and supply chain management, highlighting tactical and strategic sourcing approaches. It discusses category sourcing, portfolio analysis, sourcing strategy development, and the benefits of effective sourcing decisions. The document emphasizes the need for supplier evaluation, performance management, and relationship management to optimize supply chains and achieve cost savings and quality improvements.

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Abbey Anguyo
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54 views24 pages

Sourcing Procurement Presentation

The document outlines the importance of sourcing in procurement and supply chain management, highlighting tactical and strategic sourcing approaches. It discusses category sourcing, portfolio analysis, sourcing strategy development, and the benefits of effective sourcing decisions. The document emphasizes the need for supplier evaluation, performance management, and relationship management to optimize supply chains and achieve cost savings and quality improvements.

Uploaded by

Abbey Anguyo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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PROCUREMENT

EXCELLENCE
Group Course Work

Sourcing in Procurement
and Supply Chain
Management

Group Members:

# Name Reg. No.


1 Abbey Anguyo 24/U/GMBA/15715/PE
2 Amon Muganzi 24/U/GMSC/19202/PE
3 Anthony Munalwa 24/U/GMBA/16218/PE
4 Faith Mugume 24/U/GMBA/16185/PE
5 Hasifa Muhawe 24/U/GMSC/16189/PE
6 Joan Kibrai Andiru 24/U/GMBA/15711/PE
Simon Peter 24/U/GMBA/16512/PE
7
Okurut
Introduction
Sourcing is the process of identifying,
evaluating, and engaging suppliers to
acquire goods and services efficiently and
effectively.

Importance: Sourcing ensures the


organization has the right suppliers
delivering value through cost control,
quality management, and risk mitigation.
Sourcing Approaches

Tactical Sourcing:
• Short-term, reactive approach
• Focuses on immediate operational needs
Strategic Sourcing:
• Long-term, proactive approach
• Aligns sourcing decisions with overall
business strategy
• Emphasizes value creation and planning.
Tactical vs Strategic Sourcing
Aspect Tactical Sourcing Strategic Sourcing
Timeframe Short-term focus Long-term focus
Approach Reactive and Proactive and strategic
operational
Goal Cost minimization Value creation and alignment
with strategy
Supplier Limited engagement Collaborative partnerships
Relationships
Decision-Making Quick and Informed and analytical
transactional
Category Sourcing
Organizing procurement around specific
categories of goods or services.
Benefits:
• Enhanced supplier relationships
• Cost savings
• Improved quality and performance.

Stages: Category Planning, Category


Sourcing, Category Implementation.
Category Sourcing Plan
A formal plan for securing products/services
in a category.

Key Elements:
• Cross-functional team
• Review current/future spend
• Strategic alignment with business unit
objectives.
Portfolio Analysis
Portfolio Analysis helps classify purchases
into four categories: Routine, Bottleneck,
Leverage, and Critical.

Objective: Helps organizations make


informed decisions based on supply risk
and spend value.
Portfolio Analysis – Decision Making
• Routine Products: Low risk, low spend – reduce small volume items.
• Bottleneck Products: High risk, low spend – ensure continuity through service level agreements.
• Leverage Products: Low risk, high spend – consolidate suppliers to reduce costs.
• Critical Items: High risk, high spend – prioritize supplier collaboration.
Sourcing Strategy Development
Factors to Consider:
• Number of suppliers
• Supplier locations
• Type of supplier relationship

Strategies:
• Global vs Local sourcing
• Single vs Multiple sourcing
• Supply Base Optimization.
Sourcing Decisions

• Single vs. Multiple Sourcing: Choosing


one supplier or several to reduce risk and
improve flexibility.
• Domestic vs. Global Sourcing: Source
locally or internationally depending on
cost, quality, and market dynamics.
Benefits of Effective Sourcing Decisions

• Cost Savings: Identify the right suppliers


to leverage economies of scale.

• Improved Quality: Ensure suppliers


meet quality standards.

• Supply Chain Reliability: Stronger


supplier relationships lead to stable supply
chains.
Phases of Strategic Sourcing
1. Assessment of Current Spend
2. Market Research and Supplier
Identification
3. Supplier Evaluation and Selection
4. Negotiation and Contracting
5. Implementation of Sourcing Strategy
6. Supplier Relationship Management
7. Evaluation and Continuous Improvement.
Sourcing Process – Step by Step
1. Needs Identification
2. Market Research
3. Supplier Identification
4. Supplier Evaluation and Selection
5. Negotiation
6. Contract Finalization
7. Order Placement
8. Delivery and Inspection
9. Supplier Relationship Management
10. Feedback and Continuous
Improvement.
Developing a Sourcing Strategy
and criteria

Adapted from Purchasing and supply chain management by Robert Monczka 6th Edition
Sourcing decisions

1. Inhouse or outsource/make or buy


2. Domestic vs. Global Sourcing
3. Single vs. Multiple Sourcing
4. Supplier Selection
5. Contracting Decisions
6. Sourcing Strategy
Benefits of effective Sourcing decisions

1. Cost Savings.
2. Improved Quality
3. Efficient Procurement Transactions.
4. Lower Overall Costs through Design Collaboration.
5. Improved Supply Chain Coordination and
Forecasting
6. Risk Mitigation
7. Competitive Advantage
8. Supply Chain Reliability
9. Enhanced Supplier Relationship and innovation
10.Continuous Improvement and Feedback
Supplier Evaluation

Goal: Ensure suppliers meet requirements


and minimize risks.
Key Criteria:
• Financial Stability
• Quality Standards
• Delivery Performance
• Technical Capability
• Compliance with Regulations.
Supplier Evaluation Techniques
• Request for Proposal (RFP)
• Site Visits and Audits
• Performance Metrics (KPIs)
• Supplier Scorecards
• References and Reviews.
Supplier Performance Management

• KPIs: Develop clear metrics for measuring


supplier performance.

• Regular Performance Reviews: Ensure


suppliers meet agreed standards.

• Supplier Quality Audits: Conduct audits to


assess systems and processes.
Supplier Development
Techniques:
• Provide training/resources for
suppliers
• Share knowledge/best practices
• Invest in supplier capabilities
• Reward top-performing suppliers.
Supplier Relationship Management (SRM)

SRM involves strategically managing


supplier relationships to maximize
value.
Practices
•Segmenting suppliers
•Developing strategic partnerships
•Aligning objectives and incentives
•Communicating effectively
Procurement Tools & Techniques
Tools:
• Request for Quotation (RFQ)
• Tender Process
• E-Procurement Platforms
• Contract Management Software

Techniques:
• Expert Judgment
• Procurement Negotiation
• Proposal Evaluation.
Conclusion
Sourcing is a strategic aspect of procurement
that drives value through cost savings,
quality improvement, and stronger supplier
relationships. By aligning sourcing practices
with business objectives, organizations can
optimize their supply chains, mitigate risks,
and gain a competitive edge.
Q&A
• Thank you for your attention!
• Any questions?

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