Question

Purchasing and Supply Chain Management

1. Please describe the five key sourcing related processes highlighting the decisions that purchasing managers need to make in each?

[15 Marks]

2. How can companies strategically align their sourcing strategy with their business strategy? Please provide practical examples

[10 Marks]

[Total: 25 Marks]

Answer 1

1. Please describe the five key sourcing related processes highlighting the decisions that purchasing managers need to make in each?

Let me describe the five key sourcing processes highlighting the decisions that purchasing managers need to make in each situations those are as stated below:

• Purchasing manager should work on preparing internal needs analysis, it is important steps before developing any procurement and sourcing strategies,
• Next key step or process is creating assessment of supplier’s market, indentifying the valid sources for raw materials, components, tools and machineries, we must be knowing the capability like when they can deliver an item, how they will deliver, costing and others factors to be analyzed for all suppliers,
• again, business performance, financial statement, credit reports can be evaluated for each suppliers, in other words, we must be taking various suppliers information, as it is important that we must be selecting a supplier based on their capability,
• next steps to create the sourcing or outsourcing strategies, those are like Direct purchase or sending request for proposal, and request for quote, strategic partnership can be created, acquisition can be done by selecting a desired supplier, next, we will be implementing that sourcing strategy
• then we will negotiate with the suppliers and select the bid which can give us best advantages, and we will work on implementing contractual supply chain development and transition plan,

2. How can companies strategically align their sourcing strategy with their business strategy? Please provide practical examples

As the sourcing strategy would include Request for proposal, Request for quotes, Partnership or acquisition, let say for Request for proposal we will ask for description about the material, information about the products and services, specifications and features details, service and delivery requirements, criteria for evaluation, pricing details, financial information, again, for sourcing strategy implementation, we need to know about business strategy, as every business has strategic objective, mission and vision, so, any sourcing strategies should not only think of benefits of a project also need to align with objectives of the business, here, every business should work on their portfolio analysis, Internal need analysis, and business benefit realization process, further to fulfill such sourcing process, we can work on single sourcing, multi sourcing, out sourcing and in sourcing etc, for example, if the organization works on house building project, here strategic sourcing like creating better supply chain for hiring various raw materials, tools, components to human employee take important role, so such house building project must bring sufficient or target benefits to the business organization, as any business is operated with various stakeholders, and their needs and requirement to be made, thus, the business strategy, objective to fulfilled for implementing the project and sourcing strategy, again, we will be defining the company Goal like SMART Goal, understand various interest, power, requirement of each stakeholders, assessing the business also help us to align the sourcing strategy with the business strategy,