Question:
Task
Identify four sourcing approaches, and for each one, identify and explain how you apply them to a category of
spend within your organisation.
Choose one of these categories and develop a supplier appraisal check list.
Solution:
Executive Summary
This assessment has delved on evaluating
the different sourcing approaches and the extent in which they can be applied to
various spend categories in an
organization. It has been identified that
the sourcing strategies are instrumental in an entity growth and profit with the need
for a critical sourcing decision being imminent. The sourcing approaches selected include Multiple, single,
dual and partnership sourcing. Multiple sourcing
involves dealing with more than one supplier by the purchaser with single
sourcing employing only one supplier. In regard
to dual sourcing, this is an event where there are conflicting needs of
different suppliers to mitigate the limitations
of multiple and single sourcing.
Additionally, partnership sourcing exists where there is competitive bidding
leading to price wars between the suppliers in
terms of costs and profits. The company of focus is Sadara which has
ventured its interest in the energy sector in Saudi Arabia. the spends had been segmented into strategic, leverage,
bottleneck and non-critical items. To establish the best practice of sourcing approach,
the spends have been categorized into
profit impact and supply risks. These included the leverage, non-critical,
strategic and bottleneck items. Lastly, a sourcing appraisal for the valves
spend has been provided with a clear criterion
being clearly demonstrated and
highlighted.
Contents
2.0 Sourcing Spend Categories and Positioning. 4
2.1 Portfolio Kraljic analysis. 5
2.2 Spend strategic Positioning. 5
2.3 Business Hierachy of Need. 6
4.1 Valve Spend Supplier Appraisal 10
1.0 Introduction
SADARA is a company started in October 2011 operating in the oil industry. According to Sadara (2017), the company is a formation of a joint venture established by the Saudi Arabian Oil Company (Saudi Aramco) and the Dow Chemical Company (Dow). The company procurement vision is the provision of outstanding procurement services through an approach of maximization of value creation and supporting company growth. This is with an ultimate target on the customer service, adopting industry best-in-class practices, acting as a local content advocate and operating ethically. In the context of Sadara, sourcing is a method implemented for development and management of approaches for acquiring goods and services for supporting the various business needs. the rationale for setting procurement division for sourcing can be attributed to the fact that organizations are currently operating in an environment identified by multiple economic and political disruptions to their sources of suppliers and services. As noted by Kilian (2006), the supply market nature is characterized by numerous uncertainties hindering sustainability linked to innovation and adoption. Hence, this assessment will identify four sourcing strategies and for each method detect and explain the extent to which they are applied in Sadara organization in particular areas of spend. In addition, a supplier appraisal checklist for one of the spend shall be developed. in order to identify the right sourcing approach for a category spend, it’s strategic positioning through Portfolio (kralij analysis and “Business hierarchy of needs” CIPS 5 rights) shall be carried out. The division spends that will be examined Valves, logistics, chemical waste management and uniforms.
2.0 Sourcing Spend Categories and Positioning
Sourcing is categorized as one of the instrumental purchasing department responsibilities, and it plays a significant role in an entity survival and growth. This is in tandem with Kilian (2006) who noted that since the materials which are sourced from the outside instead of being synthesized by the in-house facilities establish the quality of a service and buyer’s profitability. The current identification of the implications of a close buyer-seller alliance of the parties involved has contributed to altering the sourcing strategy into an immense deal of attention. To identify the most appropriate sourcing strategy in this assessment, it is necessary to first categorize the different spend categories in a well-structured form of necessity and demand of the products.
2.1 Portfolio Kraljic analysis
The usage purpose of the Kraljic analysis tool……………………………………………………………………………………………………………………………………………..Please contact our team to receive support, guidance and tutorial services on this assessment in full based on your organisation background and position
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