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This 3 page Class Notes was uploaded by Ameya Margaj on Tuesday February 24, 2015. The Class Notes belongs to MGO 637 at University at Buffalo taught by Dominic LoTempio in Spring2015. Since its upload, it has received 53 views. For similar materials see Purchasing and Global Supply Management in Business, management at University at Buffalo.
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Date Created: 02/24/15
Lecture 3 21615 lf dealing with something out of your expertise you might as well nd someone who is an expert at the deal offer which is not your forte Dispute and if it goes into court then should consider the cost of litigation value if won and value if lost Chapter 6 Supply Mgmt amp Commodity Strategy Development Commodity Strategy or Mgmt looking at speci c types ex IT commodity Overall strategy D overall products 2 types of purchases commodities and services Align objectives with objectives of rm le diff than stock items strategy Downsizing of employees to decrease cost D not ideal Reduce cost of goods and servicesour focus A larger company will have commodity buyers who specialize in certain commodities They have speci c groups that do speci c items In SCM look at spend data last year and this year Compare what39s the industry standard research and validate what kind of savings you39re making Soft savings Hard savingD Objectives should have a topdown approach Specify goal and how we are going to achieve it Supply base reduction objectives comes from board VP Director optimizing usually means reducing your supply chain Sometimes you add vendors Really looks at the value which you create for your supply chain Spend analysis which dept spent what money where and how much of it was budgeted Did we receive right amount of products and get all the products which we paid for Did we go over the budgeted costs why Opportunities to combine vol standardize product req reduce suppliers exploit market conditions for better pricing Consider impact of mergers and acquisitions during spend analysis Charting during spend analysis is easier to understand of cially Strategic Sourcing ex Buy copper 1 Find specialists who know about copper 2 Find project leader not expert in any one eld But a resource to nd experts 3 Consider stakeholder needs ex Ppl buying copper in case of copper 4 If difference bet you and stakeholder work them out don39t make a decision without them SWOT Strength Weaknesses Opportunities Threats Porters 5 forces model market competition Supplier and buyer bargaining power are ideally equal 0 Market internal competition Rivals Tesla a new entrant in automobile At the moment not a rival as they don39t produce at that much speed They don39t have enough machinery to produce those products o Threat varies from industry to industry 0 Pressure from substitutes 0 Buyer bargaining power if buying a majority of volume then you have the buying bargaining power If all of delphi39s products go to GM then GM has more power Can affect delphi39s business If you buy dell laptops then you don39t have any buying power seller has power in this case CAPS ISM has CAPS research facility CAPS can tell you what the benchmark is in a certain industry RFIRequest for Information used before issuing requisition to a company Don t ask for price in an RFI RFI is basically a pre quali cation survey Supplier research 0 Portfolio analysis Bottleneck very complex and rare ensure supplier continuity spend more on bottleneck items less defects decrease uniqueness of suppliers drive supplier to use something that39s more standard to you Routine like custodial products ex Papersimplify process reduce buying effort Critical ex Tires in an automobile Leverage many sources of supply market and price sensitive somewhat similar to routine ex Laptops dell sony hp Lenovo little more complex than toilet paper might have 2 vendors apple and hp Strategy when critical form partnership with supplier and work closely with them Effective competitive bidding high volume number of suppliers Effective negotiation have only vague specs new items Supplier relationship mgmt continuous monitoring of strategy and supplier Global sourcing establish a presence in foreign markets get relationships setup plants in those markets Ereverse auctions complete specs give logins to suppliers give them time for reverse auctions with description of item It39s not good for supplier relationships If it39s something having multi year contract then standard bid and negotiation useful 0 Orange negotiation story Charisma Presence Power ceo should have power over director Warmth willing to work with ppl Chapter 7 Supplier evaluation and Selection 0 No quotone best wayquot 0 When during new prod development poor existing supplier performance etc 0 Receiving internal user requisitions receive internal dept requests 0 Look for the supplier who gives you the best value depends on quality and price 0 Key sourcing requirements Supplier quality Cost or price Delivery performance Arm s length relationship strictly professional relationship Information search requirements Distributor coz mfgs don39t wanna deal with sales Distributors deal with packaging logistics sales customer returns VMI Vendor Managed Inventory Managed by vendor and paid only when used up
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