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Introduction
6. Implement Agreements
7. Continuous Improvement
Develop Category Profile
Step 1
1. Develop Category Profile
Spending Analysis
Supply Market Analysis
Needs Analysis- Interview key users & find out
Their needs for the product,
Their view of the supplier’s performance
Any enhancements that they would like to see in the
product
What content do you absolutely need to satisfy the
present and future requirements of your users?
1. Develop Category Profile
1. Develop Category Profile
Supply Market Analysis using porter’s Five forces model
Develop Sourcing Strategy
Step 2
2. Develop Sourcing Strategy
Leverage Strategic
Use competitive marketplace to Ensure availability of supply
reduce cost
Consolidate Volume as a
negotiation tool
Focus on relationship building
Process integration and innovation
Category
Positioning
Matrix
Non- Critical
Bottleneck
Simplify and streamline purchasing
process Search for alternatives
Reduce No of suppliers and Strengthen relationships
simplify ordering
High Bargaining Power : Exercise Power Low Bargaining Power : Create Advantage
Widening of supplier base
Early Supplier Involvement
Negotiation Team
Senior person
Technical Expert
Observer
Negotiation Strategy
Least acceptable agreement (LAA)
Most desired outcome (MDO)
Best alternative to a negotiated agreement (BATNA)
6. Implement Agreements
Preparing the contract
Raising the PO
Blanket
Blank Check PO
System Contracting
Supplier Performance Management
Value analysis
Target Costing