Topic of presentation: Sourcing Presented by: Adil Akhtar

Reg # 14583 Presented to : Dr Masood

The term sourcing refers to a number of procurement (is the acquisition of goods or services) practices, aimed at finding, evaluating and engaging suppliers of goods and services. Sourcing is the way an organization acquires its needed goods and services in such an integrated manner that functional and hierarchical organizational boundaries are permeated. Sourcing is the process of finding and subsequently managing a source for the input of production.

The overall goals of strategic sourcing is to achieve large and sustainable cost reductions, long-term supply stability and minimization of supply risk.

Reduce cost & delivery cycle time. Improve quality & long term financial performance. Increase no of global competitors. Increase customer focus. Reduce high cost of globalization and material. Deliver more innovative products more frequently & cheaply than competitors.

Successful sourcing strategies are different for functional products and for innovative products. Functional product : are commonly low profit margins with relatively stable demands and high levels of competition. Innovative products : are characterized by short product life cycle, volatile demand, high profit margin, and relatively less competitive.

The following is a frame work for developing successful sourcing strategies. Step 1 : the firm's suppliers are classified as belonging either to innovative or functional category. Step 2 : the goal and strategies of the supply chain are developed. Step 3 : set goals for improving capabilities. Step 4 : implement work plan. Step 5 : monitor progress & adjust the work plans.

Is the most often the initial supply chain management effort buyer-supplier partnership are easier with a reduced supply base. Supply base reduction result in : Reduce purchase price. Fewer supplier management problem. Closer and more frequent interaction between buyer and supplier. Greater level of quality and delivery reliability.

Key supplier selection is conducted by cross functional team selection approach wherein purchasing staff, primary user, product designer, and manufacturing personal participate.

Primary benefit of e-procurement includes : Cost saving. Free-up time to concentrate on core business. E-procurement system : Enable the concentration of a large volume of small purchases with a few supplier in electronic catalogues, which are made available to the organization users.

Provides incentive to surpass performance goals. punishment, a negative reward, may reduce future business; or a bill back amount equal to the incremental costs resulting from a late delivery or poor quality.

An effective way to improve supply chain performance. Benchmarking data regarding sourcing practice can be obtained in any number of ways, both formal and informal.

Thank you