Have a plan!

Add comment May 27th, 2008 David Bush - Iasta

Last week, I read a good summary from Sourcing Innovation, which covered another article about strategic sourcing planning - by Robi Bendorf of Bendorf & Associates. Micheal recaps the planning highlights as:

1. Category Description
2. Current Business Strategy for Category Utilization
3. Strategic Sourcing Team
4. Category History
   • Total Annual Volume
   • Historical Price Changes
   • Lead Time History
   • Cost Improvement History
5. Current Supplier Overview
   • Supplier Financial Data
   • Quality
   • Delivery
   • Innovation
   • Supplier Relationship
6. Current Process Overview
   • Supplier Segmentation
   • Supply Chain Map
   • Supplier Selection
   • Contracting Method
   • Ordering Process
   • Performance Measurement
   • Inventory
7. Supply Market Overview
   • Marketplace Suppliers
   • Marketplace Buyers
   • Competitor’s Sources
   • Market Trends
   • Major Raw Materials
   • Cost Drivers
   • Company Bargaining Power
   • Market Indexes
8. Cost / Value Analysis
9. Plan Objectives
   • Short Term Objectives
   • Long Term Objectives
   • Relationship to the Corporate Business Plan
10. Implementation Strategies
11. Action Plan

The ISM conference usually has a good break out session, every year, that is similar to this. These are invaluable training sessions for companies to see what is going on inside their “Best in Class” sourcing peers. It is interesting to note, that all of these things are done in preparation for launching a wide scale strategic sourcing program. Like many things in this area of focus, the creation can be done internally, with consultants, or through software vendors that focus on these disciplines. It is critical to have all the pieces in place before setting up an eSourcing application. Your results will be good without a formal structure, but they will be fantastic with a good plan.

Entry Filed under: General, Supply Management Best Practices