Demand Management Volume Leveraging Address factors such standards, requirements, policies reduce related internal demand Aggregate like goods/services across organize,anal units order leverage negro,ate belle pricing terms, condo,ions Source: Cross (2007) 3 procurement decision must consider the Total Cost of Ownership, not just the purchase price. 4 The Formal Strategic Sourcing Process Conduct Opportunity Assessment Profile Us apply Market Develop Issue RFC Negotiate Implement and Manage Performance What buy? From whom? How buy did it oh t? 5 Eagle Industries Case Questions 2. . 4. 5. 6. Why are office products frequently chosen as a lead commodity in strategic sourcing efforts? What observations can you develop about Eagle’s SKIS usage, prices they pay and contracts they currently use? Discuss potential implementation barriers. Perform a supplier market analysis and discuss strategic sourcing leverage points you observe. Use information given in the case to estimate potential savings. I am looking for specific numbers here. Use the information you assembled thus far to develop a sourcing strategy for Eagle. A. B. C. D. 7.
Should they pursue a centralized or decentralized strategy? Should they use contract, catalog, or Internet suppliers? Should they deal with a single supplier or multiple suppliers? How should they structure the contract for Super As, A, B, and C items? What is your recommendation for implementing the strategy? Copyright 2013 Elena Kate, University of 6 Office Products rage Spend: typically $200 – $1 500 per employee. Widely available Many suppliers: potential for competition Implementation barriers often lower/reasonable Administrative purchasing often causes problems.