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Uderstand buying power and category criticality to position the sourcing category
Determine sourcing approach to maximize the savings/value opportunity
Identify existing supplier base
Identify potential suppliers
Establish supplier minimum requirements
Establish supplier selection criteria
Develop quantitative suppliers evaluation system
List of potential suppliers
Supplier selection criteria
Cost structure
Financial status
Customer satisfaction levels
Support capabilities
Relatives strengths and weaknesses
Buyer’s fit with supplier
How company is viewed
Core capabilities
Strategy/future direction
Culture
Broad customer base
Established product range
Established distribution chanels
Low product innovation
Traditional, unionized business processes
Low patent protection
Emergence of other uses and markets
Emerging overseas markets
High barriers to entry
Emerging overseas suppliers
New products development costs are high
Environmental regulations
Define alternative strategies
Select implementation
Decision on strategic implementation path ( competitive selection or supplier development )
Identify a preliminary solitation/negotiation plan
Develop and distribute the proposal (RFP, RFQ, e-auction)
Receive and evaluate proposals
Develop negotiation strategy
Hold negotiations
Proposal
Proposal responses & negotiation
Final supplier selection
Develop implementation plan/finalize contract
Develop savings/value measurement and tracking process
Execute implementation plan/contract
Implementation plan/contract
Cost savings/value tracking reports
Use information from your stakeholders
Define sourcing category
Identify category characteristics
Perform market analysis and explore category evolution
Determine what in or out of the category
Analyze the spend through systems form a total company's perspective
Assess any industry dynamics in particular
Who are the suppliers that you use now in your company and new suppliers that you might want to use
Is there any technology driven solutions to help the category
Supplier relationship management
Tracking supplier performance
Post award audit and compliance
Contract management and administration
Cost savings/value tracking
Contract driven performance reports/supplier rating system
Cost savings/value reports
Contract and Compliance Reviews
