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Procurement & Sourcing Introduction - Coggle Diagram
Procurement & Sourcing
Introduction
Difference Between Commodity and Category Management
Similarities
Based on the criteria set by each business to choose a qualified supplier.
Conduct negotiations, manage contracts, request quotes, negotiate prices.
Difference
Category
Manage the entire strategic sourcing and strategic purchasing process.
Responsible for product selection and marketing sales,
Retail, distribution.
Commodity
Commodity makes sourcing decisions, competitiveness and performance management.
The Differences Between Purchasing And Procurement.
Similarities
Both are important activities in the supply chain of enterprises.
Quality and quantity of products
Difference
Limit
Procurement is broad, including activities before, during and after the purchase.
Purchasing is narrow, the transaction function of Procurement.
Rule
Purchasing is the end result, that is the transaction.
Procurement is a set of all strategies and implementations aimed at achieving the effect of purchasing.
Strategic Supplier Relationship Management – Do’s and Don’ts
Do's
Expect suppliers to contribute to and advance your company strategy and your company performance
Relationships must be genuine and not contrived
Thorough understanding of the supplier organization
Every Supplier should have a Relationship owner designated along with an Executive sponsor
A governance process needs to be in place to ensure the relationship and performance are managed proactively
Communications strategy and relationship development roadmap for every single Preferred and Strategic supplier
Expect to contribute to and advance your suppliers performance
Clear set of standardized metrics and a scorecarding system
Suppliers must be electronically connected with your systems
Have a formal, visible process to progress suppliers through your relationship management continuum
Don'ts
Don’t allow strategic suppliers to remain there forever.
Don’t let your strategic suppliers to take advantage of you.
Don’t go over to the Dark Side
Don’t make a supplier strategic for false reasons.
Don’t be afraid to hold strategic suppliers to account and to remove them if necessary.
Don’t ignore new prospects because of existing strategic suppliers.
Don’t abuse the relationship. Having a solid relationship will always help you get through difficult situations.
Don’t ignore the relationship.
Don’t expect this to be a one sided relationship where you only get the benefits.
Supplier Collaboration is a Win-Win Strategy
Working together to find the best solution to the problem of mutual cooperation.
3 main factors to create "win-win"
Commitment
Dependent
Trust
Challenges in procurement in an organization
Supplier-related issues
Adopt technology
Lack of transparency
Risk mitigation
Inaccurate data
Dark purchasing