tailieunhanh - Lecture Purchasing and supply chain management (3/e): Chapter 2 - W. C. Benton

Chapter 2 - Purchasing decisions and business strategy. In chapter 2, a framework for linking purchasing decisions with the firm’s competitive strategy is presented. The framework offers a systematic approach for designing purchasing strategies consistent with a firm’s competitive strategy. Supply management can play a significant role in making a firm competitive. | 1 Chapter 2: Purchasing Decisions and Business Strategy Purchasing and Supply Chain Management, 3rd edition, . Benton, Jr., Copyright 2013, All rights reserved Previously In most industrial firms, material constitutes 60–80 percent of the total revenue dollars. Competitive leverage can be developed through purchased inputs Link the competitive strategy with the purchasing policy 2 Components of Purchasing Strategy Purchasing actions are determined by the firm’s competitive priorities its resource capabilities the environment Purchasing strategy must consider competitive priorities organization’s strengths and weaknesses competitive environment 3 Example 4 Purchasing/Buying Criteria Must reflect firms’ competitive priorities Example: Cost priority high priority to purchasing costs Flexibility priority high priority to lead time in buying material 5 External Environment Environmental Factors Inflation rate Monetary policy Fiscal policies Technological development Industry capacity . | 1 Chapter 2: Purchasing Decisions and Business Strategy Purchasing and Supply Chain Management, 3rd edition, . Benton, Jr., Copyright 2013, All rights reserved Previously In most industrial firms, material constitutes 60–80 percent of the total revenue dollars. Competitive leverage can be developed through purchased inputs Link the competitive strategy with the purchasing policy 2 Components of Purchasing Strategy Purchasing actions are determined by the firm’s competitive priorities its resource capabilities the environment Purchasing strategy must consider competitive priorities organization’s strengths and weaknesses competitive environment 3 Example 4 Purchasing/Buying Criteria Must reflect firms’ competitive priorities Example: Cost priority high priority to purchasing costs Flexibility priority high priority to lead time in buying material 5 External Environment Environmental Factors Inflation rate Monetary policy Fiscal policies Technological development Industry capacity Market growth Global stability 6 Supply Chain Strategy Reasons for the emergence of supplier partnerships as a competitive weapon: Increased competition Deregulation Relaxed antitrust requirements Increased use of electronic data interchange (EDI) Increased just-in-time (JIT) manufacturing 7 Supplier Partnerships Companies participate in a variety of supplier relationships and roles A supplier A customer An end-user of products Supplier partnerships can be categorized using five factors: (1) degree of risk/reward (2) type of relationship (3) information (4) planning (5) asset ownership 8 The Integrated Buying Model In buying decisions, multiple goals must be satisfied within the constraints 9 Cost Quality Supplier Lead Time The Strategic Sourcing Plan The purchasing function must be integrated into the firm’s overall strategic plan. A strategic sourcing plan requires: A complete understanding of corporate strategies and marketing plans An extensive evaluation/study of current suppliers, how performance is measured, and the expectation of suppliers relative to the industry Study of the degree of global purchasing opportunities Identification of total costs associated with current purchasing department/ function, budgets, staffing, and so forth 10 Questions? 11