Strategic Global Sourcing Best Practices

Strategic Global Sourcing Best Practices covers the latest trends and leading edge processes in global strategic sourcing, including supply management, t, sustainability, financial decisions, risk management, and international strategies.

• Offers the latest trends and guidance for sourcing and supply managers
• Features coverage of understanding sourcing, procurement and supply management, procurement and best business practices, best practices in sourcing management and global sourcing management, financial strategies for sourcing, responsible procurement,diversity procurement, managing risk, supplier selection, project management for procurement and supply managers, managing supplier relationships, international sourcing, managing supplier relationships supply management operations,
• With the rise of global supply chains, environmental/sustainability concerns, and constantly evolving technology, the time is right for understanding Strategic Global Sourcing Best Practices.

Preface ix

CHAPTER 1 An Overview of Global Strategic Sourcing 1

The Strategic Sourcing Plan 2

Operational Sourcing Strategy 10

Summary 17

CHAPTER 2 Operational Alignment with Sourcing Strategy 21

Understanding Requirements 21

Opportunity Analysis 28

Category Segmentation 35

Summary 37

CHAPTER 3 Source to Settle (S2S) 39

Why Source to Settle? 39

Implementing an S2S Process 47

Managing the S2S Process 53

Outsourcing the S2S Process 54

Summary 54

CHAPTER 4 Cultural Considerations for Global Sourcing 57

Conducting Business in Other Nations 58

Cultural Values 58

Sourcing Challenges 66

Summary 70

CHAPTER 5 Supplier Research and Market Analysis 71

Conducting Supplier Research 71

Conducting Market Analysis 81

Summary 85

CHAPTER 6 Solicitation of Bids and Proposals 87

Solicitation Planning 87

Solicitation Methods 96

Summary 99

CHAPTER 7 Supplier Evaluation and Selection 101

Evaluation Criteria 101

Summary 123

CHAPTER 8 Negotiation Revisited 125

The Nature of Negotiation 125

Negotiation Strategy 126

Negotiation Planning 129

Developing a Negotiation Plan 130

Exception Conditions 135

Summary 138

CHAPTER 9 Supplier Diversity 139

Diversity Programs 139

The Business Case for Diversity 142

Supplier Diversity Best Practices 144

Global Supplier Diversity 147

Diversity Advocacy Organizations 148

Summary 151

CHAPTER 10 Sustainability 153

Issues in Sustainability 154

Guidelines 163

Criteria for Supplier Evaluation 167

Summary 169

CHAPTER 11 Risk 171

The Nature of Risk 171

Why Is Understanding Risk Important? 172

Risk Management Principles 172

Summary 181

CHAPTER 12 Global Sourcing 183

Developing a Global Sourcing Strategy 184

International Trade Requirements 188

Summary 195

Glossary 197

Suggested Reading 207

About the Authors 215

Index 217

FRED SOLLISH, MS, is the Managing Director of eParagon, LLC, a consulting firm specializing in providing training and working tools for the supply management profession. Fred is former president and CEO of the Institute for Supply Management (ISM) Silicon Valley affiliate and is a longtime member of its Board of Directors. He is also an instructor for sourcing, supply management, and purchasing related courses. His online strategic sourcing program can be found at supplyknowledge.coggno.com.

JOHN SEMANIK, MBA, is cofounder and Director of eParagon, LLC. He has served in senior corporate supply chain management positions at such leading-edge companies as Hewlett-Packard Company, Sun Microsystems (acquired by Oracle), and Xilinx, Inc. John was founder, managing director, and instructor for San Jose State University's Professional Development curriculum in supply chain management and purchasing. He serves on the Board of Directors of the Institute for Supply Management (ISM) Silicon Valley affiliate.

For most of its history, the typical purchasing routine was simple: receive a requisition from the user, place the purchase order with the supplier, expedite when necessary, and resolve invoice discrepancies. This process left very little room for decision-making, such as supply sourcing, and even less room for discretion. Not so any more. Today's purchasing and procurement managers and those they report to are seeing their scope of responsibilities increase along with the impact supply management can have on a company's bottom line.

Addressing the changing roles, responsibilities, challenges, and emerging opportunities in this rapidly evolving field, Strategic Global Sourcing Best Practices provides a one-stop guide to the best practices, latest trends, and leading-edge processes in supply sourcing operations to maximize your company's bottom line. Authors and industry experts Fred Sollish and John Semanik share their decades of global supply experience to provide you with the latest hot topics currently transforming the field, including sourcing management, financial decisions, risk management, and international strategies.

This hands-on reference gives you a step-by-step overview of the strategic sourcing process, including the importance of understanding your corporation's mission and vision statement, environmental analysis, SWOT analysis, assumptions, objectives, strategy, and implementation. The book also explains the supply sourcing operational analysis process and the formation of operational plans and objectives, including spending analysis, supplier performance issues, competition, and outsourcing opportunities, as well as capturing additional spending, improving internal processes, and the analysis of supply market conditions.

Accompanied by the authors' robust website offering comprehensive guidance on supply management, Strategic Global Sourcing Best Practices emphasizes the state-of-the-art in strategic supply sourcing and how to leverage it, including:

• The strategic sourcing plan

• Operational alignment with sourcing strategy

• Implementing, managing, and outsourcing the S2S process

• Conducting business in other nations

• Conducting supplier research and market analysis

• Solicitation of bids and proposals

• Supplier evaluation and selection

• Negotiation strategy and planning

• Supplier diversity best practices

• Sustainability

• Risk management principles

• Developing a global sourcing strategy

No longer just a static position, procurement has evolved into a vibrant and progressive strategic element in your organization's competitive arsenal. Learn how to harness supply management's profit-boosting potential and achieve higher levels of competitiveness with Strategic Global Sourcing Best Practices.

STRATEGIC GLOBAL SOURCING, Best Practices

For most of its history, the typical purchasing routine was simple: receive a requisition from the user, place the purchase order with the supplier, expedite when necessary, and resolve invoice discrepancies. This process left very little room for decision-making, such as supply sourcing, and even less room for discretion. Not so any more. Today's purchasing and procurement managers and those they report to are seeing their scope of responsibilities increase along with the impact supply management can have on a company's bottom line.

Addressing the changing roles, responsibilities, challenges, and emerging opportunities in this rapidly evolving field, Strategic Global Sourcing Best Practices provides a one-stop guide to the best practices, latest trends, and leading-edge processes in supply sourcing operations to maximize your company's bottom line. Authors and industry experts Fred Sollish and John Semanik share their decades of global supply experience to provide you with the latest hot topics currently transforming the field, including sourcing management, financial decisions, risk management, and international strategies.

This hands-on reference gives you a step-by-step overview of the strategic sourcing process, including the importance of understanding your corporation's mission and vision statement, environmental analysis, SWOT analysis, assumptions, objectives, strategy, and implementation. The book also explains the supply sourcing operational analysis process and the formation of operational plans and objectives, including spending analysis, supplier performance issues, competition, and outsourcing opportunities, as well as capturing additional spending, improving internal processes, and the analysis of supply market conditions.