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MNP3701
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- University Of South Africa (Unisa)
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STRATEGIC SOURCINGMNP3701: 2nd Semester 2013
Tel: +27 12 753 2134
Cell: +27 72 472 3878
Email: donaldtm@royaltutoring.co.za
Web: www.royaltutoring.co.za
,Page | 1 STRATEGIC
SOURCING
MNP3701
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Source.
Taken from the UNISA study guide and the prescribed textbook.
Introduction to Purchasing and Supply Chain Management – Chapter 1
Chapter Overview
A new competitive environment
Why purchasing is important
“Watch, Listen and Learn. You cannot do it all yourself…..anyone who thinks they do it
is destined for mediocrity.” Donald Trump
, Understanding the language of purchasing and supply chain management
The supply chain umbrella
Four enablers of purchasing and supply chain management
The evolution of purchasing and supply chain management
Page | 2 Looking ahead
A New Competitive Environment
Increasing numbers of world-class competitors
Sophisticated customer base
More performance at a lower cost
Widely available information sources
Balance of power between buyers and suppliers
Greater outsourcing
Factors Driving SCM
Low cost and wide availability of information more closely links the members of a
supply chain
Competition in domestic and international markets requires quickness, agility, and
flexibility
Customer expectations and requirements are more demanding
Major disruptions require the ability of a supply chain to react rapidly
Competition between supply chains, not just companies
Why Purchasing Is Important
Purchased content is a significant part of the cost of goods sold (≥ 55%)
Move from traditional, adversarial buyer-supplier relations to improve supply chain
performance
Purchased content’s impact on product and service quality
Participation in product and process design
Use of cross-functional teams
Early supplier involvement
The supply chain’s impact on competitive advantage
Language of Purchasing and SCM
Are supply chains and value chains the same?
What is supply chain management?
What is an extended enterprise?
Purchasing
“Watch, Listen and Learn. You cannot do it all yourself…..anyone who thinks they do it
is destined for mediocrity.” Donald Trump
, A functional group (i.e., a formal entity on the organization chart) as well as a
functional activity (i.e., buying goods and services)
Aka as procurement
Page | 3 Supply Management
A strategic approach to planning for and acquiring the organization’s current and
future needs through effectively managing the supply base, utilizing a process
orientation in conjunction with cross-functional teams to achieve the organizational
mission
ISM’s Definition
The identification, acquisition, access, positioning, and management of resources
and related capabilities an organization needs or potentially needs in the attainment
of its strategic objectives
Defining Supply Management
Supply Chains and Value Chains
Supply chain orientation – a higher level recognition of the strategic value of
managing operational activities and flows within and across a supply chain
Value chain – primary and secondary support activities that can lead to competitive
advantage
“Watch, Listen and Learn. You cannot do it all yourself…..anyone who thinks they do it
is destined for mediocrity.” Donald Trump
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