Strategic Sourcing in a Data-Driven Decision-Making World

Transcription

1 Strategic Sourcing in a Data-Driven Decision-Making World Victor B. Wayhan, Ph.D. Supply Chain Management Program C.T. Bauer College of Business University of Houston 1

2 The Competency Gap Knowledge, Skills, and Abilities (KSAs) Current KSA Level Required KSA Level Gap Due To: Not Enough SCM Programs Rapidly Changing SCM Knowledgebase

3 Defining Terms Knowledge A body of information of a factual or procedural nature which, if applied correctly, makes adequate performance on the job possible. Ex: Developing a Strategic Sourcing Plan Skills Proficient manual, verbal, or mental manipulation of data. Skills can be readily measured by a performance test where quantity and quality of performance are tested within an established time limit. Ex: Excel Skills Test Abilities Power to perform an observable activity at the present time. The abilities have been evidenced through activities or behaviors that are similar to those required on the job. Ex: Managing The Shipment of Finished Products

4 Skills Analytic The ability to analyze data and to draw insights from that analysis for future decision-making. Era: Data-driven decision-making Companies are sitting on mountains of relevant data Can you go get the relevant data from your company s ERP system and upload it into your data analytical tool of choice? Can you utilize your data analytical tool of choice to slice and dice the data in order to gain insights for future decision-making?

5 Strategic Sourcing The seven-step procurement process where a firm strategically evaluates, selects, and partners with a group of rationalized suppliers in order to aggregate demand, leverage spend, and achieve operational performance improvements (not just cost reduction). Key: Strategic sourcing is not sourcing strategically!

6 Strategic Sourcing Process Seven Step Process 1. Spend Analysis 2. Supply Market Assessment 3. Total Cost Analysis 4. Supplier Identification/Evaluation 5. Sourcing Strategy 6. Supplier Negotiation/Selection 7. Sourcing Strategy Implementation

7 Spend Analysis Detailed analysis of how much the company is spending in a particular category or commodity classification. Key Problem: Poor Spend Visibility Difficult to Determine True Category Spend Legacy Systems, Messy Data Clean Data: Vendor Families, Vendor Normalization, Standardized Part Descriptions

8 Strategic Sourcing Performance Potential Savings: 2-15% of total spend.* * Pandit Spend Analysis: The Window Into Strategic Sourcing Lost Savings: Maverick Spend: Supply personnel not buying through the supply contract. Non-Compliance: Failure of the supplier to adhere to the supply contract terms and conditions. Failure to provide stipulated rebates Failure to correctly price items per quantity discounts Charging for shipping or other non-contract items

9 Recommendations 1. Hire the best sourcing analysts you can find 2. Invest in software systems that provide quality spend data (knowledge is power) 3. Document your actual savings 4. Build a strategic sourcing team

10 UNIVERSITY of HOUSTON Founded: 1929 State of Texas Public University Carnegie Tier One Research University Student Enrollment: 40,600 No. 2 most racially/ethnically diverse university in the nation. 10

11 The C.T. Bauer College of Business Undergraduate Enrollment: ,250 Students Graduate Enrollment: ,420 Students Post Baccalaureate Enrollment: Students Total Enrollment: ,910 Students 11

12 A Major in Supply Chain Management Requirements: 18 Credit Hours (6 Courses) of SCM 4000-level Courses 12 Credit Hours (4 Courses) of Advanced Business Electives Total: 30 Credit Hours (10 Courses) 12

13 The Core Six Curriculum Requirements: SCM 4301 Logistics Management SCM 4330 Business Modeling (Excel) SCM 4350 Strategic Supply Management SCM 4362 Supply/Demand Integration SCM 4397 Strategic Process Management SCM 4390 Supply Chain Strategy 13

14 SCM Certificate Program Strategic Sourcing SCM 4351 Strategic Sourcing and Spend Analysis SCM 4380 Enterprise Operations (SAP) Energy Supply Chain SCM 4302 Energy Supply Chain SCM 4312 Energy Project Management Advanced Analytics SCM 4380 Enterprise Operations (SAP) SCM 4397 Advanced Modeling and Simulation