Question:
Task
Identify four sourcing approaches, and for each one, identify and explain how you apply them to a category of
spend within your organisation.
Choose one of these categories and develop a supplier appraisal check list.
Solution:
ExecutiveSummary
This assessment has delved on evaluatingthe different sourcing approaches and the extent in which they can be applied tovarious spend categories in anorganization. It has been identified thatthe sourcing strategies are instrumental in an entity growth and profit with the needfor a critical sourcing decision being imminent. The sourcing approaches selected include Multiple, single,dual and partnership sourcing. Multiple sourcinginvolves dealing with more than one supplier by the purchaser with singlesourcing employing only one supplier. In regardto dual sourcing, this is an event where there are conflicting needs ofdifferent suppliers to mitigate the limitationsof multiple and single sourcing.Additionally, partnership sourcing exists where there is competitive biddingleading to price wars between the suppliers interms of costs and profits. The company of focus is Sadara which hasventured its interest in the energy sector in Saudi Arabia. the spends had been segmented into strategic, leverage,bottleneck and non-critical items. To establish the best practice of sourcing approach,the spends have been categorized intoprofit impact and supply risks. These included the leverage, non-critical,strategic and bottleneck items. Lastly, a sourcing appraisal for the valvesspend has been provided with a clear criterionbeing clearly demonstrated andhighlighted.
Contents
1.0Introduction. 4
2.0Sourcing Spend Categories and Positioning. 4
2.1Portfolio Kraljic analysis. 5
2.2Spend strategic Positioning. 5
2.3Business Hierachy of Need. 6
3.0Sourcing approaches. 7
3.1Multiple Sourcing: 8
3.2Single Source: 8
3.3Dual sourcing: 9
3.4Partnership sourcing: 9
4.0Supplier appraisal: 10
4.1Valve Spend Supplier Appraisal 10
5.0Conclusion. 11
References. 12
SADARA is a company started in October2011 operating in the oil industry. According to Sadara (2017), the company isa formation of a joint venture established by the Saudi Arabian Oil Company(Saudi Aramco) and the Dow Chemical Company (Dow). The company procurementvision is the provision of outstanding procurement services through anapproach of maximization of value creation and supporting company growth. Thisis with an ultimate target on thecustomer service, adopting industry best-in-class practices, acting as a localcontent advocate and operating ethically.In the context of Sadara, sourcing is a methodimplemented for development andmanagement of approaches for acquiring goods and services for supporting thevarious business needs. the rationale for setting procurement division forsourcing can be attributed to the factthat organizations are currently operating in an environment identified bymultiple economic and political disruptions to their sources of suppliers andservices. As noted by Kilian(2006), the supply market nature ischaracterized by numerous uncertaintieshindering sustainability linked to innovation and adoption. Hence, thisassessment will identify four sourcing strategiesand for each method detect and explain the extent to which they areapplied in Sadara organization in particular areas of spend. In addition, a supplier appraisal checklist forone of the spend shall be developed. in order to identify the right sourcingapproach for a category spend, it’sstrategic positioning through Portfolio (kralijanalysis and “Business hierarchy of needs” CIPS 5 rights) shall be carried out.The division spends that will be examinedValves, logistics, chemical waste management and uniforms.
Sourcingis categorized as one of the instrumentalpurchasing department responsibilities,and it plays a significant role in an entity survival and growth. This is in tandem with Kilian (2006) who noted that since the materials whichare sourced from the outside instead ofbeing synthesized by the in-house facilities establishthe quality of a service and buyer’s profitability. The current identificationof the implications of a close buyer-seller alliance of the parties involved has contributed to altering the sourcingstrategy into an immense deal of attention. To identify the most appropriatesourcing strategy in this assessment, it is necessary to first categorize thedifferent spend categories in a well-structured form of necessity and demand ofthe products.
2.1 Portfolio Kraljic analysis
The usage purpose of the Kraljic analysis tool……………………………………………………………………………………………………………………………………………..Please contact our team to receive support, guidance and tutorial services on this assessment in full based on your organisation background and position
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