1st Edition

Supply Market Intelligence A Managerial Handbook for Building Sourcing Strategies

By Robert Handfield Copyright 2006
    666 Pages 88 B/W Illustrations
    by Auerbach Publications

    Supply Market Intelligence: A Managerial Handbook for Building Sourcing Strategies charts the course to success for executives who are seeking to lead their organizations to supply-chain maturity. This volume is intended for supply-chain executives who struggle with the challenges of an uncertain supply market environment and whose supply chain function is constantly buffeted by unexpected changes in customer requirements and commodity prices.

    The author offers a more effective path, describing an integrated approach to supply chain management based upon solid market intelligence. This path is derived from the authors' multiple engagements with organizations such as Suncor Energy, Bank of America, Shell Oil, Honda of America, General Motors, Boston Scientific, Visteon, Federal Express, Sonoco, Duke Energy, Caterpillar, John Deere, GlaxoSmithKline, and many others. He emphasizes that the elements of a successful plan do not arise from a simple vision, instead they require much hard work and a focused approach backed by solid leadership.

    This book begins by defining supply market intelligence and discussing opportunities, the establishment of a project team, and conducting an internal business intelligence assessment. The book then examines the development of business and market intelligence, supplier evaluations, and sourcing strategies. It also explores how to execute a sourcing strategy, manage a strategic supplier relationship, and redesign an organization for effective supply-chain intelligence and strategic sourcing. This volume offers a benchmarking maturity model tool that covers all facets of end-to-end supply-chain management.

    Chapter Outline
    What Is Supply Market Intelligence?
    Moving Supply Management from the Tactical to Strategic
    The Profit-Leverage Effect of Supply Management
    How Mature Is Your Supply Management Function?
    Translating Corporate Objectives into Supply Management Goals
    Bringing Goals and Objectives Together - the Strategic
    Sourcing Process
    A Word on Business and Market Intelligence

    Intelligence and Opportunity
    Chapter Outline
    BI and SMI - A Massive Challenge for Enterprises in the Future
    The Need for a Dedicated BI/MI Centralized Team in Large
    The Push Approach to BI/MI
    Building a Case for Change: Identifying a Trigger
    Have You Spoken to Your CFO about Supply Management
    What Is an Opportunity?
    Detecting an Opportunity
    Types of Opportunities
    Acting on an Opportunity
    From Opportunity to Prospective Project
    Validate the Opportunity and Estimate the Prize
    The Project Proposal
    Intelligence and Opportunity Checklist

    Establishing the Team
    Chapter Outline
    Getting the Project Started
    The CPO and the Project Budget
    The Project Coordinator
    Issuing a Project Charter
    Assess Current and Future Environmental Requirements
    Identify Skills Required
    Recruiting an RM
    Cross-Functional Teams
    Kickoff Meeting
    Distributing Tasks

    As-Is Assessment (Creating Internal Business Intelligence)
    Chapter Outline
    Getting Started: Defining User Requirements
    Internal Analysis
    Identifying Historical Cost and Volume Trends
    Segmenting Spend by User, Type, and Supplier
    Data Warehouse and Data Warehousing
    Creating a Spend Analysis Report, Including Unit-Cost Analysis
    Project Cost and Demand Requirements
    Analyzing Data
    Performing Cost Audit
    Grassroots Interviewing

    Developing Business Intelligence and Market Intelligence
    Chapter Outline
    The Sales and Operating Plan
    The Three Laws of Forecasting Accuracy
    Market Forecasts
    Forecasting Uses
    Forecasting Types
    Characteristics of a Solid Forecasting System
    Six Steps of Forecasting
    Sales and Operations Implementation - Best Practices

    Supply Market Intelligence
    Chapter Outline
    Integrating Market Intelligence with Risk Assessment
    Types of Forecasts
    Assessing Global Logistics Risk
    Tying Together the Elements of Risk
    Eighteen Best Practices For Supply-Chain Risk Management
    Strategic Sourcing

    Supplier Evaluation
    Chapter Outline
    Identifying Key Supplier Evaluation Criteria
    Identifying Potential Supply Sources through RFIs and Secondary
    Market Research
    Organizing Data and Determining If Sufficient Information
    Detailed Financial Analysis
    Total Cost/Value Chain Assessment
    Performing a Detailed Supplier Evaluation through Supplier

    Develop Sourcing Strategy
    Chapter Outline
    Commodity Analysis
    Supplier Preferencing
    Evaluate Strategies
    Finalize Strategy
    Develop Relationship Strategy and Bargaining Position
    Developing a Strategy Position Paper
    Obtain Management Approval of Sourcing and Negotiation

    Execute Sourcing Strategy
    (Nonstrategic Supplier Relationships)
    Chapter Outline
    Introduction - Managing the Transition to Relationship
    What Type of Relationship Is Appropriate for the Commodity?
    E-Procurement and the Purchasing Process
    Purchase Approval
    Release and Receive Purchase Requirements
    What is the Right Approach to a Negotiation?
    Preparing for the Negotiation
    Conducting the Negotiation
    Implementing the Agreement
    Negotiation Planning
    Power in Negotiation
    Building a Contract that Minimizes Risk

    Relationship Management
    (Strategic Supplier Relationships)
    Chapter Outline
    Why Relationship Management? Ten Reasons Why You Need a
    Dedicated Relationship Management Function
    (Handfield and Nichols, 2003)
    Making the Transition from Strategic Sourcing to Relationship
    Organize the Relationship Management Team, Define the Vision
    The Case of Software Development and Proprietary Technology
    Define the Relationship Management Leader, the Team, and the
    Change-Management Strategy
    Operate the Relationship
    Manage Performance, Monitor Relationships
    Common Problems
    Strategic versus Reactive Approaches to Supplier Development
    Supplier Development: A Strategy for Improvement
    CAPS Global Supplier Development Study (1997)
    Supplier Development Efforts That Sometimes Do Not Work
    Can You Trust the Concept of Trust in Supply-Chain
    Relationships? What Does It Mean to Trust?
    Dependence: Too Much Is Never a Good Thing
    Conclusions: Lessons Learned about Relationship Management

    Redesigning Your Organization for Supply-Chain
    Intelligence and Strategic Sourcing
    Chapter Outline
    Leading Organizational Change for SCM
    What Is the Required Organizational Structure for SCM?
    Definition of Skills
    SCM Knowledge Definitions
    Deploying Organizational Change
    What Is Organizational Modularization?
    Rollout of Proposed Organizational Changes
    The Criticality of Building Consensus in Change Management:
    The Role of Cross-Functional Teams
    The Challenges of Partnerships

    Chapter Outline
    Benchmarking Supply Market Intelligence and Organizational
    The SCM Framework
    How Will Organizations Progress through This Framework?
    Maturity Grids
    Behaviors and Roles
    Conclusion - Leading Change in Supply Management

    A Global Sourcing in China
    Low-Cost-Country Sourcing: What about China?
    The Growth of Low-Cost-Country Sourcing
    Barriers to Global Sourcing
    Locating Global Sources
    Identifying New Suppliers Globally
    China's Growing Economic Strength
    Labor Force
    Centers of Growth in China
    Identifying and Negotiating with Chinese Suppliers
    International Exchange Rate Forecasts

    B Best Practices
    Three Best Practices in Supplier Development
    Best Case 1: BMW's Approach to Supplier Development
    Best Case 2: Supplier Development at Chrysler
    Best Case 3: Supplier Development at Honda

    C Case Studies
    Suncor Energy: Foothills Drilling - Relationship Management
    Packaging Manufacturer - Developing an RFP
    Bank of America: Document Management - Supply Market
    FedEx Strategic Sourcing and Supply

    D Coding Systems
    Most Commonly Used Commodity Classification and Coding
    Advantages and Disadvantages
    Industry: Transportation
    Industry: Energy and Utilities
    Industry: Information Technology
    Industry: Plastics
    Industry: Services
    Industry: Steel Manufacturing
    Industry: Textiles
    General Web Sites
    Paid Services
    Supplier Data To Be Collected
    Purchase Order Data To Be Collected
    Sourcing Relationship
    Factors To Be Considered for Strategic Sourcing Process
    E References and Resources
    Other Resources
    Web sites


    Robert Handfield