Strategic Supply Chain Purchasing and Management

Introduction:

Organizations today operate in a highly competitive scenario and thus need to create and efficiently execute well-thought-out strategies for sourcing goods, parts, equipment, and services to cut down on operational costs while improving quality and productivity. This strategic purchasing and supply chain management course aims to shift the perception of supply management from a tactical to a strategic function, positioning purchasing as a core element of business performance.

The course explores critical concepts such as cost/price analysis, value analysis, total cost of ownership (TCO), and sophisticated supply chain management techniques. Participants will gain insights into modern procurement practices and how these concepts impact financial performance.

Objectives:

At the end of this Strategic Supply Chain Purchasing and Management course, participants will be able to:

• Investigate elements of cost within the supplier’s price.
• Appreciate the complexities of comparing international labor rates.
• Build a purchasing coding system.
• Understand the impact of volume on pricing.
• Classify different supplier pricing models.
• Address issues related to supplier/contractor overheads.
• Develop a purchase price index.
• Collect and analyze supplier cost details.
• Devote more time to strategic concerns.
• Acquire skills in negotiation planning and strategies.
• Explore methods of price and cost analysis.
• Apply principles of value engineering.
• Understand the development of "should cost" models.
• Identify various Total Cost of Ownership (TCO) systems.
• Implement TCO analysis.

Training Methodology:

• Case Studies
• Interactive Workshops
• Simulations
• Role-Playing
• Group Discussions
• Scenario Analysis

Course Outline:

Unit 1: Setting the Strategic Direction

• Articulating the mission and vision of supply management
• Steps to achieving best practices in supply management
• Planning for change and being strategic
• Core skills in supply management
• Creating spend analysis
• Allocating organizational resources
• The essence of ABC (Pareto) analysis
• Developing purchasing material/services codes

Unit 2: How Do You Know That You Obtained a Good Price

• Models for supplier pricing
• Scope of cost and price analysis
• Cost vs. price analysis
• Tools for selection
• Techniques for price analysis
• Historical price analysis
• Producer price indexes
• Formulating purchase price indexes
• Identifying cost relationships

Unit 3: Understanding and Using Cost for Better Price

• Types of cost analysis
• Structure of cost
• Overheads in supplier costs
• Work breakdown structure
• Advocacy for “should cost”
• Supplier demand information
• Confusion in studying supplier cost elements

Unit 4: Price Volume Analysis, International Labor, and Value Analysis

• International pricing of industrial labor
• Foreign exchange and currency policies
• Cost-volume-profit relationship
• Variable and fixed costs definitions
• Cost volume utilization
• Calculating fixed and variable costs
• Definition and criteria of value analysis
• Supplier value checklist

Unit 5: Total Cost of Ownership (TCO) Concepts

• Evolving supply management
• Understanding TCO
• TCO goals
• Hindrances to TCO
• Flowchart of TCO
• TCO strategies
• Dollar and value models
• Supply chain total cost modeling
• Features of TCO