Strategic sourcing for business process improvements

In this section there are six questions and the topics are included for the bridge exam - so clearly the section wants the supply manager to think strategically in a few areas. These are:

• Regression Analysis: Any Statistics class you have taken should have covered this. To refresh your memory read about regression analysis here. The purpose of the topic here is to think about how you might use the regression analysis to improve process. This is very possible if you have past data. As an example, if you have the past data of the response to RFP's you can see whether a sending out an RFP at the beginning of the week or end of week has impact on response rates. And this can improve your process goinbg forward. In other words think of the data you have and visualize how you might use regression analysis to strategically improve your sourcing process.

• Communicate and disseminate policies: Supply leadership must have a written agreement with top management on policies and procedures. Then these policies must be communicated to everyone in the supply organization. These communications should be a mix of face to face meetings, intranet and document repositories. For e.g. if your procurement organization might have a rule of responding only in writing to questions on open RFP's from prospective vendors. Now this policy must be known to all staff like admin staff that may not be directly responsible for managing the RFP.

• Technology, application and analytic tools: Include ERP systems like SAP and Oracle and here you are required to understand the strategic purpose of the data points being collected and to understand that there is a purpose for every piece of data. see an example of the clean vendor master problem.

• Change management and change initiatives is something you are sure to have experienced in your overall organization. Now think about changing the supply organization and the way it does business. Three questions need to be asked (i) Why you need to change? (ii) What you need to change? (iii) How you might go about implementing change. Do remember that change initiatives often fail in organizations and similar reasons for failure in implementing change can occur in Supply organizations. These include a mismatch between what leaders say and actually do; elements like compensation performance reviews are not aligned to the change mission and expecting change too quickly.

Although this section has a lot of data driven topics, the focus is on how to derive management action that improves supply management processes for better outcomes.