Strategic Sourcing
MNP3701
2017
, Unit 1
Chapter one
(1) Put the phrase "a new competitive environment" in perspective.
A New Competitive Environment
Increasing numbers of world-class competitors
Forced to improve the internal process
Demanding customer base: higher quality, reduced prices, faster delivery
Widely available information sources due to technology (e.g. internet and social
media)
Balance of power between buyers and suppliers
Greater outsourcing
(1.1) What are the drivers for change in a new competitive environment?
World class local and international competitors, helping to improve the internal
process
More sophisticated customers thereby driving prices down, more research is being
done as to what is available
Information more readily available on the internet. Balance of power between buyers
and sellers will be affected
Increased number of competitors and choices leads to higher quality and faster
delivery.
Social media boom means that word of mouth has become an integral part of sourcing
raw materials, P&S.
Increased demand forces organizations to be more flexible and responsive to demands
(2) Outline the importance of purchasing.
• Increased value and savings – focus on supply management. Improving performance
increases customer value.
• Building relationships to jointly reduce costs of the product and service (P&S) and in
turn the supplier contributes innovative ideas that add value to P&S
• Improving Quality and reputation –firms are looking to outsource to concentrate on
areas of specialization and competence
• Reducing time to market – early including of suppliers and engineers to improve
product and process design
• Managing supplier risk- such as poor quality natural disasters and high transport costs
• Generating economic impact- purchasers have the power to move financial markets
• Contributing to competitive advantage – effective purchasing, reputation
(3) Explain and illustrate the following concepts of purchasing and supply management:
MNP3701
2017
, Unit 1
Chapter one
(1) Put the phrase "a new competitive environment" in perspective.
A New Competitive Environment
Increasing numbers of world-class competitors
Forced to improve the internal process
Demanding customer base: higher quality, reduced prices, faster delivery
Widely available information sources due to technology (e.g. internet and social
media)
Balance of power between buyers and suppliers
Greater outsourcing
(1.1) What are the drivers for change in a new competitive environment?
World class local and international competitors, helping to improve the internal
process
More sophisticated customers thereby driving prices down, more research is being
done as to what is available
Information more readily available on the internet. Balance of power between buyers
and sellers will be affected
Increased number of competitors and choices leads to higher quality and faster
delivery.
Social media boom means that word of mouth has become an integral part of sourcing
raw materials, P&S.
Increased demand forces organizations to be more flexible and responsive to demands
(2) Outline the importance of purchasing.
• Increased value and savings – focus on supply management. Improving performance
increases customer value.
• Building relationships to jointly reduce costs of the product and service (P&S) and in
turn the supplier contributes innovative ideas that add value to P&S
• Improving Quality and reputation –firms are looking to outsource to concentrate on
areas of specialization and competence
• Reducing time to market – early including of suppliers and engineers to improve
product and process design
• Managing supplier risk- such as poor quality natural disasters and high transport costs
• Generating economic impact- purchasers have the power to move financial markets
• Contributing to competitive advantage – effective purchasing, reputation
(3) Explain and illustrate the following concepts of purchasing and supply management:
