strategic sourcing case study pdf

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Strategic Sourcing at Whirlpool China: Finding the Ideal Supplier

By: Martin Lockstrom, Thomas Callarman, Shengrong Zhang

It was April 10, 2011, when the head of Whirlpool's Asia International Procurement Office in Shanghai was informed by his colleagues that the company was about to launch a new energy-efficient…

• Length: 8 page(s)
• Publication Date: Jun 21, 2012
• Discipline: Operations Management
• Product #: W12079-PDF-ENG

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It was April 10, 2011, when the head of Whirlpool's Asia International Procurement Office in Shanghai was informed by his colleagues that the company was about to launch a new energy-efficient refrigerator model in just six months. For the new refrigerator model, the basic difference was in the motor; the current AC motor would need to be replaced with a DC motor, which was more efficient but also more expensive. He would have to find a suitable supplier of DC motors in a very short time. Delayed sourcing of components would cause delays in the production of a new refrigerator, and thus, a later launch of new products. Within the home-appliance industry, the fierce level of competition meant that any delays in launching new products would result in a loss of sales for the stragglers. How should Whirlpool go about the process of finding a suitable supplier for the required DC motor parts? Should the company explore the possibility of developing their current supplier, or should they quickly engage an existing supplier of DC motors?

Learning Objectives

The case study is written for a graduate or MBA course in purchasing and supply management or supply chain management, especially one related to setting up or designing a new supply chain. The case gives students a chance to develop their analytical and decision-making skills on a complex strategic sourcing decision. This case study should motivate students to think about the important dimensions of strategic sourcing in order to identify, evaluate and select the optimal supplier. Overall, the case involves the following issues: Strategic sourcing: searching, evaluating and selecting suppliersSingle sourcing versus multiple sourcing: pros and consTechnology sourcing versus raw material sourcingSupply risk management: hedging and alternative suppliers, mitigating supply chain disruptionsSupplier evaluation and supply-balanced score cards, key performance indicators (KPIs), supplier performance measurementSupplier performance improvement and developmentSupplier quality management: total quality management (TQM), supplier certification (ISO 9001 and TS16949)

Jun 21, 2012

Discipline:

Operations Management

Geographies:

Ivey Publishing

W12079-PDF-ENG

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THE IMPACT OF STRATEGIC SOURCING AND E-PROCUREMENT ON SUPPLY CHAIN PERFORMANCE MANAGEMENT

Major changes are currently taking place within purchasing functions of manufacturing firms. Purchasing is shifting its focus from daily procurement activities to long term, value-adding purchasing and supply chain initiatives. At the same time, it is responding to the challenges and opportunities of electronic procurement (e-procurement), which refers to the utilization of the Internet to buy and sell products and services. The responsibilities of purchasing have changed markedly over the last few decades, Purchasing focused heavily on the transactional elements of the procurement process. Purchasing was accepted as a support function that provides for the sourcing needs of other departments. The development of materials management and introduction of new manufacturing technologies in the 1970s brought pre-and post-production flows closer together. The manufacturing-purchasing interface strengthened, creating a need to align the buying cycle with production requirements. Purchasing started to create a " culture " that could help it to attain a more proactive role in the company and start taking responsibility in product design and development activities. The research reported here was undertaken to understand the impact of purchasing on this thesis supply chain performance by 1) investigating current and emerging e-procurement practices, 2) identifying the critical elements of strategic sourcing, and 3) assessing the impact of strategic souring and e-procurement on firm and supply management performance through empirical investigation.

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A contextual analysis of the impact of strategic sourcing and E-procurement on performance Minkyun Kim Nallan C Suresh Canan Kocabasoglu-Hillmer Article information:

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ABSTRACT The research, based on an interdisciplinary literature review, highlights the strategic choices, various profiles and salient factors of electronic procurement (eprocurement). The authors identify some factors which are important when adopting a strategic, rather than a tactical e-procurement perspective. The article proposes a broad framework for assessing the e-procurement performance relationship and provides an understanding of the impact of e-procurement on organizational performance. The proposed research framework suggests that alignment among business strategy, e-procurement strategy, e-procurement tool, strategic IT capability and strategic typology have a positive influence on a company’s strategic performance. Keywords: Supply chain management; information technology; e-commerce; implementation; purchasing; operations strategy; measurement

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Supplier quality management is one of the very many simple concepts that make a lot of sense to any well meaning organization. Unfortunately, implementing the concept is not very simple and over the years, companies have crumbled due to failure to master the best practices in supplier quality management. Practices such as measuring the performance of suppliers, engaging suppliers in quality management systems, supplier audits, supplier development, integration and competitive supplier selection are a great opportunity to improve organizational performance in terms of customer service delivery levels and operational costs reduction. However, it is worth noting that there are numerous challenges encountered in having such practices accepted by all the stakeholders. The purpose of this study was to determine the effect of supplier quality management on organizational performance, covering all the supermarkets in Kakamega town. The study employed a descriptive survey design and the study population was the procurement managers of the supermarkets. Data was collected using structured questionnaires which were administered by the researchers through a drop and pick technique and it was descriptively analyzed. The study also explored the potential integration of supplier quality management practices into an organization's operations, focussing on the currently available applications. The study recommended that suppliers should maintain reliable records, errors to be identified early, supermarkets to decentralize their management structures, suppliers should conform to specifications and that senior level management should be fully committed especially in supplier development programmes so as to overcome the challenges faced in supplier quality management. Finally, suggestions for further research were given.

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The study sought to establish the determinants of electronic procurement on supply chain performance, the determinants of study were partner relationship, information sharing, supply chain integration and supplier appraisal. The research adopted a mixed research approach which was both qualitative and quantitative to do a survey with Kisii County Tea Factories which were seven in number and they are Nyankoba, Kiamokama, Rianyamwamu, Nyamache, Itumbe, Tendere and Eberege. The departments covered were Procurement, Finance, Administration and those involved with Technical matters. The results of data analysis showed that e-procurement could promote information sharing and supply chain integration. Information sharing demonstrated the development of partner relationship and supported supply chain integration. The partner relationship has variant level of importance across different Factories, since price and quality are more important concerns for the Factories. Finally, the analysis showed that supply chain integration is significantly related to supply chain performance. A questionnaire was used in data collection and analysis was done using Statistical Package for Social Sciences Version (SPSS) 17. SPSS version 17 package was used because it is a comprehensive system for analyzing data and can take data from many types of files and use them to generate descriptive statistics and tabulated reports. The tools used for data analysis were measures of central tendency which were mean, median and mode. From the study, the following are the recommendations as established by the research: There is need to improve the current ERP Chaipro software so that it can bring on board a Purchase to Pay (P2P) process for low value purchases. Also, there is need to modify the system to take care of security concerns and this can enhance trust between the Tea Factories and its suppliers as this will even make them move to a co-destiny relationship within the relationship spectrum.

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Sourcing Strategy

• First Online: 26 November 2021

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• Dmitry Ivanov 4 ,
• Alexander Tsipoulanidis 4 &
• Jörn Schönberger 5  

Part of the book series: Springer Texts in Business and Economics ((STBE))

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This chapter discusses sourcing strategies. It starts with an introductory case study considering the logistics coordination concept of a global car manufacturer. First, the roles of purchasing, procurement, and sourcing in supply chain and operations management are elaborated. The basic elements of a sourcing process are defined. Next, the issues of make-or-buy versus outsourcing, as well as organizational issues in sourcing are discussed. Subsequently, sourcing strategies are classified according to the number of suppliers, geographical supplier distribution, and sourcing principles. The methods of spend analysis and supplier selection are presented. Basic elements of the supplier relationship management (SRM) are classified. All proposed concepts are further illuminated by examples such as the sourcing strategy of a global electronics company and the just-in-time strategy in the automotive industry. Additional case studies, Excel templates, tasks and video streams as part of an E-supplement enrich this chapter.

Find additional case studies, Excel spreadsheet templates, and video streams in the E-Supplement to this book on www.global-supply-chain-management.de !

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Ivanov, D., Tsipoulanidis, A., Schönberger, J. (2021). Sourcing Strategy. In: Global Supply Chain and Operations Management. Springer Texts in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-72331-6_5

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