How can you measure the effectiveness of your global sourcing and procurement strategy?

After implement Global Sourcing on our organization we had improved the total cost of ownership (TCO) based on: volume price agreement, after bringing together all demand around the plants and complete analyses spend specially for EE-active. Global negotiation for EE-passive with pass-through cost direct with manufacturers and cost break-down analyzes together with near-shoring and re-shoring to consider freight, clearance and exchange rate.

The best metric is the volume adjusted cost of goods sold material as suppled by Finance. If it is decreasing year over year, you are performing. Get your data from Finance. In that way, no one can accuse you of fabricating results.

1) Level of reduced total cost of ownership (TCO) by leveraging lower prices, taxes, and tariffs in different markets. 2) Level of Reduced hidden costs and risks associated with global sourcing and procurement, such as transportation, logistics, customs, compliance, quality, and currency fluctuations. 3) Level of Product quality and compliance of your suppliers. 4) Quality and effectiveness of your supplier relationship management (SRM). 4) Level and impact of risk exposure and mitigation. 5) Degree and consistency of alignment with your overall business strategy and objectives. 6) Degree of supporting and enhancing your competitive advantage, value proposition, and customer satisfaction.

The best measure of global sourcing and procurement strategy are price, delivery, service and quality stability. Responsive, adaptive, agile and flexible supply chain ensures that communication is being received and responded to in a timely manner, and preceding actions are productive. Feedback and continuous improvement (technology, internal training (cultural & negotiation) can enhance and strengthen relationships conducive to achieving supply chain goals.

?? 1. Supplier Performance Metrics: ?? Monitor on-time delivery rates ?? Evaluate quality compliance ?? Assess supplier reliability ?? 2. Cost Savings Analysis: ?? Track cost reductions ?? Compare prices with market benchmarks ?? Analyze total cost of ownership ?? 3. Operational Efficiency: ?? Optimize order fulfillment cycles ??? Enhance lead times ?? Minimize stockouts and excess inventory ?? 4. Risk Management: ??? Identify and mitigate supply chain risks ?? Establish contingency plans ?? Diversify supplier base for resilience ?? 5. Continuous Improvement: ?? Conduct regular performance reviews ?? Implement feedback-driven enhancements ?? Adapt strategies based on market changes

Las auditorías internas con el departamento de desarrollo de proveedores o los compradores mismos disminuyen en gran medida el costo de calidad no debemos dar por hecho que el proveedor conoce las especificaciones de calidad que requerimos debemos tener una sinergia y relación cercana con el proveedor los detalles técnicos deben cerrarce en conversaciones.

Uma das formas mais utilizadas para identifica??o de fontes seguras, s?o as certifica??es de qualidade e conformidade. Se o seu fornecedor possui certifica??o ISO 9001 por exemplo, atende as normas regulatórias e possui os documentos comprobatórios para tal finalidade, s?o sinais claros que essa fonte é segura. Porém, tais certificados e atendimento a normas, n?o te isenta de realizar os controles e planos periódicos de auditoria.

This is one of the critical challenges of the global sourcing approach. You must unify the internal organization's measure of quality and compliance before you conduct the external audits, especially when the company has many sites around the world, which leads to many customized requirements and rules on the country level.

Metric to measure Sourcing and supply chain effectiveness varies with Business ecosystem .Beside cost and Quality which are common attributes in each business however in this VUCA word sustainable and Resilient supply chain is key metric and this can be ensured with more collaborative approach and supply engagement at early stage of Product development.

Definitivamente creo que hay q establecer quienes son tus business partner o aliados estratégicos para tener claras las reglas del juego que permitan establecer indicadores de gestión que permitan un control basado en un abastecimiento estratégico y risk management para consolidar la sostenibilidad del negocio.

Basic SRM measures ensure that suppliers meet their commitments. In more complex deals, a broader set of measures can be used to evaluate important relationships, and to make sure that your relationship continues to be constructive.

In supplier relationship management for global sourcing and procurement, assess effectiveness through supplier performance metrics, cost savings, on-time deliveries, and quality adherence. Solicit stakeholder and supplier feedback for insights, allowing refinement of strategies and fostering stronger global partnerships for enhanced procurement efficiency.

A comprehensive risk management plan should be prepared with the supplier, and updated regularly. These will include risk mitigation, and focus on residual risk management.

Analisar o risco é mandatório, para facilitar a visualiza??o, pode ser utilizada uma análise SWOT para identificar o cenário e realizar os planos de a??o pertinentes para mitiga??o dos riscos observados. O 5W2H também é uma boa ferramenta amplamente conhecida para determinar as a??es, os prazos e os responsáveis.

El abastecimiento no es únicamente la adquicion de materiales y sus implicaciones. La relación con la planeación de la demanda y la programación de produccion de las plantas permite saber en que momento y que cantidades tener la materia prima o números de parte. En este sentido es una estrategia que evita las sobrecarga de trabajo a calidad y almacén. Así permite tener en control las perdidas y scrap de la compa?ía.

I definitely agree that having a strategy and goal alignment are crucial for any group to achieve success. Working towards the same objectives makes a difference within the group and overall work environment.

Supplier On Time Delivery (OTD), which will not affect Customer OTD, avoid financial penalties to preserve the margin, neither those savings previously reported.

Algo que me ha servido es la estrecha relación con todas las áreas y en especial la coordinación con las que confiere la cadena de suministro (planeación, logística y compras)

Supplier Diversity: Track the diversity of suppliers in terms of geography, size, and ownership structure. A diverse supplier base can indicate a more resilient and adaptable procurement strategy. Innovation Measure the number of new products, services, or processes introduced through collaboration with suppliers. This can indicate a procurement strategy that encourages innovation and collaboration. Sustainability and Social Responsibility: Track the environmental and social impact of the procurement strategy, such as carbon footprint reduction, labor practices, and community engagement. Procurement ROI: Calculate the return on investment (ROI) of procurement initiatives, such as cost savings, revenue growth, or productivity improvements.

Contract management is crucial for ensuring that all parties meet their obligations and for sustaining robust business relationships. Efficient contract management requires thorough planning, negotiation, execution, and monitoring to mitigate risks and enhance performance. Employing contract management systems can streamline procedures, track progress, and safeguard contract documents.