第十一單元 ： Sourcing Decisions in a Supply Chain
Sourcing Decisions
in a Supply Chain
蔣明晃教授
【本著作除另有註明外，採取創用CC「姓名標示
－非商業性－相同方式分享」台灣3.0版授權釋出】
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Outline
► The Role of Sourcing in a Supply Chain
► Supplier Scoring and Assessment
► Supplier Selection and Contracts
► Design Collaboration
► The Procurement Process
► Sourcing Planning and Analysis
► Making Sourcing Decisions in Practice
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The Role of Sourcing in a Supply Chain
► Sourcing is the set of business processes required
to purchase goods and services
► Sourcing processes include:
– Supplier scoring and assessment
– Supplier selection and contract negotiation
– Design collaboration
– Procurement
– Sourcing planning and analysis
3
Benefits of Effective Sourcing Decisions
► Better economies of scale can be achieved if orders are
aggregated
► More efficient procurement transactions can significantly
reduce the overall cost of purchasing
► Design collaboration can result in products that are easier to
manufacture and distribute, resulting in lower overall costs
► Good procurement processes can facilitate coordination with
suppliers
► Appropriate supplier contracts can allow for the sharing of risk
► Firms can achieve a lower purchase price by increasing
competition through the use of auctions
4
Supplier Scoring and Assessment
► Supplier performance should be compared on the basis
of the supplier’s impact on total cost
► There are several other factors besides purchase price
that influence total cost
5
Supplier Assessment Factors
►
Replenishment Lead Time
►
Pricing Terms
►
On-Time Performance
►
►
Supply Flexibility
Information Coordination
Capability
►
Design Collaboration
Capability
►
Exchange Rates, Taxes,
Duties
►
Supplier Viability
►
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Delivery Frequency / Minimum
Lot Size
►
Supply Quality
►
Inbound Transportation Cost
Supplier Performance Factors and Their
Impact on Total Cost
Purchase
Price of
Component
Inventory
Cycle
Safety
Replenishment LT
X
On-time performance
X
Supply flexibility
X
Delivery frequency
Supply quality
X
X
X
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X
X
X
X
Information coordination
Design collaboration
X
Exchange rates & taxes
X
Supplier viability
Production
Introduction
Time
X
Inbound transportation
Pricing terms
Transportation Cost
X
X
X
X
X
X
X
X
Example
Green Thumb has historically purchased a thousand bearings per
week from a local supplier who charges $1.00 per bearing.
The purchasing manager has identified another potential source
willing to supply the bearing at $0.97 per bearing, and wants to
evaluate two suppliers.
The local supplier has an average LT = 2 weeks, SD = 1 week and
delivers in batches of 2000. The new source has an average LT = 6
weeks, SD = 4 week, and requires a minimum batch size of 8000.
Assume 25% holding cost and a continuous review policy is used.
Also aim for 95% service level.
Standard deviation=300
Which supplier should the manager go with?
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Analysis
► Use current local supplier:
– Annual material cost = 1000  52  1 = $52,000
– Average cycle inventory = 2,000 / 2 = 1,000
– Annual cost of holding cycle inventory = 1,000  1  0.25 = $250
– Standard deviation of demand during lead time =
2  300 2  1000 2  12  1,086 .28
– Safety inventory = NORMSINV(0.95)  1086.28 = 1,786.77
– Annual cost of holding safety inventory = 1,786.77  1  0.25 =
$446.69
– Annual cost of using current supplier = 52000 + 250 + 446.69=
$52,696.69
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Analysis
► Use new supplier:
– Annual material cost = 1000  52  0.97 = $50,440
– Average cycle inventory = 8,000 / 2 = 4,000
– Annual cost of holding cycle inventory = 4,000  0.97  0.25 =
$970
– Standard deviation of demand during lead time =
6  300 2  1000 2  4 2  4,066 .94
– Safety inventory = NORMSINV(0.95)  4,066.94 = 6,689.52
– Annual cost of holding safety inventory = 6,689.52  0.97 
0.25 = $ 1,622.21
– Annual cost of using new supplier = 50440 + 970 + 1,622.21 =
$53,032.21
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Supplier Selection
► Several mechanism: competitive bids, reverse auctions,
direct negotiation
► Single vs. multiple sourcing:
– Single sourcing: guarantee the supplier sufficient business when
supplier needs to make buyer-specific investment; easily
coordinate
– Multiple sourcing: back-up
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Design Collaboration
► 50-70 percent of spending at a manufacturer is through
procurement
► 80 percent of the cost of a purchased part is fixed in the
design phase
► Design collaboration with suppliers can result in reduced
cost, improved quality, mass customization and
decreased time to market
► Allow manufacturer to be a system integrator
► Enabler for common parts: a good database of existing
parts and design
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Design Collaboration
► Important to employ design for logistics:
– Reduce transportation, handling cost: packaging
– Reduce inventory costs: postponement and mass
customization
► Important to employ design for manufacturability: ease to
manufacture
– Part commonality, systematic parts, combining parts,
using catalog parts
► Manufacturers must become effective design coordinators
throughout the supply chain
本作品轉載自Microsoft Office
2007多媒體藝廊，依據
Microsoft 服務合約及著作權法
第46、50、52、65條合理使用。
13
The Procurement Process
► The process in which the supplier sends product in
response to orders placed by the buyer
► Goal is to enable orders to be placed and delivered on
schedule at the lowest possible overall cost
► Two main categories of purchased goods:
– Direct materials: components used to make finished
goods
– Indirect materials: goods used to support the
operations of a firm
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Differences between Direct and Indirect
Materials
Maintain, Repair, Operation,
Direct Materials
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Indirect Materials
Use
Production
MRO
Accounting
Cost of goods sold
SG & A
Impact on
production
Any delay will delay
production
Less direct impact
Processing cost
relative to value of
transaction
Low
High
Number of
transactions
Low
High
The Procurement Process
► Focus for direct materials should be on improving
coordination and visibility with supplier (production plans,
inventory levels, capacity), even have built in alert
► Focus for indirect materials should be on decreasing the
transaction cost for each order by using e-procurement
process
► Procurement for both should consolidate orders where
possible to take advantage of economies of scale and
quantity discounts
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Product Categorization by Value and
Criticality
High
Critical Items
Strategic Items
General Items
Bulk Purchase
Items
Criticality
Low
Low
High
Value/Cost
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Sourcing Planning and Analysis
► A firm should periodically analyze its procurement
spending and supplier performance and use this analysis
as an input for future sourcing decisions
► Procurement spending should be analyzed by part and
supplier to ensure appropriate economies of scale
► Supplier performance analysis should be used to build a
portfolio of suppliers with complementary strengths
– Cheaper but lower performing suppliers should be used to supply
base demand
– Higher performing but more expensive suppliers should be used
to buffer against variation in demand and supply from the other
source
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Making Sourcing Decisions in Practice
► Use multifunction teams
► Ensure appropriate coordination across
regions and business units
► Always evaluate the total cost of ownership
► Build long-term relationships with key
suppliers
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作品
授權條件
作者/來源
本作品轉載自Microsoft Office 2007多媒體藝廊，依據Microsoft 服務合
約及著作權法第46、50、52、65條合理使用。
Russian Coca-cola，作者：Cody Hough，
20
12
本作品轉載自Wikimedia Commons，
(http://commons.wikimedia.org/wiki/File:Russian_Coca-cola_.JPG) ，
瀏覽日期：2012/07/03。
13
本作品轉載自Microsoft Office 2007多媒體藝廊，依據Microsoft 服務合
約及著作權法第46、50、52、65條合理使用。