Essay Example on Stage of the strategic sourcing Process

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STRATEGIC SOURCING FEDEX 1 What are the key elements that must be completed at each stage of the strategic sourcing process 2 How does the governance structure for supply chain management at Federal Express support the strategic sourcing process Linking the SCM support to strategic sourcing process at FedEx Improving the purchasing process with respect to effectiveness or efficiency requires strong sourcing tactics FedEx Supply Chain Management is aimed to leverage the process of souring for all the FedEx family of companies to ease up the processes Center Led Sourcing Process With FedEx re organizing and grouping its services IT Equipment Aircraft and supply chain logistics under the strategic source and supply group has led to Center Led initiative or Center Led Supply Chain management sourcing model We believe that this model houses and focuses on centralizing sourcing strategies Each players in this process has clear role and their responsibilities will not overlap This model facilitated in integration of Ariba Buyer further expanding its use to other operating firms and to process requisitions within a supply chain SCM team have an online data for contracts on submission the requisition is put forward for an approval 



If an individual does not receive any updates on requisition Ariba automatically send Email reminders that will be escalated to leadership During the process FedEx makes sure that several reviews take places with its sourcing process to prevent any miscommunication from happening and ensures the best practice is implemented SCM team is believed to have a single POC for all the pricing negotiations and other transactional elements This lead to migration towards a centralized view of approach towards sourcing These central led sourcing process are under constant scrutiny of stakeholders legal finances dept and are ultimately approved by FedEx corporate of sourcing council Initially the sourcing group lead the initiatives for sourcing and a hand off competency to a supply chain associate is made This competency occurs in Integration Step of 6 mentioned above The Supply chain associates who are to be category associated now ensure the agreement of the supplier thereby responsible for implementation within the specifies marketplace They also hold responsibility of completing scorecard with the supplier FXFD supply chain technology Innovation complements the central led souring enabling greater savings Cost Data management improvements 



Dependability quality speed Central led process also helps in flexibility as SCM can change the business rules according to the C E O portraying a good level of control The company also has a policy indicates larger dollar thresholds should go to the sourcing council activities that will have huge impact on spend or brand image are required to go to the sourcing council as well Supplier SCORECARD The SCM team is bound to determine the threshold limits for supplier metrics The SCORECARD is mainly maintained to manage supplier relationship The SCM associate manages performance assessment and maintains a score ranging from 1 5 they are also given the authority relating to weight percentages to different elements of scorecard The elements are based on the statement of work mentioned in contract If a supplier falls below 350 range the SCM team will have to re evaluate their supply strategy supplier management is completely dependent on SCM teams Each member is assigned responsibility in managing one supplier relationship SCM team is held responsible for business process issues as well they are required to maintain coordination between the supplier and engineering group SCM team has a mixture of elements to deal with under strategic and tactical level this sometimes can be challenging on the SCM associates 3 Are there elements of the strategic sourcing process used at Federal Express that apply to other companies 



The team believes that there are couple of companies would be a great examples of applying partial elements of the strategic sourcing process that FedEx currently implements listed below The Central Sourcing Group FedEx is using central sourcing group strategy which means there is only one team of sourcing analysts will lead the sourcing initiatives As one of the largest multinational technology company Apple works with numerous suppliers and manufacturers which might cause inconsistency in the product quality lead time and price etc FedEx s structure is more reliable as it uses the sourcing group to focus only on company to company level strategies Center Led Sourcing Process FedEx is using Ariba buyer system as their preferred tool in order to purchase MRO Firms like Google and DHL implement different OS but share similar indirect purchases Implementing Ariba gives them a control on their indirect spends through which they obtain more information on contracts w r t MRO Benchmarking The Supply Market FedEx implements supplier scorecard system which our team believes to be critical to any large spending company Starbucks as an example needs to appraise its suppliers and determine which suppliers to contract more with If certain suppliers have poor performance then the company should reconsider the its relationship with the suppliers


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