Who Should Attend

Buyers, sourcing specialists, category managers, negotiators, strategists, those who manage these responsibilities, or others who seek to improve or create value-adding sourcing, category management and supplier relationship skills. The program will be useful to all levels, from entry level buyers to management.

You Will Learn...

How volume aggregation, standardization and resulting economies-of-scale contribute to aggressive cost takeout; How to use spend analysis to identify financial targets; Value-adding strategies and techniques specific to distributors, manufacturers, raw material suppliers, service providers, and the management of true commodities; Techniques for identifying and managing category-specific risk; Managing the costs of administration; and Considerations related to building and retaining a highly skilled, robust professional workforce. In addition, you will learn:

• Four ways to segment spend categories
• 14 important considerations when planning to outsource
• Seven key considerations for retaining skilled employees

You Will Earn...

21 continuing education hours

Course Outline

1. Some Important Definitions: Economies-of-scale; Return on Assets; Profit Margin; Volume aggregation; Standardization; Outsourcing; Non-price related value
2. Spend Analysis
3. Category Segmentation: by spend category; through risk and value analysis (Quadrant analysis and SWOT analysis); other segmentation strategies
4. Category Value Optimization Techniques and Methodologies:
   1. Distributor Relationships — When buyer leverage is low (Distributor relationship management; Competitive bidding; Consortiums). When buyer leverage is high (Distributor relationship management; Understanding supplier cost behavior; Separating supplier fixed and variable costs; Volume aggregation; Standardization) how volume aggregation and standardization generate economies-of-scale
   2. Manufacturer Relationships — When purchasing standard goods (Single unit purchase; Multiple unit purchase); When purchasing non-standard goods (Single unit purchase; Multiple unit purchase); How to create and use leverage; Calculating the financial effect of leverage
   3. Raw Material Supplier Relationships — Assembly operations (Components); Process industries (Feedstocks); Contract manufacturing;
   4. Service Provider Relationships — typical issues related to purchase of services (Scope of work; Supply management expectations); Managing the quality of services (Stakeholder needs analysis); Content of request for proposal; Measuring service provider performance; Managing acquisition of services
   5. True Commodity Supplier Relationships — Commodity exchanges; Commodity pricing; Anti-trust law; Three key pricing arenas (Spot buy; 1-year in advance); the long term strategy — world supply and demand.
5. Key Considerations When Dealing With International Sources
6. Key Considerations in Managing Category-Related risk
7. Managing Administration Costs — Software solutions; Automation techniques; Identifying and eliminating low-value-adding activity
8. Hiring, Training and Retaining Skilled Supply Management Professionals — Hiring from within or from the outside: the pros and cons; A typical supply management training curriculum; Considerations in the retention of skilled employees

© Copyright ISM 2013

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