The Competitive Potential of Supply Management

By Robert M. Monczka and Kenneth J. Petersen

Presented by : Om Joshi

Why Supply Management ?

Supply Management requires a movement away from arms-length relationships toward partnership style relations.
SM involves Integration Co-ordination Collaboration across organisations and throughout the supply chain. It means that SM requires internal (intra-organisational) and external (inter-organisational) integration. Purchasing is still at the core of supply management.

However, new and evolving roles needed for a more strategic approach and the increasingly competitive environment.
Strategic supply management provides that edge. It is estimated that 50% to 70% of an organizations total cost comes from external purchase of goods and services.

Supply Management A weapon

That drives each and every activity that is closely and continuously aligned with the business strategy.

Firms lack this alignment

SM Strategies ideal for any organization

Core Strategies

Extended core strategies

Integrative Strategies

Importance vs. Implementation

Huge gap between the two. Less important tend to be harder to implement. Less implemented ones require integration with collaboration across functions and with supply chain partners such as customers & suppliers. Offer greatest contribution to supply value creation. Innovation, accelerated change management and complexity reduction needs to be the integral part of supply transformation process.

Recommendations for Future Success

The supply chain strategy driving that activity should be closely and continuously aligned with the business strategy. Clearly articulate goals that are important to the business. Focus on transformation process. Resources & capabilities to implement significant change. Leadership action to drive the supply transformation.

Thank You