Category-Led Supply Management with a SupplierLifecycle Approach : A Case Study

University essay from KTH/Industriell ekonomi och organisation (Inst.)

Abstract:

As companies find better ways of dealing with creating value and cost efficiencies in their Procurement areas, one key trend is the concept of Category-led Supply Management (CLSM). CLSM is a concept that takes a cross-functional team that leads a category of services and/or products towards developing sourcing strategies that comply with the corporate objectives through the logical grouping of similar expense items. Each group is driven to satisfy the unique sourcing, contract, payment, performance, and attributes of each spending category. In this process, CLSM creates a strong partnership with suppliers and an ongoing Supplier Relationship Management (SRM) that will satisfy business needs while maximizing the value delivered through the supply base. Considering that the Supplier is always one critical factor present from the start to the end of the ongoing Strategic Sourcing process, seeing the Supplier as a Lifecycle Management process can help companies recognize their suppliers as a prime source of value to the organization that plays a central row in the success of the Procurement Strategy.The following thesis will analyze, in a research method of a case study, a specific Category in a company and explore the relationship that existed between the supplier and the company to illustrate the importance of Strategic Sourcing and how it is implemented in practice by companies. The case study helped understand the importance of involving Supplier Relationships in a Strategic Sourcing process. Finally, the Case study enlightened how having a milestone-by-milestone methodology helped understand how a business operates and how procurement activity impacts upon them when capturing savings by managing a Category.

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