Understand Your Supply Base: Part 2 of Understand Your eSourcing Options seminar series

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During this seminar A.T. Kearney Procurement Solutions' Vice President of Global Operations, Carrie Ericson, introduces the topic and the instructors: Professor Eberhard "Eb" Scheuing, PhD, C.P.M., founding Chairman of the Center for Purchasing Excellence, and Timothy D. Houghton, Vice President and Chief Procurement Executive of Supply Chain Services at BellSouth Corporation.

Doctor Scheuing prefaces his remarks by stating that the nature and role of suppliers is different from the more common notion of a vendor. The former plays the role of an independent provider of products and services in a relationship with the buyer that involves a sense of continuous improvement, at times to the level of becoming a strategic partner. The latter – the vendor – is a reactive agent involved in case-by-case purchase orders.

Eb's rule of thumb for the participants is to Analyze Your Supply Source. To do so he recommends that buyers pay close attention to a range of key purchasing determinants that include sole sourcing, supplier mix and diversity, supply base size, domestic & overseas sourcing, separate or joint (consortium) sourcing, outsourcing and, of course, eSourcing. He then goes on to explore the important options available to the buyer in examining supply base possibilities – using the familiar progression from Make to Mixed, to Hybrid to Shared and finally to Buy.

Tim Houghton comes at Supply Base Management from a buyer's perspective. In outlining his talk, Tim says that BellSouth had a strategic sourcing goal of taking 10% out of an addressable spend of $7 billion. Using this as his starting point, Tim and his team did what many organizations are now doing: they conducted a rigorous Spend Analysis. This set the stage for their Supplier Market Analysis that is the centerpiece of Tim's presentation.