March 11, 2022

Closer and more constructive relationship with service lines and stakeholders Enables productive procurement engagement without compromising service line ownership of strategies and outcomes. Focuses attention on the planning phase which offers the greatest scope for improved performance and ground breaking solutions Provides the toolset and process to support a strategic approach to procurement and helps create a supportive environment Enables realistic targeting of savings and other benefits which are agreed with and owned by service lines. Minimises off contract spend through service line engagement, ownership and sign off Enhances procurement capability within the procurement function and across the organisation

Demand is not a controllable factor; under every situation in different industries, varying demand situations might be encountered. Through demand management it is possible to manipulate the demand in your favor. Most organizations in the beginning face varying demand situations which may not even be favorable to them. Different types of demand situations Negative demand: If the market response to a product is negative, it shows that people are not aware of the features of the service and the benefits offered. Under such circumstances, the marketing unit of a service firm has to understand the psyche of the potential buyers and find out the prime reason for the rejection of the service. For example: if passengers refuse a bus conductor’s call to board the bus. The service firm has to come up with an appropriate strategy to remove the misunderstandings of the potential buyers. A strategy needs to be designed to transform the negative demand into a positive demand. No demand: If people are unaware, have insufficient information about a service or due to the consumer’s indifference this type of a demand situation could occur. The marketing unit of the firm should focus on promotional campaigns and communicating reasons for potential customers to use the firm’s services. Service differentiation is one of the popular strategies used to compete in a no demand situation in the market. Latent demand: At any given time it is impossible to have a set of services that offer total satisfaction to all the needs and wants of society. In the market there exists a gap between desirables and the available. There is always a search on for better and newer offers to fill the gap between desirability and availability. Latent demand is a phenomenon of any economy at any given time, it should be looked upon as a business opportunity by service firms and they should orient themselves to identify and exploit such opportunities at the right time. For example a passenger traveling in an ordinary bus dreams of traveling in a luxury bus. Therefore, latent demand is nothing but the gap between desirability and availability. Seasonal demand: Some services do not have an all year round demand, they might be required only at a certain period of time. Seasons all over the world are very diverse. Seasonal demands create many problems to service organizations, such as:- idling the capacity, fixed cost and excess expenditure on marketing and promotions. Strategies used by firms to overcome this hurdle are like – to nurture the service consumption habit of customers so as to make the demand unseasonal, or other than that firms recognize markets elsewhere in the world during the offseason period. Hence, this presents an opportunity to target different markets with the appropriate season in different parts of the world. For example the need for Christmas cards comes around once a year. Or the, seasonal fruits in a country. Demand patterns need to be studied in different segments of the market. Service organizations need to constantly study changing demands related to their service offerings over various time periods. They have to develop a system to chart these demand fluctuations, which helps them in predicting the demand cycles. Demands do fluctuate randomly, therefore, they should be followed on a daily, weekly or a monthly basis. Organisations should ensure that their categories are well identified to better respond to changes in demand patterns.

In this section, the objective is to compile the global supplier list including all their applicable capabilities. This process will provide a framework for mapping the key suppliers in the marketplace and establish the scheme for evaluating and selecting suppliers through the sourcing process. The outline of supplier strengths and weaknesses will be essential to understanding how the supply base will be able to perform against the objectives of the strategy. In order to properly assess the supplier capabilities, the organisation should review some/all of the concepts below: Identify the worldwide, regional and local capabilities of the supply base for this category. Perform comparisons along the following dimensions: cost, delivery, and quality performance; continuous improvement; design capability; and investment in new technologies. Identify industry leaders Indicate current aggregate delivery and quality performance Indicate which suppliers have the ability to manage sub-tier suppliers and can be integrators 3-year sales volume history; profitability Relevant new product releases, products known to be under development Financial analysis, credit rating Plans for ISO registration company‘s current relationship with the supplier, including certification plans Manufacturing and distribution locations Service facilities When we assess the supplier(s) capabilities, it is important to review all aspects of the suppliers business and any information that may assist in determining the overall supplier evaluation criteria during the sourcing process. Here are a few questions we can ask when reviewing suppliers‘ capabilities. The responses to these questions should be added How are the suppliers‘ geographically distributed? Which suppliers are the market leaders and which are market followers? Do suppliers compete on quality, service, price, or other factors? Is there any obvious competitive advantage held by a supplier? Which companies appear to lead in research and development and innovation?

Strategic sourcing is a fact based and systematic approach that organizations use to optimize the management of their supply chain. The approach focuses on improvement of the overall value proposition. This means that it does not entirely look at cost but on ensuring that the right services and materials are available to the organization when needed and in quantity required at the best possible value. The process involves making decisions based on facts obtained through market intelligence and analysis. This continuous process is collaborative and not reserved for the purchasing functions of the organization only. The process gears towards getting the best services or products at the best value.

Whether you‘re creating a local or international sourcing plan, it is vital that the created plan ensures: Delivery of the benefits identified in the strategy when required; and in a way, that meets the business need. Implementation of the changes is in accordance with a planned timeline that is realistic to ensure their success. Identification of risks associated with the processes and building of the appropriate corrective measures into the plan. A good plan will include: Realistic time frames with the consideration for high failure rates Proper planning and communication for the creation and implementation stages Identification of business processes that will be affected directly and indirectly Identification of key milestones and measurement of process results