Supply Chain Management Process Standards, Second Edition

Supply Chain Process Performance Standards

		SUGGESTED MINIMUM PROCESS STANDARD	TYPICAL BEST-PRACTICE PROCESS
2.0 SOURCE
2.1 STRATEGIC SOURCING
2.1.1	Cost Analysis	• Quality and price are considered the key components of cost, but other variables, such as lead-time variability, assured source of supply, etc., are also considered • Analysis of price includes logistics costs, including inventory-carrying costs	• Analysis of total supply chain optimizes total cost of acquisition across all related processes • Full analysis of total cost impact of supplier in all cost reduction initiatives, including: unit cost, quantity breakpoints, lead time, and lead-time variability • Consideration of cost impact of supplier services, e.g., consignment, ...