The Oliver Wight Class A Standard for Business Excellence, 7th Edition

9Managing External Sourcing

Purpose

To support the Strategic Plan by sourcing and managing the incoming supply of goods and services to competitive advantage, ensuring Class A Supply Chain performance. To understand and manage the balance between risk and Total Cost of Ownership.

Positioning

The External Sourcing Roadmap is derived directly from the Supply Chain Roadmap. It establishes the required supplier base and relationships to enable a world-class Supply Chain response that delivers value to customers and consumers as part of an overall Value Chain. The roadmap drives the integration of processes to ensure Supply Chain Plans manage supplier responses. The processes involved are creations of externally sourced categories, supplier selection and collaboration, and Total Cost of Ownership. The roadmap will identify the required agility from suppliers, in support of supply chain performance and product development collaboration.

Process maturity improves over time through education, committed leadership, expert guidance, and a focused effort to attain key business milestones.

After embarking on the path to improvement, accountabilities are assigned, the elements and characteristics of the processes are implemented, and targeted measures drive improvement to enable process transformation.

Done well, a Class A Milestone is achieved at the top of Phase 1 of Business Maturity (see Foundation, Figure I.1). At this stage, formal make/buy processes are deployed, Supplier Capability ...