Answer to Question #263356 in Management for Athi

Question

discuss eight steps that Electrolux can follow to implement an improved sourcing strategy. In your response, ensure that appropriate literature with in-text referencing is used.

Answer 1

Strategic sourcing refers to the process of identifying the spend profile of an organization and its supplier base to ensure their business requirements are aligned with the suppliers. The boom in the adoption of strategic sourcing implies that almost everyone has heard of it. The following are some of the steps that Electrolux can follow to implement an improved sourcing strategy. (Su, J. (2013). Strategic sourcing in the textile and apparel industry. Industrial management & data systems.)

The first step is to identify spend areas as identifying spend areas is a key step in improving the strategic sourcing process.  The second step is to perform Supply Market Analysis. It is good to find relevant suppliers and identify the ones that can be beneficial for your organization. The process involves supplier market analysis, demand analysis, supplier selections, and category risk analysis. Thirdly, analyze your current sourcing process. This will help Electrolux to engage with stakeholders to gain detailed insights regarding products used by suppliers.

The forth step to be followed is to develop a strategic sourcing strategy. This will help you to identify and establish timelines and milestones as a road map to accomplishing the objectives. The fifth step is supplier selection process. It is good for Electrolux to Define their requirements, and detailed questions to obtain a comprehensive overview of the product, processes continuous improvement policies, and costs. This will help Electrolux to benchmark scores against its requirements, determine the minimum score required by the supplier to qualify, and improve the strategic sourcing process.

The sixth step is to initiate request for quotation (RFQ) Process. This will add an element of competition and help you get the best value in terms of cost savings. The last step is to maintain supplier relationships. Establishing an effective supplier relationship management program will enable them to realize savings and improvements that were targeted during the early strategic sourcing process.

 

Reference

Su, J. (2013). Strategic sourcing in the textile and apparel industry. Industrial management & data systems.