Question 2 (20 marks)

Using a category of expenditure from your organisation or any organisation that you are familiar with, create a sourcing plan that can be presented to the stakeholders in your organisation.

In below format using Toyota as an example::

TABLE 6.1 Typical source plan sections, content and sources Source plan heading Sources and insights that inform this section Executive summary What this should contain Once the rest of the document has been prepared, the executive summary should be the last thing to be written. Ideally it will summarize the entire document and the recommended sourcing strategy in just one or two well-crafted pages. Building chosen option Cost-benefit analysis Summary of other outputs as required Background Background to the category management project. Here the source plan should introduce the reader to the project including scope, team members, stakeholders, project timeline and a summary of the process followed. Opportunity analysis Team charter Project timeline Stakeholder map Communications plan Current situation This section is not only about describing what is happening currently but also areas that are suboptimal. The section must be based on fact, not opinion, and must also clearly show the problem or problems that the source plan is attempting to address. This section could include: internal/category - total volumes, spend, how it is used, who buys, how it is being bought and issues identified; suppliers - who they are, what they do, where they are, where they are headed, our spend with them, how they see us, what problems we have had historically, what alternatives exist and issues identified; market - the nature of the marketplace, market size, what alternative markets there are, what is happening in the market, eg is it expanding or contracting, are there new entrants or factors that will change the market dynamics in the future? Definition of the agreed business requirements in terms of needs and wants, and current and future requirements. Details of value levers that have been considered. STP Category data summary Supplier data summary Market data summary Technology road map Day one analysis Cost and price breakdown Supply value chain network analysis Business requirements Business requirements Value levers Strategic analysis and insight Porter's five forces Analysis of pricing approaches Portfolio analysis Supplier preferencing SWOT A section that builds on all the factors identified within the current position, as well as the business requirements, to provide analysis and insight into the position we are in and what needs to change to realize benefits and move forward. This section should draw on each of the insights gained from the strategic analysis tools (eg portfolio analysis, supplier preferencing, Porter's five forces and many others), but crucially must knit all the individual insights together to provide a single overall insight that forms the basis for identifying strategic sourcing options. The shortlist of strategic sourcing options that were identified in direct response to the strategic analysis and insight, together with the evaluation details and evaluation methodology used. The recommendations in terms of the chosen strategic sourcing option and sufficient supporting detail to adequately describe what the recommendations are. Options for change Options generation Options evaluation Recommended sourcing option Options evaluation Building chosen option High-level implementation planning Risk and contingency planning Risk and contingency planning Summary of the risks identified with implementing this option, plus potential mitigating and contingency actions that need to be provided for. High-level Implementation plan High-level implementation plan Quick wins Cost-benefit analysis A simple high-level plan that describes the headline activities and timing required to execute the recommended strategic sourcing option. This is also a good place to include quick wins. The indicative cost and resource requirements to execute the strategic sourcing option and the resultant anticipated benefits and their timing. Immediate next steps and action required from the stakeholder or sponsors. Cost-benefit analysis Next steps High-level implementation plan All tools and outputs Appendices All the supporting detail including data gathered and the outputs from each of the key tools worked through the process. It may be appropriate to make the appendix section a separate supporting document. It is important that the appendices are comprehensive, as this serves as the catalogue for future reference