Strategic Global Sourcing Best Practices

FRED SOLLISH, MS, is the Managing Director of eParagon, LLC, a consulting firm specializing in providing training and working tools for the supply management profession. Fred is former president and CEO of the Institute for Supply Management (ISM) Silicon Valley affiliate and is a longtime member of its Board of Directors. He is also an instructor for sourcing, supply management, and purchasing related courses. His online strategic sourcing program can be found at supplyknowledge.coggno.com. JOHN SEMANIK, MBA, is cofounder and Director of eParagon, LLC. He has served in senior corporate supply chain management positions at such leading-edge companies as Hewlett-Packard Company, Sun Microsystems (acquired by Oracle), and Xilinx, Inc. John was founder, managing director, and instructor for San Jose State University's Professional Development curriculum in supply chain management and purchasing. He serves on the Board of Directors of the Institute for Supply Management (ISM) Silicon Valley affiliate.

• Preface ixCHAPTER 1 An Overview of Global Strategic Sourcing 1The Strategic Sourcing Plan 2Operational Sourcing Strategy 10Summary 17CHAPTER 2 Operational Alignment with Sourcing Strategy 21Understanding Requirements 21Opportunity Analysis 28Category Segmentation 35Summary 37CHAPTER 3 Source to Settle (S2S) 39Why Source to Settle? 39Implementing an S2S Process 47Managing the S2S Process 53Outsourcing the S2S Process 54Summary 54CHAPTER 4 Cultural Considerations for Global Sourcing 57Conducting Business in Other Nations 58Cultural Values 58Sourcing Challenges 66Summary 70CHAPTER 5 Supplier Research and Market Analysis 71Conducting Supplier Research 71Conducting Market Analysis 81Summary 85CHAPTER 6 Solicitation of Bids and Proposals 87Solicitation Planning 87Solicitation Methods 96Summary 99CHAPTER 7 Supplier Evaluation and Selection 101Evaluation Criteria 101Summary 123CHAPTER 8 Negotiation Revisited 125The Nature of Negotiation 125Negotiation Strategy 126Negotiation Planning 129Developing a Negotiation Plan 130Exception Conditions 135Summary 138CHAPTER 9 Supplier Diversity 139Diversity Programs 139The Business Case for Diversity 142Supplier Diversity Best Practices 144Global Supplier Diversity 147Diversity Advocacy Organizations 148Summary 151CHAPTER 10 Sustainability 153Issues in Sustainability 154Guidelines 163Criteria for Supplier Evaluation 167Summary 169CHAPTER 11 Risk 171The Nature of Risk 171Why Is Understanding Risk Important? 172Risk Management Principles 172Summary 181CHAPTER 12 Global Sourcing 183Developing a Global Sourcing Strategy 184International Trade Requirements 188Summary 195Glossary 197Suggested Reading 207About the Authors 215Index 217