Supply chains include direct and indirect products and services. These inputs flow through tiers. In a manufacturing supply chain, they come together at an original equipment manufacturer, and then they are sold to wholesalers, then retailers, then end customers. Strategic sourcing involves balancing all of the supply chain goals.
- Before you'll have a product or service…to sell to your customers,…you generally need to buy things from your suppliers.…We sometimes call that procurement or purchasing.…But in the SCOR Model,…it's part of the source process.…Let's look at how source fits in…to the rest of your supply chain.…The things you buy can be categorized…as direct purchases and indirect purchases.…It's important to understand the difference…because many companies…divide these purchasing responsibilities…between separate teams…and they often use different processes.…
Anything you buy that becomes…a part of the products you make is a direct purchase.…The other things you buy that don't go into your products…those are indirect purchases.…So if you run an automotive factory,…the metal you buy to build cars is a direct spend…and the janitorial services to keep the building clean…are an indirect spend.…Whether we're talking about direct or indirect costs,…one of the goals for every purchasing department…is reducing the amount of money they spend…
- Explore the fundamentals of source inputs within a supply chain.
- Examine the role of returning products in a supply chain.
- Determine how to calculate total costs.
- Explore the role of investing in flexibility when managing a supply chain.
- Discover how to increase visibility with a control tower.
- Identify the role innovation plays in supply chain management.
- Examine how artificial intelligence and machine learning help to monitor supply chain trends.
- Break down the fundamentals of selecting the right technology when implementing a supply chain agenda.
- Determine the best ways to collaborate externally when implementing a supply chain agenda.