Post on 06-Aug-2015
Sourcing StrategyArnon Kraft
Senior Director for Strategic Sourcing, Microsoft
arkraft@microsoft.com
arnon@arnonkraft.com
Background & Journey
Strategy
Essentials
Key Takeaways
Questions
Sourcing Strategy
AG
END
A
Background & Journey
Strategy
Essentials
Key Takeaways
Questions
Sourcing Strategy
AG
END
A
54321Marketing & Biz Devmsystems (2002-2006)
VP Ops & TechnologySanDisk (2006-2008)
54321
54321VP Operationsmodu mobile (2008-2010)
54321Ops & Mgmt Consultant(2011)
54321Sr. Director of SourcingMicrosoft (2012-Present)
Background & Journey
Strategy
Essentials
Key Takeaways
Questions
Sourcing Strategy
AG
END
A
strat·e·gy /ˈstrætɪdʒi/ Show Spelled [strat-i-jee]
1. Also, strategics. the science or art of combining and employing the
means of war in planning and directing large military movements and
operations.
2. the use or an instance of using this science or art.
3. skillful use of a stratagem: The salesperson's strategy was to seem
always to agree with the customer.
4. a plan, method, or series of maneuvers or stratagems for obtaining a
specific goal or result: a strategy for getting ahead in the world.
Strategy
Strategy
Purpose
Strategy – simplicity and clarity
”a profound quote about sourcing” *
Sourcing
Sourcing Strategy
Develop a World Class OrganizationHire, Develop & Retain
Aggressive Cost Management
Effectively Deliver Product / Services to Market
Cost• A total cost of ownership approach: should-cost,
cost of quality/inventory/flexibility, cost curves
• Leverage industry expertise and relationships: book of business, scale, technology trends
• Provide best solution at right value: industry expertise, influence design, market trends
• Manage both risks and opportunities
Supply• Design for supply
• Know your category - identifying market trends, understanding your agreements
• Proactive risk mitigation plans: buffer inventory, pre-buys, multi source, joint ventures, M&A
Scale• Long term thinking: fire drills vs. long term
technology trends
• How to build the org for long term success: people, processes, tools, culture
• One product line multiple product lines
• One location multiple sites
Quality & Compliance
• Tradeoff with design for cost?
• Consumer vs. Industrial vs. Military
• Over-engineering
• Supplier quality management approach
Background & Journey
Strategy
Essentials
Key Takeaways
Questions
Sourcing Strategy
AG
END
A
Flexibility• Adjust supply chain to meet changes and shifts
in the market
• Partners footprint
• Sole/Single/Dual/Multi Source
• Multi source tradeoffs
Agility• Build a supply base that will allow quick
response times to short-term changes in demand or supply
• Flow of information to suppliers
• Buffer inventory strategy
• Contingency plans
Alignment• Sourcing org considerations: structure & location
• Align interests, create incentives
• Know your limitations
• Share risks, costs, gains
• Potential to scale
• Culture, costing, inventory, MOQ’s etc
Partnerships• Internal: not us vs. them, care about their problems
more than they do.
• Strategy or Rules, Restrictions and Control?
• Escalations: who’s credibility is it building?
• External: your reputation in the industry
• Fair game
Background & Journey
Strategy
Essentials
Key Takeaways
Questions
Sourcing Strategy
AG
END
A
1. Prepare for negotiations. 80% of work is internal. Know your should cost.
3. Build partnerships. Reach out, contribute to the success of others, build your credibility.
2. Own your space. Know industry trends and dynamic better than anyone.
Call To Action
Extra CreditGetting to YesRoger Fisher and William UryKnow what to expect
Social PhysicsAlex PentlandHow to leverage ideas of others
www.chinasolved.comChinese Negotiation Strategies Balance of powers
www.steveblank.comHow to engage others – partner development
www.scmblog.comSome interesting reviews and analysis
OutliersMalcolm GladwellBeing relentless, power of dedication
Background & Journey
Strategy
Essentials
Key Takeaways
Questions
Sourcing Strategy
AG
END
A
arkraft@microsoft.com
arnon@arnonkraft.com
www.linkedin.com/pub/arnon-kraft
www.facebook.com/arnon.kraft
www.slideshare.net/ArnonK
Sourcing Strategy – Q&AArnon Kraft
Senior Director for Strategic SourcingMicrosoft