TO 624 Strategic Sourcing: Getting Started

Global raw material shortages and price escalations since 2020 are reasons why all organizations need to have a commodity - category plan.

When purchasing high volume spend items or services, many best-in-class-companies develop category/commodity management plans which offer a short and long term strategy for controlling costs and mitigating risks.  

A plan will identify applicable suppliers and include a supply market analysis using industry frameworks such as Porter’s Five Forces.  It will examine an item/service’s cost structures, price drivers and supply and demand. It will also determine the risks that might impact an item/service’s cost, availability and quality and offer solutions for monitoring and managing them. 
 

This Guide and additional resources in CANVAS feature information resources required for developing such a plan:

• Information about how the product is made to help identify some of the price drivers
• Market research identifying suppliers and their capabilities and providing an overview of market dynamics
• Reference pricing 
• Supply and demand data
• Government regulations and industry standards and how they impact cost and availability
• News sources for risk identification
   

Difficult to locate Information on over fifteen raw materials is available by contacting the TO 624 librarian.
 

For further assignment guidance, refer to the Final Project's guidelines.   Contact the TO 624 Consulting Librarian for a research consultation to review available resources. 

Danguole "Dee" Kviklys (dkviklys@umich.edu)