OPM 692: Strategic Sourcing
Contents
Looking back over the past twenty years, competitive purchasing approaches created significant value for firms by driving substantial cost savings to the bottom line. However, the widespread usage of professional procurement techniques has eroded the advantages that they had for pioneers in the 1990s and in the early years of the current century. In addition, environmental, competitive, geopolitical, and technological changes have created an uncertain business environment in which a mere focus on purchasing cost will not be sufficient to support sustainable competitive advantage. Against this backdrop, this module covers advanced approaches in procurement that aim at creating “value beyond cost”. Based on an end-to-end analysis of the key procurement processes, the module addresses the following core topics: Demand and supply analysis (need identification and specification management, supply market analysis, RFx, cost
modeling, optimization levers), sourcing decisions and awarding of business (analytical models for supplier selection, negotiations, and auctions), formal relationship governance (contracts and price models), operational purchasing (purchase-to-pay process), management of nonperformance and conflicts, and technological enablers.
Learning outcomes
This course is of interest to students seeking more in-depth knowledge of the processes and tools in modern procurement. For each topic covered, concepts, frameworks, and analytic tools are presented. Participants will learn:
- how to organize healthy competition to find the right suppliers for a specified demand,
- how to pull commercial, technical, and processual levers of optimization,
- how select the most effective award business mechanism and contract based, and
- how to deal with performance exceptions and supplier conflicts.
Necessary prerequisites
–
Recommended prerequisites
The module builds on topics covered in OPM 591. Participants who have not attended this module might require additional preparation.
| Forms of teaching and learning | Contact hours | Independent study time |
|---|---|---|
| Lecture | 2 SWS | 9 SWS |
| Exercise class | 1 SWS | 5 SWS |
| ECTS credits | 6 |
| Graded | yes |
| Workload | 180h |
| Language | English |
| Form of assessment | Written exam (90 min, 90%), case challenge (10%) |
| Restricted admission | no |
| Further information | – |
Examiner Performing lecturer |  | Prof. Dr. Christoph Bode Prof. Dr. Christoph Bode |
| Frequency of offering | Spring semester |
| Duration of module | 1 semester |
| Range of application | M.Sc. MMM, M.Sc. Bus. Edu., M.Sc. Econ., M.Sc. Bus. Inf., M.Sc. Bus. Math., MAKUWI |
| Preliminary course work | – |
| Program-specific Competency Goals | CG 1 |
| Literature | There is no mandatory textbook. All relevant course materials will be provided. Auxiliary readings:
|
| Course outline | Module 1: Demand analysis (need identification; specification management; cost modeling; technical levers for optimization; value engineering) Module 2: Supply analysis (supply market analysis; global sourcing; RFx) Module 3a: Sourcing decision – Decision support methods (linear programming; scoring methods; analytic hierarchy process; pareto optimization) Module 3b: Sourcing decision – Auctions (auction theory; reverse auctions) Module 3c: Sourcing decision – Negotiation (fundamentals; distributive bargaining; integrative bargaining) Module 3d: Sourcing decision – Contracting (legal background; contract types; SLAs) Module 4: Operational purchasing (P2P process; expediting; performance exceptions and conflicts) |