OPM 591 (OPM 5910): Supply Management

Contents
Few corporate functions have changed as profoundly over the past two decades as procurement. Driven by globalization, digital trans­formation, geopolitical volatility, and rising sustainability expectations, purchased goods and services today account for roughly 40 to 60 percent of a typical firm's revenue, and the supply base is increasingly the primary source of innovation, resilience, and competitive differentiation. Procurement has therefore moved out of the back office and into the boardroom: chief procurement officers now report to the executive committee, and their decisions directly shape a firm's cost position, risk exposure, and ability to grow.
This module provides a rigorous, theory-grounded survey of modern procurement from a strategic perspective. Starting from the evolution of organizational buying and its measurable impact on firm performance, participants learn how to align procurement strategy with corporate and competitive strategy, how to structure make-or-buy decisions, and how to design the target operating model of a procurement function. A dedicated block introduces category management with tools such as the spend cube, Porter's five forces applied to supply markets, and the Kraljic purchasing portfolio. A final block addresses strategic supplier management, from buyer-supplier relations­hip governance to supplier evaluation, development, and integration. Lectures are complemented by case discussions, structured exercises, and guest lectures by senior procurement executives.

Learning outcomes
Modern procurement is an analytically demanding and strategically influential field. This module equips participants with the conceptual vocabulary, theoretical frameworks, and structured tools required to reason about strategic procurement problems at the level expected in competitive graduate recruiting (e.g., management consulting, supply chain leader­ship programs, entrepreneur­ship in procuretech). On successful completion, participants will be able to:

• Situate procurement strategically and align it with corporate strategy: derive procurement priorities from a firm's competitive strategy using the competitive priorities framework, and reason about make-or-buy decisions with trans­action cost economics and the resource-based view.
• Design a target operating model: evaluate alternative organizational structures, governance mechanisms, core processes, performance measurement systems, and capability architectures for the procurement function.
• Develop category strategies: apply spend analysis, supply market analysis, and the Kraljic purchasing portfolio to segment a firm's spend and to derive differentiated category strategies with commercial, technical, and demand-side levers.
• Manage suppliers strategically: distinguish arm's length from relational exchanges, segment the supply base, and design buyer-supplier relations­hips that balance value creation, value sharing, and risk.
• Critically appraise contemporary challenges: reflect on how sustainability, geopolitical risk, digital trans­formation, and resilience reshape procurement decisions, and judge the limits of the frameworks taught.
• Communicate and defend procurement decisions in written form and in case-based class discussions.

Necessary prerequisites
–

Recommended prerequisites
Basic knowledge in supply chain and/or operations management

Examiner Performing lecturer

Prof. Dr. Christoph Bode Prof. Dr. Christoph Bode