Strategic Supply and Sourcing at FedEx Introduction Based in Memphis, Tennessee, and founded in 1971, FedEx Corporation is a multinational company that provides import, export, shipping and delivery services across the world. It is a market-leader in the transportation and logistics industries, and is estimated to be worth $20 billion. FedEx is divided into six companies, each of which has an efficient supply chain management strategy. This paper examines the corporation’s strategic sourcing process and how it contributes to the effectiveness of its supply chain. It also examines the role that the governance structure plays in creating its strategic sourcing effectiveness.
Buy this excellently written paper or order a fresh one from acemyhomework.com
1.
The strategic sourcing process is divided into seven steps. The first step is an
examination of the category where the industry and commodity fits. The second step is making a choice of the most appropriate sourcing strategy to use. The third step is to perform a thorough research of the suppliers to use in an area. The fourth step is to develop a strategy that will be used for negotiation during purchasing. The fifth step is the actual selection of the supplier and negotiation strategy. The sixth step is integrating the supplier to the Ariba toolset, while the last step is to analyze the effectiveness of the supplier through the company’s supplier scorecard system. At every stage of this process, there is research on the best decision to make, and an analysis of the success of the process in order to make rectifications where necessary. 2.
FedEx’ governance structure has supported the strategic sourcing process by
reorganizing the company’s different businesses under a supply chain model that caters to the needs of each of the businesses. This has created a centralized procurement approach, which not only reduces costs but also enhances the overall effectiveness of the company’s operations. The governance structure has also implemented e-procurement tools which make it easy for buyers to purchase goods at a time and place of their convenience and also allows authorizations to be made faster and more easily. The Ariba system creates reminders incase an order is not delivered, therefore ensuring that the company effectively satisfies its clients needs. Therefore, the governance structure supports the strategic sourcing process by implementing systems, structures and controls that monitor the efficiency and facilitate the smooth running of the procurement process.
3.
Several aspects of the FedEx sourcing process are applicable to other
companies. To become more competitive and take advantage of the economies of scale, several companies across the world use a central purchasing unit to handle all their procurement. Like Fedex, several companies understand the importance of an effective supply chain and have therefore developed systems and structures that facilitate the smooth flow of the strategic sourcing process. In FedEx and other organizations, major purchasing decisions as well as the authorization and approval processes are carried out by the individuals in authority within the organization. Companies across the world also select their suppliers through a fair bidding process in which the supplier who offers the best quality of products at the best terms is awarded the contract. Like FedEx, the performance of suppliers is monitored continuously to ensure that it meets the required standard, in order to ensure that customers receive value for their money. Across the world, several companies have automated their supply chain process, like FedEx, to make it more efficient and effective
Reference Cao, R., Gu, V., & Schniederjans, D. (2018). Topics in Lean Supply Chain Management (Second Edition). Singapore: World Scientific Publishing Co Pte Ltd. Watson, M., Lewis, S., Cacioppi, P., & Jayaraman, J. (2014). Supply chain network design. Upper Saddle River, New Jersey: Pearson Education. Millar, M. (2015). Global supply chain ecosystems. London: Kogan Page.