Linking the SCM support to strategic sourcingprocess at FedEx:Improving the purchasing process withrespect to effectiveness or efficiency requires strong sourcing tactics. FedExSupply Chain Management is aimed to leverage the process of souring for all theFedEx family of companies, to ease up the processes. Center-Led Sourcing Process:§ With FedEx re-organising and grouping its services, IT, Equipment,Aircraft and supply chain logistics under the Strategic source and supply group,has led to Center-Led initiative or Center Led Supply Chain management sourcingmodel. We believe that this model houses and focuses on centralizing sourcingstrategies. § This model facilitated in integration of Ariba Buyer – further expandingits use to other operating firms and to process requisitions within a supplychain. SCM team have an online catalog for contracts, on submission,the requisition is bounced against a purchase approval policy. If an individualdoes not receive the product or service, Ariba will develop e-mail remindersthat will eventually escalate to senior management if left unattended.
§ SCM team is believed to have a single POC forall the pricing, negotiations and other transactional elements. This lead to migrationtowards a centralized view of approach towards sourcing. These central led sourcingprocess are under constant scrutiny of stakeholders, legal, finances dept andare ultimately approved by FedEx corporate of sourcing council. Initially thesourcing group lead the initiatives for sourcing and a hand-off competency to asupply chain associate is made. This competency occurs in Integration Step of 6mentioned above.
The Supply chain associates who are to be category associatednow ensure the agreement of the supplier thereby responsible for implementationwithin the specifies marketplace. They also hold responsibility of completing scorecardwith the supplier. FXFD’ supply chain technology (Innovation) complements the central led souring enabling greatersavings (Cost), Data managementimprovements (Dependability, quality, speed). Central led process also helps in flexibility as SCM can change the business rules according to theC.E.O portraying a good level of control.
Supplier SCORE-CARD:§ The SCMteam is bound to determine the threshold limits for supplier metrics, The SCORE-CARDis mainly maintained to manage supplier relationship. The SCM associate managesperformance assessment and maintains a score ranging from 1-5, they are alsogiven the authority relating to weight percentages to different elements ofscorecard. The elements are based on the statement of work mentioned in contract.
If a supplier falls below 350 range the SCM team will have to re-evaluate theirsupply strategy, supplier management is completely dependent on SCM teams. § Each memberis assigned responsibility in managing one supplier relationship. SCM team hasa mixture of elements to deal with under strategic and tactical level thissometimes can be challenging on the SCM associates, because they must deal withboth strategic and tactical levels. SCM team is held responsible for businessprocess issues as well, they are required to maintain coordination between thesupplier and engineering group.