Balanced Sourcing: Cooperation and Competition in Supplier Relationships

Every year, the typical manufacturing company spends 50 to 75 percent of its revenues on outside goods and services. And a dramatic increase in the outsourcing of non–core activities has heightened management′s concern with purchasing in the non–manufacturing sector as well. As a result, effective buying has become one of the most challenging strategic issues of the day. In this book, Tim Laseter of the world–renowned consulting firm Booz–Allen & Hamilton shows companies how to address that challenge through the dynamic pursuit of balanced sourcing.

Laseter and Booz–Allen coined the term balanced sourcing to describe a model for ensuring competitive pricing from suppliers while simultaneously nurturing cooperative relationships. Drawing upon Booz–Allen′s experiences with leading companies, Balanced Sourcing lays out the six organizational capabilities that make up the firm′s field–tested strategy. Separate chapters highlight key principles for developing each capability and delivering near–term results. Detailed case studies of four prominent corporations–Honda of America, Cisco Systems, SUPERVALU, and Florida Power & Light–demonstrate the broad applicability of the model for companies in industries from manufacturing to services to high–tech.

Balanced Sourcing offers real–life lessons from around the world in such key areas as creating sourcing strategies, building and sustaining supplier relationships, and leveraging supplier innovation. Though written for senior executives who want to drive transformation in their organizations, Balanced Sourcing also provides practical advice to purchasing executives who want to understand their role in implementing the best practices of their profession.

Foreword

Preface

Part One: A New Model for Purchasing

1. The Emergence of Balanced Sourcing

2. Transforming the Organization

Part Two: Building the Capabilities

3. Modeling Total Cost

4. Creating Sourcing Strategies

5. Building Sustainable Relationships

6. Integrating the Supply Web

7. Leveraging Supplier Innovation

8. Evolving a Global Supply Base

Part Three: Balanced Sourcing Case Studies

9. Florida Power and Light Company

10. SUPERVALU

11. Honda of America

12. Cisco Systems

Notes

The Author

Index

Booz–Allen and Hamilton

TIMOTHY M. LASETER is a vice president at Booz∗∗Allen & Hamilton and founder of the firm′s global network of sourcing practitioners. He has helped a wide range of companies build the organizational capabilities for balanced sourcing and is a regular columnist for Purchasing magazine.