RFQ and sourcing contracts in auto, aerospace, semiconductor and FMCG industry

Abstract

The phenomenon of sourcing as a major component of supply chain started from the period of World War II. During this phase, the market demand was unlimited. Therefore, success of a company didn’t only depend on how much it could sell but also on the ability to obtain the supplies, raw materials, services from the suppliers so to keep the company operating successfully. Eventually, sourcing developed to be a key determinant of success of an organization and more attention was given into procedures of purchasing and the corresponding supply functions. As the 90s came to an end, the need to develop efficient supply functions was very apparent if the company wanted to compete in a global stage. Cost efficiency and speed to market became the most sought after indicators in the 90s. As the time progressed, companies have focused on achieving supply chain objectives that would solve more long term strategic sourcing goals. Procurement is considered to be a management of a wide range of processes that are associated with the organization’s intent to obtain the necessary goods and services to transform some inputs to outputs. Strategic sourcing is more of a renovation process, performed at a higher organizational level. Strategic sourcing takes the procurement process one step further, which includes examining the entire supply network and evaluate how it affects procurement and purchasing decisions. Here, more focus is given into the supply network, risk, uncertainty and value creation in the supply chain. It also deals with the overall responsiveness and resistance of the supply chain. Strategic sourcing involves- managing sourcing & procurement processes, strategic sourcing and delivering customer value, understanding buyer-supplier relationships, evaluating global procurement competitiveness, spend & financial analysis and developing a corresponding methodology for the entire process.