Table Of Contents
OVERVIEW 2
Catalyst 2
Summary 2
Methodology 2
EXECUTIVE SUMMARY 2
Sourcing strategy starts with a high-level review 2
Five key dimensions to consider 3
Outsourcing individual work packages 3
Realizing the full value 4
Table of Contents 4
Table of figures 4
INTRODUCTION 5
Delivering on the promised benefits of outsourcing 5
HIGH-LEVEL REVIEW OF SOURCING POTENTIAL 6
The need for a holistic and strategic approach to outsourcing 7
Identifying the potential candidates for outsourcing that will deliver the most value 8
Other factors to consider when selecting candidates for outsourcing 9
DEVELOPING YOUR OVERALL SOURCING STRATEGY 11
Clarifying and agreeing on objectives and constraints across all stakeholders 11
Key dimensions of an overall sourcing strategy 12
Scoping and packaging 13
Supplier partnering models 15
Global delivery model 15
Personnel and social considerations 17
Commercial model 17
DECIDING WHETHER TO OUTSOURCE INDIVIDUAL WORK PACKAGES 19
Quantify the likely benefits in advance 19
Taking proper account of the risks 20
Preparing a business case 22
Feasibility assessment through a high-level implementation plan 23
Synchronizing sourcing initiatives across the organization 24
Organizing work packages and suppliers to best effect 25
Preparing for implementation and supplier engagement 27
Monitoring benefits and risks 28
Defining the sourcing arrangements 29
Managing the process 29
PLANNING FOR FULL VALUE REALIZATION 30
Governance and supplier management framework 30
Retained organization and supplier management 32
Create a joint 'value realization framework' with your supplier 33
IN SUMMARY: KEY FACTORS FOR A SUCCESSFUL OUTSOURCING STRATEGY 35
Top 10 questions to consider when developing a sourcing strategy 35
Top 10 factors to consider when screening candidate areas for outsourcing 35
Top 10 tips for realizing the full potential value of your sourcing arrangements over time 36
CASE STUDIES 37
Best-of-breed sourcing strategy: major logistics and supply chain management organization 37
Sourcing strategy with global delivery: major global airline 38
APPENDIX 40
Orbys Consulting 40
Disclaimer 40
List of Figures
Figure 1: Sourcing strategy: the overall approach 7
Figure 2: Identifying the candidate processes 9
Figure 3: Review of candidate processes and assessment of potential benefits 10
Figure 4: Establish strategic sourcing options 13
Figure 5: Quantifying the expected benefits of outsourcing each candidate process 20
Figure 6: Quantifying the expected risks of outsourcing a candidate process 22
Figure 7: Decision by process 23
Figure 8: Taking a top-down approach to planning 25
Figure 9: Finding the optimum mapping of work packages onto suppliers 26
Figure 10: Developing detailed plans and deliverables for all the key activity streams 28
Figure 11: Sourcing management framework 31
Figure 12: Optimum retained organization 32
Figure 13: Orbys value realization approach 34