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Strategic Sourcing and Category Management: Lessons Learned at IKEA
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Widely admired for its purchasing strategies, Ikea revolutionized the thinking and execution of procurement departments across the world. By means of case studies, interviews, practical examples, and comparisons with other leading companies, Strategic Sourcing and Category Management examines the guiding principles behind category-based sourcing, the practicalities of implementing it, and how businesses can realize its benefits.
The book answers four critical questions:--When is category management a profitable method and why?--How do category teams create real results?--How can category management be organized and implemented effectively?--What makes the difference between success and failure?
Connecting theory and practice, this book is an invaluable resource for procurement and purchasing professionals in any industry.
Product details
Paperback: 248 pages
Publisher: Kogan Page (August 28, 2015)
Language: English
ISBN-10: 0749473975
ISBN-13: 978-0749473976
Product Dimensions:
6.1 x 0.5 x 9.2 inches
Shipping Weight: 11.4 ounces (View shipping rates and policies)
Average Customer Review:
4.8 out of 5 stars
7 customer reviews
Amazon Best Sellers Rank:
#458,024 in Books (See Top 100 in Books)
I am a purchaser. I have read the book two times and implemented some of the methods already into my business area. The best things with the book : 1) it is easy to read 2) easy to implement to any kind of sourcing & purchasing project no matter how complex or simple the project is 3) it always aims the achieve best possible results . The methodology described in the book is dynamic not static so it is amendable, can be updated by purchasers as well. I really suggest this book to any kind of purchaser (junior or very senior) or any related party doing business with purchasing.
A great, highly relevant and hands on book on the topic of sourcing and procurement category management!
Many books promise to show how to create value in a supply chain, yet they mostly feel to be lacking when push comes to shove. This book is different; it has a focussed look at reality, with actual experiences from IKEA. If there’s one company that seems to have optimised its supply chain very well, it is IKEA. Learn how to get a grip on your strategic sourcing and category management, amongst many other things.The book looks at ways of improving the entire procurement process and creating a mutually beneficial environment for both purchaser and supplier alike. Of course, the purchaser will always want a bit better deal, yet there are ways in improving efficiencies and structures that offer benefit to both parties. It is a lot more than just cutting waste.The author manages to cram a lot into a relatively small book, the contents of which are engaging, informative and incredibly more-ish. Whilst the book is aimed at the larger organisation, something that might be quite established and mature (with all the problems that can come with it), there is no reason why much of this book’s knowledge cannot be utilised or transformed into the operations of a smaller company. Not everything may be relevant, at the moment, yet there are still sufficient takeaway points to provide value.It is a demanding book due to the sheer quantity of information on offer, sharing the knowledge of an industry professional that has been at the sharp end with a clear global leader who has transformed its own operations over time. It is a highly worthwhile read.This is a book for those who should be doing things, although the academic need not be left out in the cold: there is an extensive range of notes and bibliographic references for deeper, additional reading. Although the reader may be kept fairly engaged and active consuming and contemplating the advice dispensed within the book as it is!
Strategic Sourcing and Category Management: Lessons Learned at IKEA by Magnus Carlsson (KoganPage, August 2015) is not a case study, although I didn’t need the note from the author in the introduction to know that. The author may have spent 25 years at IKEA, working in strategic sourcing, but this is less a story of one company and more the learnings gained by one professional over 2.5 decades in a competitive environment.Like any other book I review or event I attend, my focus in reading this book was to cull out the important ideas: what are the few take aways that really stand out as unique? There are quite a few in this book, any of which will improve the maturity and results of your procurement organization. I think this book is fantastic – full of great new ideas and ways to implement them.Category ManagementThe first question that might come to mind is ‘how does the author suggest we segment our spend or supply base to get the best results from category management?’ He advocates segmentation by manufacturing process – and yet he introduces the idea that the processes he is accustomed to are different than the ones most commonly seen. The steps in any process must be allowed to influence each other – not just downstream, but back and forth. This philosophy brings the entire process to life and pushes those managing it to emphasize agility and flexibility.Several of the take-aways I detail below provide examples of where learning something or changing a requirement must be allowed to affect the trajectory of the project no matter how far through the process it is. That being said, Carlsson does not suggest that processes should be ‘loose’. In fact, he explains that the difference is in the details – the difference between mostly getting a process right and actually getting it right may be small in percentage of the total effort, but will be significant as a percentage of the results.Influence v. PowerThis is big – first of all, knowing the difference between the two and second of all being able to build and wield both.Influence is like BATNA outside of a negotiation. You strengthen it by increasing your options. If a company (or individual) can create and define a reason for suppliers to give them something others can’t access, they have influence. Another way of looking at it is increasing control over one’s environment. It is important to note that volume of demand does not automatically create influence. This provides someone with the option to improve results without violating the popular collaboration paradigm.While Influence incentivizes desired behavior by offering something of value in return, power makes it happen through leverage. There is more force to a power-based approach.Market DiagnosisAnother critical idea. As Carlsson says, “locate the money.†Market diagnosis should be conducted early enough in a project that the findings can be allowed to shape the resulting sourcing efforts. Always look at the difference between what high margin/cost suppliers provide and what lower cost suppliers provide. High price suppliers have found a way to deliver value added services, and low cost suppliers have found a way to be efficient. The right answer is likely somewhere between the two, and there is something important to be learned from both.If there aren’t enough viable alternatives in your project, re-engineer the offering to make them viable. Maybe your requirements are more the issue than what is available in the market. Understand the role that different cost types (fixed/variable/unit-based/overhead) as well as material vs. process costs have on the value created for your consumers. Start with cost calculations and then move to a value analysis which combines costs and consumer benefits.
I am a Global Sourcing Manager, I really appreciated the pragmatical approach of Sourcing process in Magnus Carlsson's book.This is definitely more than just another book on purchase or sourcing process, it is a toolbox that will help me in my job, to move my scope of responsabilities, to organize my priorities and to set up another strategy on my sourcing activities.This book's phylosophy opened me new ways of thinking.I recommend it to all buyers, from small to big companies if you want to developp your thinking and for sure to improve the competitiveness of your company.
A must have for all sourcing managers!I am a sourcing manager and taken many trainings on purchasing from different companies. This book made me better understand and clarify all the theories and case studies I had been taught over years. It's a practical teaching guide that provides you all required literature review and with easy to understand cases. I was lucky to read the book just before a very important top management presentation. It helped me to make an impressive introduction and take everyone's attention in the room.
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