MONASH

BUSINESS
SCHOOL

Delivering Projects

Dr Sajad Fayezi
Monash Business School
Activity 1a: Opening

▪ Agenda
12:30pm-
A5
Break Lunch 1:30pm
Seminar:
A6
Step 3 Assess supply market; data collection 1:30pm-3pm
A7 Breakout Meeting of category teams 3pm-4pm
A8 Break Afternoon tea 4pm-4:15pm
Seminar: 4:15pm-
A9
Step 3 Assess supply market; data representation 5:30pm
A10 Closing Consolidate and reminders (both module and workshop) 5:30pm-6pm

Assignment
A11
artefacts Students to draft AT3 artefacts; Students to work on DAs 6pm-9pm

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Activity 1b: Objectives of Day 3 Workshop

▪ Moving from internal customer research to external market intelligence

▪ Reemphasizing the importance of data collection for Steps 2 and 3
▪ Plan for successful completion of Assessment 3

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Activity 1c: Muddiest point

▪ Individual: What concepts did you learn from Day 3 module?

▪ Individual: Which one of these concepts did you find most difficult to
understand?

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Activity 2a: Step 3 – [15 min]

▪ Step 3: Assess supply market

– Goal: Understand the supplier market
– Input and Tools: Interviews, Online research, Conferences, Porter’s Five Forces/SWOT
analysis, Supplier analysis
– Deliverables: Report on supply trends/changes/pricing/capacity (using either Porter’s Five
Forces or SWOT analysis), Supplier listing, Supplier analysis (including RFI)

▪ Data collection
– Market
▪ Porter’s five forces model
– Suppliers
▪ RFI
▪ Establish benchmarks through industry databases
▪ Value chain analysis
▪ Supplier research

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Activity 2a: Conduct Market Intelligence Research on Suppliers

▪ Information required
– Total annual purchase volumes
– Interviews with stakeholders for forecasts
– External market research on …

Key
Available capacity Technology trends
suppliers
Price data Cost data Technical
and trends and trends requirements
Environmental
Regulatory issues Other available data
issues

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Activity 2a: Conduct Market Intelligence Research on Suppliers

▪ Triangulation – explore, compare, and contrast data from multiple sources

Trade Annual
Internet Books
journals reports
Snowball Trade Category
Headlines
sampling consultants managers
Investment Analyst Other
Suppliers
reports Interviews sources

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Activity 2b: Porter’s Five Forces Model – [15 min]

Threat of New
Entrants

Supplier Buyer
Market Internal
Bargaining Bargaining
Competition
Power Power

Other possible forces:

Source:
Competitive Strategy
Pressure from • Globalization
Michael E. Porter (1980)
Substitutes • Digitization
• Deregulation
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Market Internal Competition

▪ Speed of industry growth

▪ Capacity utilization
▪ Exit barriers
▪ Product differences
▪ Switching costs
▪ Diversity of competitors

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Threat of New Entrants

▪ Capital markets
▪ Availability of skilled workers
▪ Access to critical technologies, inputs, or distribution
▪ Product life cycles
▪ Brand equity and customer loyalty
▪ Government deregulation
▪ Risk of switching
▪ Economies of scale

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Pressure from Substitutes

▪ Relative performance of substitutes

▪ Relative price of substitutes
▪ Switching costs
▪ Buyer propensity to substitute

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Buyer Bargaining Power

▪ Buyer concentration
▪ Buyer volume
▪ Buyer switching costs
▪ Price sensitivity
▪ Product differences
▪ Brand identity
▪ Impact on quality or performance
▪ Buyer profits
▪ Availability of substitutes

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Supplier Bargaining Power

▪ Price of major inputs

▪ Ability to pass on price increases
▪ Availability of key technologies or other resources
▪ Threat of forward or backward integration
▪ Industry capacity utilization
▪ Supplier concentration
▪ Importance of volume to supplier

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Activity 2c: Porter’s five forces role play - [60 min]

▪ Five groups – Chocolate Industry

– Competitors (most salient competitors)
– Suppliers (most critical suppliers)
– Buyers (distributor, retailer, end consumer)
– Substitutes (e.g. corn syrup/cane-sugar based candies containing little or no chocolate)
– New entrants (considering startup in this industry)

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Activity 2c

▪ I will exert some of the toughest environmental shifts a fledgling company

could experience and present them to you, simultaneously, to develop a
response.
▪ Each group must develop a response to the environmental shift at the same
time as the others
▪ Then all groups are called together after five minutes or after conversation
dwindles and answers are ready. “Wait and see” can be considered a valid
response, but cannot be repeated by the same group more than once.

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▪ Environmental shifts
– a crop blight on the world cocoa market, causing supply to dip 40%,
– multinational arrest of cocoa cartel operatives that frees up supply
– the bankruptcy and folding of one of the largest chocolate manufacturers
– the publication of a study showing that chocolate is causing autism in children who also
take allergy medicine

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Activity 3

▪ Category teams meeting (3-4pm)

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 MONASH
BUSINESS
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Activity 4: Afternoon tea break – [15 min]

Activity 5: Review

▪ Step 1: Project kick-off

– Goal: Develop a scope of work and plan
– Input and Tools: Category team leader, Other team members, Stakeholder analysis
framework
– Deliverables: Project kick-off meeting agenda/minutes (ongoing for subsequent
meetings), Stakeholder needs/change-readiness/commitment, Project charter,
Communication plan, Issue Log

▪ Companies are increasingly using a team approach to sourcing decision making by

bringing together personnel, from multiple functions, who are familiar with the product
to be purchased. Part of the first phase of the category management process is to
identify the people who should be involved, as well as the key subject matter experts
who may be part of the extended team. Once developed, the team should then
define scope of category strategy, publish project charter and develop
communication plan.

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Review

▪ Step 2: Profile spend

– Goal: Understand customer requirements
– Input and Tools: Interview with stakeholders (identify demand drivers), Analyze
customer requirements, issues and risks
– Deliverables: Requirements review (using requirements analysis process),
make/buy assessment, risk assessment

▪ The category team needs to develop a baseline understanding of what

products and services are being procured, what purpose they serve, and
refine understanding of the sourcing needs. They will also develop a total cost
model and undertake make or buy assessment. In essence, this steps
focuses on demand analysis (of internal customers) via profiling spend for
subsequent use in other steps.

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Review

▪ Step 3: Assess supply market

– Goal: Understand the supplier market
– Input and Tools: Interviews, Online research, Conferences, Porter’s Five Forces, SWOT analysis,
Supplier analysis
– Deliverables: Report on supply trends/changes/pricing/capacity (using either Porter’s Five Forces
or SWOT analysis), Supplier listing, Supplier analysis (including RFI)

▪ After understanding the spend patterns, the category team should also educate themselves
as to what is happening in the marketplace, as well as what their internal customer
requirements are. Just as you would perform research before buying a car (e.g., going online,
reading reviews of vehicles, looking into gas mileage, and looking at repair history reports in
Consumer Reports), teams perform the same type of market research on the supply base.
This is critical in building and understanding the key suppliers, their capabilities, and their
capacity to perform and meet the stakeholders’ requirements.
▪ This is a very critical step in the strategic sourcing process, as it involves making sure that all
potential sources of supply are identified and that useful mechanisms are in place for
meaningful comparisons of alternative supply sources.

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Study gap

▪ Step 4: Develop sourcing strategy

– Goal: Classify suppliers and define sourcing approach
– Input and Tools: Portfolio analysis, Supplier evaluation
– Deliverables: Sourcing strategy report, Supplier evaluation report (including RFP)

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Next block

▪ Step 5: Execute sourcing strategy

– Goal: Negotiate a win-win contract
– Input and Tools: Competitive bidding, Negotiation framework, Negotiation planning,
Negotiation tactics
– Deliverables: Supplier selection method report (including bidding, RFQ and/or
negotiation strategy), Supplier letter of agreement

▪ After the sourcing strategy has been determined and suppliers have been
recommended, it is time to implement the strategy and negotiate the contract.
Effective implementation of the strategy includes establishing tasks and time lines,
assigning accountabilities and process ownership, and ensuring adequate resources
are made available to the process owners. The strategy should also be
communicated to all stakeholders, including suppliers and internal customers, to
obtain buy-in and participation.

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Next block

▪ Step 6: Transition and integrate

– Goal: Finalize contractual agreement
– Input and Tools: Contract management, Dispute resolution
– Deliverables: Contracts justification report, Supplier contracts

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Activity 5b

▪ Review DA 3.3 (RFI)

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Activity 6: Closing

▪ Closing remarks
▪ Reflections (survey)
▪ Reminders
– Complete DAs
– Work on deliverables
– Complete Study Gap module and DAs
– Make a significant progress with Steps

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Propose plan for study gap
Study Gap
No Activity Description Duration
Read what the Step 4 involves and before starting to work on this
Step, ensure that your category team reviews (you will need to re-
assess the complexity and scope of your chosen product category

Develop Infographic & Notebook

in view of the Step 4 requirements. If your product category is too
A1
complex, Step 4 will become a cumbersome activity and if the
product category is too simple Step 4 becomes almost
meaningless) all the deliverables associated with Steps 1, 2 and 3
in light of the requirements of Step 4. 17 Sep - 23 Sep
In addition to secondary data, undertake stakeholder interview,
A2 observation and document review to refine Steps 1, 2 and 3
deliverables 17 Sep - 23 Sep
A3 Finalize your Steps 1, 2, 3 deliverables 23 Sep - 25 Sep
A4 Heads up 24 Sep
Move onto implementing Step 4 which involves 'developing
A5
sourcing strategy' 25 Sep - 04 Oct
A6 Zoom on-demand zoom meeting 27 Sep

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