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Solution
Table of Contents
2.0 Category of Spend and Positioning. 4
3.1 Application of Identified Sourcing Approaches in SDC Organisation. 5
3.3 Hierarchy of Business Needs 11
3.4 Management of Stakeholders. 12
4.0 Sourcing Appraisal Checklist 15
4.1 IT Systems suppliers appraisal 15
5.0 Conclusion and Recommendations. 16
Figure 1:SWOT Analysis Summary. 7
Figure 2:Summary of Kraljic Matrix. 10
Figure 3:SDC Maslow Hierarchy of Needs Summary. 12
Figure 5:Peter Block Stakeholders Analysis. 14
Figure 6:Cater’s 10C’s of suppliers appraisal 15
1.0 Introduction
In line with the kingdoms vision 2030 and dedicated to the Kingdoms cities, Saudi Downtown Company (SDC) is a development company that grows unique and vibrant downtown areas presenting city culture and community lifestyle which shall be one of best destination for offering work, living experience of entertainment experiences of the highest standards that are attuned to their needs (Saudi Downtown Company, 2023). The main target of SDC are improving the quality of life and achieving economic development through their projects that will provide job opportunities, commercial, investment and tourism opportunities visit that will enhance the attractiveness of these cities. Formed in early 2020, SDC is a fully owned subsidiary of the Public Investment Fund (PIF) and is undergoing a rapid mobilization to meet their mandate. This is a significant challenge, as each of the 12 sites represent 12 unique projects that must be considered separately. The mandate is to be delivered within the next 3 to 5 years, with targeted strong participation with the private sector through partnership and direct sales. The author of this report works in Procurement and Supply Department (PS&M) as a leader in strategic sourcing. Their responsibilities is ensuring overall sourcing process is not short-sighted but futuristic and prioritising on improving success of PS&M. Through ensuring SDC adopts the best practice, the author achieves in ensuring they optimise costs, mitigate risks and build robust supplier relationships to meet their procurement needs efficiently.
2.0 Category of Spend and Positioning
Today, SDC is involved in active sourcing of upto 60 distinct technological and innovative systems targeting improvement of efficiencies and lowering operational costs incurred. This is evidenced by what Arab News (2023) identify as a recent agreement with the Ministry of Communications and Information Technology (MCIT) for development of an infrastructure and communication technologies. In SDC, determining the most appropriate sourcing strategy for their different categories of spend facilitate an appropriate management and controlling PS&M operations. The best practice can be informed by analysis carried out for SDC needs, demand and supply levels in their value chain.
3.0 Sourcing Approaches
Multiple Sourcing
Multiple sourcing is defined in CIPS (2022) as a form of procurement inclusive of engagement of immense suppliers for meeting sourcing requirements of the organisation. This is best used in organisations operating in business environment categorised as open-based market allowing trading to all with suppliers equally engaging various organisations.
Single Sourcing
Single supplier sourcing is an approach used to purchase goods or services exclusively from a single supplier. Instead of engaging or inviting competitive suppliers to tender or bid. Single Source procurement method shall be undertaken as a last resort or when directed by the competent authority that is empowered to direct such actions (CIPS, 2021).
Dual Sourcing
A dual supplier source refers to procurement strategy that relies on two different suppliers for a particular product or service (Gehrig & Stenbacka, 2023). The objective of implementing a dual supplier strategy is to enhance supply chain resilience and mitigate potential disruptions. Having two suppliers spreads the risk and reduces dependence on a single source.
Sole Sourcing
A sole source is buying goods or services from a single supplier without soliciting bids from multiple sources. It is an exception to normal purchasing procedures and is permitted only when certain conditions are met, such as compatibility, proprietary, or uniqueness of the item or service. Sole source procurement can also refer to a situation where there is only one supplier available for the required product or service that your organisation needs (Grossman et al., 2021).
3.1 Application of Identified Sourcing Approaches in SDC Organisation
3.1.1 Multiple Sourcing
As identified in definitions, multiple sourcing is most appropriate for sourcing IT products and services in SDC. This is since under the umbrella of MCIT, the organisation involves various suppliers who include IBM, Apple, Google, Samsung, Microsoft and Hp (Construction Week, 2022).
For SDC, use of multiple sourcing is double-fold and entail;
- With IT systems available from international suppliers, engaging multiple sourcing enhance ease top handle different systems
- SDC prioritise on spreading of evident demand scope by different suppliers for achieving maximum costs and identifying appropriate suppliers/vendors. In SDC, this entail enhancing awareness amongst suppliers on budgetary allocation by SDC, expected IT systems quality and prompt provision (time). The optimisation of costs and ensuring high quality after-sale services also assured
As evidenced in Gaur et al. (2020) an embrace of multiple sourcing advantages include reaching out to a broad-range of suppliers to select. Hence, a failure/inadequacy of a particular supplier in meeting SDC expectations, an alternative is involved. The outcome of this is reducing overall supply chain bottlenecks. Another advantage is that multiple suppliers lead to increasing competitiveness, innovativeness and flexibility in delivering their operations.
Nevertheless, there are equally linked disadvantages to be put into account. These include challenge to maintain data/records and SDC (BUYER) preference for multiple suppliers. This is specifically the case as SDC has not been in a position of using e-catalogues in electronic displaying of sourced products and services.
In the process of sourcing IT, multiple sourcing is essential owing to technical and operation systems quality. In SDC, involving the HSE department lead to increased safety harnessed and leveraging on supply and market inclusion for sourcing appropriate suppliers. The use of various sites facilitate buyer and sellers in accessing and sharing data on overall requirement and offering. SDC can potentially engage IBM, Apple, Google, Samsung, Microsoft and Hp to source their IT systems.
Further, for evaluating appropriateness of multiple sourcing for IT systems, SWOT analysis is applicable. As evidenced in CIPS (2023) it evaluates strengths, weaknesses, opportunities and threats;
Figure 1:SWOT Analysis Summary
Source: Summarised from CIPS (2023)
For SWOT analysis findings, SDC can get profits and dominate the KSA vibrant downtown destinations when they engage multiple suppliers to source for IT systems. Strengthening of stakeholders relations would be essential hence successful in sourcing process. The factors of IT development, support from KSA administration all inform need for engaging multiple suppliers successfully.
Further, with multiple sourcing being more relevant for organisations operating in open market, STEEPLE analysis can be used for market analysis (see table 1);
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