Solution

Table of Contents

Executive Summary   2

1.0 Introduction   5

1.1        ROSHN Organisation. 5

1.2 Procurement/ Commercial Function. 5

1.2.1 Vendor Management Team (VMT) 6

1.2.2 Procurement and Commercial Teams. 6

1.3 Category of Spend. 7

2.0 Main Body   8

2.1 Sourcing Approaches. 8

2.1.1 Sole Sourcing (Monopoly) 8

2.1.2 Single Sourcing. 8

2.1.3 Dual Sourcing. 9

2.1.4 Multiple Sourcing.. 9

2.2 Category Analysis Applied to Sourcing Approach. 9

2.2.1 Kraljic Matrix. 11

2.2.2 Supplier Preferencing. 13

2.3 Supplier appraisal checklist 13

2.3.1 Selection vs. Award. 13

2.3.2. Weighted Decision-Making Criteria. 14

2.3.3. Carters’ 10C’s Framework. 14

2.3.4. Financial Appraisal: Management Accounts and Ratio Analysis. 15

3.0 Conclusion   15

4.0 Recommendation   16

References  17

List of Figures

Figure 1:ROSHN Vision, Mission and Objectives 4

Figure 2: Approval Supplier List Framework Agreements. 5

Figure 3:Procurement Cycle Diagram.. 7

Figure 4: Kraljic Matrix. 12

Figure 5: Carters’ 10C’s Framework. 15

1.0 Introduction

1.1  ROSHN Organisation

For the purpose of this assignment the selected organization will be ROSHN. It is one of the pillars of the Public Investment Fund (PIF) and is responsible for creating quality homes within the KSA real estate market (ROSHN, 2024). Currently, ROSHN holds over 60% of the residential construction market in KSA, positioning itself as a leading player in the real estate sector. The government of KSA has implemented a policy aimed at achieving 70% home ownership nationwide. This initiative caters to the diverse housing needs of the population according to their budgetary constraints. It focuses on supporting various sectors and fostering partnerships to enhance job opportunities and drive economic growth. The vision and mission of ROSHN can be summarized as follows;

Figure 1:ROSHN Vision, Mission and Objectives

Source: Summarised from PIF (2024)

According to the summarized figure 1, ROSHN’s operational success is founded on its forward-looking vision, mission, and core objectives. To support this, the organization allocates a significant budget of SAR 200 million to its Procurement and Supply Management (PS&M) activities (PIF, 2024).

1.2 Procurement/ Commercial Function

ROSHN’s Procurement and Supply Management (PS&M) department operates a structured framework for managing supplier relationships, starting with the creation of an Approved Supplier List Framework Agreement. The components of the agreement are as illustrated in the following;

Figure 2: Approval Supplier List Framework Agreements

Source: CIPS Module Notes

PS&M work in conjunction with the Vendor Management Team (VMT) and the Commercial Department both of which have specific roles assigned to the selection of a vendor and the procurement cycle.

1.2.1 Vendor Management Team (VMT)

The VMT on the other hand is expected to carry out market research and, in the process, analyze potential suppliers via Porter’s Five Forces and PESTLE analysis. They include the assessment of market forces; the analysis of the supplier capabilities is valuable when sourcing for materials. VMT have at the present time mainly been set up to concentrate with compliance functions which include managing the Pre-Qualification Questionnaire. (PQQ) and supplier registration, it is recommended that they expand their scope to incorporate these analytical frameworks to enhance supplier selection.

1.2.2 Procurement and Commercial Teams

The operational responsibility for the procurement cycle is vested with the PS&M team and with the assistance from the Commercial team, certain key phases like specification, tendering and asset management form part of this cycle. Within this cycle, responsibilities are divided as follows:

• Commercial team is supposed to have detailed cost control, and control of expenses relating to tenders and supplier, vendor compliance to system requirements.
• Procurement function is responsible for the selection, management and assessment of supplier responses to pre-qualify for certain contracts.

Coordinated procurement approach helps to establish sound and effective system for identifying and evaluating the suppliers and for managing their relationships all over the procurement cycle as illustrated in figure 3 below. These stages are illustrated as follows:

Figure 3: Procurement Cycle Diagram

Source: (CIPS, 2024)

1.3 Category of Spend

For this plan, the category of spend selected is construction materials. This category plays a pivotal role in ROSHN’s operations, as it directly impacts project timelines, operational costs, and overall project quality

2.0 Main Body

2.1 Sourcing Approaches

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