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Purchased goods and services are an increasingly large proportion of public and private enterprise budgets. Various enterprises have therefore developed more or less successful supply strategies. This monograph draws lessons from their experiences for the Air Force and the Department of Defense by synthesizing academic, business, and professional literature. The authors offer a series of steps for analyzing spending, segmenting it into major commodity groups based on value to the enterprise and vulnerability, prioritizing these groups for purchasing and supply management efforts, and developing and executing purchasing strategies for them. Both the initial segmentation of commodity groups and the development of supply strategies for them involve use of cross-functional teams comprising experts in the commodity and its uses, as well as other stakeholders. The authors describe the makeup of these teams and their tasks and goals. Finally, the authors note that, although some activities are common to most supply strategies, no one process is likely to fit all enterprises and commodities. An approach that delivers the most rewards to the enterprise will require extensive analysis.

Table of Contents

  • Chapter One

    The Increasing Importance of Supply Strategies

  • Chapter Two

    The Evolution of Purchasing

  • Chapter Three

    The Need to Tailor Supply Strategies

  • Chapter Four

    Developing a Supply Strategy: Assessing and Prioritizing Enterprisewide Opportunities

  • Chapter Five

    Developing a Supply Strategy: Developing and Executing a Commodity Group Strategy

  • Chapter Six

    Conclusions

  • Appendix A

    A Process for Grouping Requirements in Developing Supply Strategies

  • Appendix B

    Organizing for Supply Strategy Development

  • Appendix C

    Prospective Supply Risks

Research conducted by

The research described in this report was sponsored by the United States Air Force and conducted by RAND Project AIR FORCE

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