Sourcing Case Background: As a tactical buyer you’re tasked by the procurement manager, with a strategic initiative to source 2,000 laptops in a single procurement effort for the company. This initiative follows the organization’s decision to upgrade the IT infrastructure across departments to improve productivity and security, and to ensure that employees have the right tools to perform their roles efficiently. The company has a diverse workforce that requires laptops suitable for various tasks, from high-performance devices for data analysis to lightweight, portable machines for sales teams on the go.

The IT department has evaluated its needs and has developed a set of technical specifications, performance benchmarks, and software requirements. They now turn to procurement to lead the sourcing process.

Courses supporting the Sourcing Case

This case can be conducted with two experience levels in mind, Basic and Advanced. Main differences are that on advanced level, the buyer should consider/develop a suitable category strategy as input to the sourcing event, develop all documents required and also include negotiation using e-Auction.

Basic Level:

Following courses build the baseline for the case: 

• Introduction Tactical Procurement (link).
• Conducting RFQ by EFFSO (link).
• Sourcing Process 1 (link). 
• Sourcing Process 2a – preparation (link).
• Sourcing Process 2b – Sending RFQ (link)
• RFQ template (Request for Quotation) (link).
• General Terms and Conditions (link).

Following blogpost support the Basic level:

• Creating a Supplier Code of Conduct (link). Only if you are not familiar with Supplier Code of Conduct. 

Advanced Level:

On top of the Basic level are following courses required on Advance level:

• Category Management by EFFSO (link).
• Category Management – how to get started (link):
• Introduction to Procurement E-Auctions (Course 1 of 4 ) (link).
• Setting Up a Procurement E-Auction (Course 2 of 4 ) (link).
• Managing a Procurement E-Auction (Course 3 of 4 ) (link).
• Perspectives on Procurement E-Auctions (Course 4 of 4 ) (link).

Following blogpost support the Advanced level:

• Category Strategy in Laptop Procurement – Harness the Power (link).

Sourcing Case Instructions

Request from the IT Manager by email.

Subject: Request for Assistance in Sourcing 2,000 Laptops

To: [Procurement Manager]

From: [IT Manager]

Dear [Procurement Manager],

I hope this message finds you well. Our IT team is embarking on a significant upgrade project to replace our current laptops with modern, secure devices that meet the varying needs of our workforce. We’ve identified the need for 2,000 new laptops that align with the technical requirements outlined below. Your department’s expertise in sourcing will be crucial to the success of this project.

Key Requirements:

1. Performance: We require laptops with powerful processors and adequate RAM to handle our software requirements, especially for data analysis and multimedia editing.
2. Portability: A proportion of the laptops need to be lightweight and portable for the sales and field teams who travel frequently.
3. Battery Life: All laptops should offer at least 8 hours of battery life to sustain a typical workday without frequent charging.
4. Security: The devices must have built-in security features such as biometric authentication or hardware-based encryption.
5. Compatibility: Laptops should seamlessly integrate with our existing IT systems, including network connectivity, software, and peripheral devices.

Additional Considerations:

• Warranty: Each laptop must include a minimum two-year warranty covering parts and labor.
• Delivery Timeline: We aim to complete the laptop replacement within 8 weeks of the purchase order being issued.

Action Required: Please help us source 2,000 laptops that meet these criteria. We expect your team to draft a comprehensive RFQ and identify suppliers capable of delivering on time and within budget. Given the volume, we are open to negotiating favorable pricing and terms.

Let me know if you require additional details or clarification.

Best regards,
[IT Manager]

Instruction to the Buyer signed to the task (email from procurement manager)

As a buyer, your role is to identify, assess, and select the suppliers who can best meet these requirements. Following information come from the Procurement manager when getting the assignment:

Subject: FW: Request for Assistance in Sourcing 2,000 Laptops

To: [Buyer]

From: [Procurement Manager]

Dear [Buyer],

As you embark on this task, please adhere to our standard sourcing process and utilize appropriate decision points. The IT manager and I will act as the decision-making group, so keep us informed of significant developments. I recommend collaborating with a team from IT to ensure alignment.

Ensure that the suppliers selected for the RFQ comply with our Code of Conduct. I suggest considering competition as the primary sourcing tactic, but first, verify the availability of multiple qualified suppliers.

If we proceed with a competitive approach, I believe that the specifications provided by the IT manager require further refinement for clarity.

Ask colleague X to brainstorm the task before proceeding since she has some experience in the area.

Rgds

[Procurement Manager]

Brainstorming with colleague X.

You meet with colleague X and develop some ideas to consider.

1. Technical Assessment (RFI:

   • Familiarize yourself with the market and create understanding what the suppliers offer. Maybe suppliers can support in identifying models that meet IT department requirements?
   • Develop a checklist for verifying suppliers/models compliance to the key and additional requirements.

2. Supplier Identification (RFI):

   • Research potential suppliers, including manufacturers and distributors with a proven track record of delivering similar devices in bulk.
   • Ensure shortlisted suppliers can meet the delivery timeline and have access to delivery capacity .

3. Request for Quotation (RFQ):

   • RFQ incorporating all key and additional requirements.
   • Specify quantity, technical specifications (or even models), delivery timeline, and warranty conditions clearly.
   • Include evaluation criteria, such as pricing and adherence to requirements

4. Evaluate and Negotiate:

   • Assess the submitted quotations using a scoring model to rank suppliers.
   • Negotiate favorable pricing based on the high volume by using competition.
   • Ensure that warranty and service support are adequately covered.

5. Award Contract:

   • Recommend the supplier that best meets the IT department’s needs in terms of price, quality, and delivery.
   • Work with legal and procurement teams to finalize the contract terms.

6. Post-Purchase Management:

   • Monitor the supplier’s adherence to the delivery schedule and quality standards.
   • Coordinate with the IT team to ensure smooth deployment.

Your deliverables to the Sourcing case:

While this sourcing case provides a strong foundation, participants are encouraged to fill in any logical gaps by making assumptions, as it does not offer all the details.

The journey toward the result—applying the theories and methodologies provided in the courses—is far more valuable than the specific outcome of this sourcing event. Use this opportunity to experiment with different approaches, refine your tactics, and embrace the learning experience.

Basic Level

Be ready to discuss and/or present following at the workshop:

1. Create a realistic time-schedule. Use the standard sourcing process and utilize appropriate decision points.
2. How would you position the sourcing event in Kraljic Matrix, hence what would be your sourcing tactic?
3. Would you use step 4 of the sourcing process? If yes, what data would you collect?
4. In step 5 and 6, how would your evaluation model look like and is there a connecting to how you collect information from the suppliers in the RFQ?
5. Write “RFQ following letter” including a list of documents you would include in your RFQ. Use template provided in the courses or template in your company.

Advanced level

Be ready to discuss and/or present following at the workshop:

• Created a high level category strategy based on a fictive market analyses.
• Create a realistic time-schedule. Use the standard sourcing process and utilize appropriate decision points including a project team and a steering group. Set up the schedule för e-Auction as negotiation method.
• Create an RFI including selection criteria and evaluation model. Populate your model with 10 fictive suppliers answers to the RFI.
• Develop a comprehensive Request for Quotation (RFQ) that includes all technical specifications, delivery schedules, and warranty requirements.
  • Ensure that the RFQ clearly defines evaluation criteria for selecting the most suitable supplier.
• Down select suppliers for e-Auction using the Evaluation model (based on fictive answers)
• Invite to, plan and conduct an e-Auction.

In conclusion, this sourcing case offers a opportunity for you to apply your theoretical knowledge to a real-world scenario, emphasizing strategic thinking, thorough evaluation, and effective negotiation. As you work through the deliverables requested, remember that the journey of applying procurement theories and methodologies is much more valuable than the final sourcing outcome. By critically analyzing supplier options, developing comprehensive RFQs, and formulating negotiation strategies, you will strengthen your skills as a buyer and strengthening your ability to make informed decisions that align with the organization’s goals.

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Should you want to include the sourcing case in training for your buyer team or your students, please contact LHTS. 

Note: Illustration to the case “Sourcing case 2000 standard laptops” was created by Chat-GPT on May 9, 2024.

Information about our Online Procurement courses in Swedish.