THUYẾT TRÌNH SCM

SLIDE 1 BĂNG
Hi, everyone. Good to see you all today
What group 3 going to talk about today is Procurement and outsourcing
SLIDE 2
Here is not only the group members but also the evaluation of each member during this
project.
SLIDE 3

The outline is begin with Introduction, then I will look at Outsourcing Benefits and
Drawbacks finally Global sourcing and procurement at NIKE

SLIDE 4,5,6

I’d like to give you some background information about Outsourcing, now we will watch
a short video to know more about this. Remember everyone should take note of key
words then we will have a question after that. LET’S WATCHING

SLIDE 7

How do you feel about this video? MY group has a question related to the video you guys
have watched. PLease discuss in group this question in 2 mins then answer. Remember if
the group has the correct answer, you will receive a special present and bonus point.

WHAT IS OUTSOURCING?

SLIDE 8

Yah, that is the correct answer, I wanna add some main information.

procurement and outsourcing: A method of finding and hiring the services of an

external supplier to take on various aspects of the procurement process., Non-core
activities

SLIDE 9

Outsourcing procurement services can alleviate these issues by enabling outside

specialists to manage the process on their behalf. Especially, When firms outsource to
third-party vendors, they are sourcing goods and services.

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Besides That, Allowing organizations to redesign business processes and overhaul

operations and systems. Today, outsourcing is a key factor in strategic formulation

SLIDE 11

Next is a multiple choice to check your knowledge about outsourcing?I think this is not
complicated for you. If you know the correct answer, you will receive a gift immediately.

How many ways are there to optimize business operations? A .1 B. 2( procurement and
outsourcing)(correct) C. 3

SLIDE 15 Type of Outsourcing ( NHI 15 - 23)

Now, We will gain more information about Outsourcing. There are two types.

Firstly, through Geographical boundary

Secondly is Service Outsourcing

SLIDE 16

In terms of Geographical boundary, it is divided into three small groups: onshore,

nearshore, offshore. Are you familiar with these frameworks? I think everybody has
heard about this but hardly anyone knows much about it.

SLIDE 17

To get to know about the type of outsourcing better, please discuss with teammates about
three types of Geographical boundary, you just find what is the difference between them,
then write down on your paper. You have three minutes to find out this information.

SLIDE 18

Your answers are correct, I will just review some main points here.

Firstly, Onshore Outsourcing, that means Relocating work or services to lower-cost

locations in the company's own country to optimize cost, production time, and also
freight delivery.

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Next is nearshore and offshore. In term of nearshore, This is Relocating work or

services to people in nearby, often bordering regions and countries, while offshore is
Relocating work or services to third-party providers overseas

SLIDE 20

According to Service outsourcing, it has three main categories

KPO Knowledge Process Outsourcing: The outsourcing of core work to individuals that
typically have advanced degrees

BPO Business Process Outsourcing: A company outsources entire business functions

handled by another company

ITO Information Technology Outsourcing: The use of external service providers to

effectively deliver IT-enabled business process, application service and infrastructure
solutions for business outcomes

SLIDE 22. 1.3 STEPS TO …..

You can see on the slides that there are 6 Steps to select the company that offers
Outsourcing. Beginning with Determine the purpose, and ending with Checking the
project

SLIDE 23 step 1 + step 2

Determine the purpose: Identifying process, service or product requires external

machining and the purpose to hire machinery. Before Researching the right Outsourcing
Vendor and setting up a RFI. IN step 2, they Contact the local regulatory body and
request suggestions/ references. Then, participate in social media focus groups and
request recommendations

SLIDE 24 Step 3 + step 4 LÂM

After collecting the RFI, removing the inappropriate workplaces, proceeding with the
RFP - Request for Proposal, the company Received all the RFPs, it should not reject
service providers based on their content or cost, everything is negotiable, Moreover,
Prepare a list of questions that the team has thoroughly investigated and debated.

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SLIDE 25 step 5

The initial step in this process is Negotiating contracts: Place the Service BPO Providers
in order of preference and send the following contracts to the BPO partner, which meet
these criteria such as: Service Level Agreement (SLA). Scope of Work. Schedule of
Payments.

SLIDE 26 STEP 6 + 7

Examine whether a supplier's project management process is effective after choosing a

service provider to manage business processes and applications.

SLIDE 27 2.1

Turning to Strengths and Limitations of OUTSOURCING

SLIDE 28 Benefits of Outsourcing

We will analyze about Benefits of Outsourcing

The first is Cost Reduction. More specifically, Reduced costs such as costs associated
with setup, operations, and hiring and Companies may enter international markets,
increasing their market share and profitability.

SLIDE 29

Beside that, the operation can Focus on Core Competencies: Help the corporation free up
more time to concentrate on its primary business operations or job assignment in order to
lower error rates and Businesses can concentrate on their core skills instead of investing
on every aspect they are not an expert.

SLIDE 30

Outsourcing can increase the Flexibility and Scalability

Businesses may readily modify their staff and resources to suit evolving business
requirements. Offers the flexibility to scale up or down operations based on business
needs, without the need for large investments. Additionally, Third-party logistics partners
can scale space, labor, and shipping according to current inventory

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SLIDE 31 Drawbacks of Outsourcing

Turning our attention now the Drawbacks of Outsourcing

- Loss Of Competitive Knowledge: Competitors may have more chances if essential

components are outsourced to suppliers. In the same way, outsourcing suggests
that businesses are unable to offer innovative designs that serve their own goals
rather than those of the provider.
- Conflicting Objectives: IN manufacturing, suppliers place a higher value on
stable, long-term agreements than do purchasers. Suppliers emphasize cost
reduction above flexibility due to decreased profit margins
- Quality Control Challenges: Potential quality problems and disagreements with
company quality service providers like delays, errors, flaws, non-compliance, and
feedback from clients. This can make your customers less satisfied.
- Dependence on Suppliers: supply chain interruptions, problems with quality
control, pricing volatility, a lack of innovation and flexibility.

SLIDE 32 Risk mitigation LÂM ĐỌC 3 CÁI MÀU VÀNG TRONG SLIDES THÔI NHA

This is important because the way we scope the situation can strongly affect operation
efficiency. There are some measure to reduce the risk

Choose the packages that the company wishes to contract out.; Taking a close look at risk
control procedures and their efficacy.; Draft and examine the terms of the contract; Plan
to bid competitively to obtain favorable terms.Keep an eye on the risk control measures.;
Last but not least, Track performance outcomes on a regular basis

SLIDE 33 A frameworks for Buy/ make HIỀN

Let’s now turn to A frameworks for Buy/ make. I think this part is the most important
part of this presentation today.

SLIDE 34 Definition

A framework for buy/ make decisions means The choice of whether to create something
internally or outsourced is critical to a business's success., speak to a comparison of the
costs and advantages of producing in-house versus buying it elsewhere.

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SLIDE 35

To classify the reason of outsourcing, they divided into 2 main categories:

The first is dependency on capacity: In this case, despite having the knowledge
and skills necessary to produce the component, the company chooses to outsource for a
variety of reasons.

The second is dependency on knowledge: The lack of workers in company,

expertise, and resources necessary to manufacture the component and external sources
needed to access these capabilities in this kind of reliance.

SLIDE 36 integral products and modular products.

According to Ulrich and Swaminathan, products are categorized into two types: Integral
products and modular products.
- Modular products are created by assembling various components. First and
foremost, they are autonomous from each other.. Can be designed or improved
with minimal consideration for other components. The product configuration is
determined by customer preferences.
- In contrast, an integral product consists of components that have closely linked
functionalities: Integral products do not utilize pre-existing components. Integral
products are systematically designed from the top-down. Components within
integral products serve multiple functions.

SLIDE 37 38 TƯƠNG TÁC

Ok, now to understand the further session deeply, Please discuss in your group about,
give an example related to make and buy decision. You don’t need to write down the
answer on the paper. After 2 minutes of discussion , the presenter of the group stood up
and talked about this example. 2 minutes countdown.

Yah, that right, luckily your example is similar to our group, So I will summarize this
example through this table…

SLIDE 39 Hierarchical Model to Decide Whether to Outsource or Not

This leads me to the next point, which is Hierarchical Model to Decide Whether to
Outsource or Not

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The hierarchical model that includes five criteria:
Firstly, customer Importance: How important is the component to the
customer?What is the impact of the component on customer experience? Does the
component affect customer choice? In short, what is the value customers attached to the
component?
Secondly, Component clock speed: How fast does the component's technology
change relative to other components in the system? Their Competitive position. Does the
firm have a competitive advantage producing this component?
Thirdly, Competitive position: How many suppliers exist?
Fourthly, Capable suppliers: How many capable suppliers exist?
Finally, Architecture: How modular or integral is this element to the overall
architecture of the system?

SLIDE 40 example
This is a table illustrate the example related to The hierarchical model
CỘT ĐẦU
Critical & Highly Standardized

Production of standard sneakers for mass market

REASON: Needs to maintain consistent quality and standard specifications for its
core product line.

DECISION: Continue in-house production to maintain quality control and

consistency.

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SLIDE 41 PROCUREMENT Strategies for overcoming challenges THU QUỲNH

An increase in the number of suppliers leads to a corresponding increase in the

complexity and riskiness of the supply chain.

Firms must not only efficiently oversee suppliers but also address inquiries such
as: How can the firm develop an effective purchasing strategy? What are the capabilities
needed for a successful procurement function? What are the drivers of effective
procurement strategies? How can the firm ensure continuous supply of material without
increasing its risks?

SLIDE 42 Relationship Management (Kraljic’s Supply Matrix)

The Kraljic model enables firms to manage various suppliers effectively by

categorizing supply categories in a matrix. This approach allows companies to optimize
earnings while avoiding risks associated with the supply side.

SLIDE 43

Profit impact: Related to whether the product provides more or less impact on
profits, the cost of creating the product is more or less.. The more significant the purchase
quantity or total cost, the higher the impact on profits.

Supply Risk: Regarding supply complexity, supply risk is evaluated based on

factors such as availability, the number of suppliers, competitive demand, make-or-buy
opportunities, storage risks, and substitution opportunities.

SLIDE 44 Strategic Items

Let me explain more about the Kraljic’s Supply Matrix. Firstly, Strategic Items, High
Risk, High Value, From partnerships

Often consists of raw ingredients and frequently sourced from one provider. here is often
a power equilibrium between the purchaser and the provider The cost price of final goods
is mostly influenced by raw materials

SLIDE 45

Secondly, Leverage Items, Low Risk, High Value, Exploit purchasing power and
minimize cost

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These types of products are easily purchased from many different suppliers in the market,
and they influence the cost of completed goods, such as air conditioners and computers.
Buyers have the dominating position in the power between buyers and suppliers.

SLIDE 46

Next box is Bottleneck Items. It has High Risk, Low Value, Ensure Supply

This means Despite low intrinsic worth, these commodities are very susceptible to
disruptions and significantly impact the whole supply chain. Characterized by a power
imbalance, with the supplier holding a dominating position.

SLIDE 47

Lastly, Non-Critical Items, Low Risk, Low Value, Simplify and Automate. Non-critical
items cause the most minor problems in company procurement. Cause the most minor
problems in company procurement. In relation to this item, an equilibrium of influence
exists between purchasers and suppliers.

SLIDE 48

After analyze about four components of Kraljic’s Supply Matrix organizations can tailor
procurement strategies that effectively manage each category

SLIDE 49 2.3.2 Continuous Improvement

The problem is to build a framework that helps businesses assess the optimum
supplier footprint. If items are categorized based on need logically, firms will choose the
appropriate supply chain. After more than ten years of researching supply chains,
Marshall Fisher found the answer to the above problem in the famous article "What is the
right supply chain for you?".

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SLIDE 50 ĐẮC HƯNG

According to his analysis, goods may be classified into two classes: functional products
and inventive products.

- Functional products are Goods with consistent demand and steady pricing in the
market and Prioritize the reduction of the total landed cost. Usually, sourcing from
low-cost countrie
- Innovative products: Products include many goods, including fashion items,
cosmetics, and high-tech products. Occasionally, expedited delivery may be
accomplished by using air cargo.

SLIDE 51

I’d like to illustrate this point by showing you TABLE Characteristics of Functional vs
Innovative Products ĐỌC BẢNG

SLIDE 52 53

Another significant part is E - PROCUREMENT . What is the first thing that comes to
your mind when I mention E - PROCUREMENT? Please raise your hand to answer this
question, if it is correct, you will receive a bonus point from the teacher.

[SAU KHI TRẢ LỜI XONG] Yah, this is correct,

SLIDE 54

The buying and selling of goods and services via the Internet, like electronic data
interchange and enterprise resource planning. Today's e-procurement encompasses
everything that's done on an information technology platform, from searching, selecting
suppliers to bidding, purchasing, and managing data, contracts.

SLIDE 55

AI and machine learning may be integrated by businesses into apps for contract
administration, strategic sourcing, and expenditure analysis

SLIDE 56

There are four main types of E - Procurement.

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The first stage is called e-informing, which means exchange of information from one
party to another, usually across units and external parties.

The second is E-Sourcing refers to pre-qualifying all suppliers, allowing a company to

see which are most qualified for evaluation.

Nextly, E-Tendering. provides support in the selection phase of tendering and acts as a
communication platform between purchasers and suppliers.

The Fourth is E-Auction. The buyer can do a reverse auction where they ask for bids
from suppliers and get the lowest by accepting it.

Finally, E-Ordering: Companies usually use a digital catalog to store their rendered
contracts to make it easier for new employees to find information quickly.

SLIDE 57 Benefits of E-Procurement

There a myriad of benefit when using E-Procurement:

Building network connections with partners: Instead of taking time to get to each
vendor’s location to negotiate a purchase, with E – Procurement, buyers and suppliers can
negotiate anywhere thanks to an efficient network of information exchange

Reducing issues related to the law

Shortening the purchase process when trading through online systems, the price data will
be kept confidential. Suppliers who have a good price policy will be considered to
cooperate. From there, create a fair competitive environment between suppliers.

SLIDE 58 Challenges and Future Trends

Beside the good ground of E - procurement, there are various challenges that should not
be ignored.

Lack of infrastructure Invest in infrastructure improvements and provide

alternate or backup options

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 Legal and regulatory examine and change their legal and regulatory frameworks
issues

Organizational and conduct awareness and education campaigns, and provide

cultural factors training and support

Technical and engaged through awareness campaigns, training, and

operational issues support, adhere to international or regional standards.

SLIDE 59 BĂNG

After discussing everything related to outsourcing and procurement, We are going to

analyze about Global sourcing and procurement at NIKE

SLIDE 60 VIDEO

I think the video perfectly shows how Nike development and outsourcing

SLIDE 61 3.1 Nike background OVERVIEW (khi ko chiếu đc video thì coi cái này)

SLIDE 62

This picture shows Nike’s Supply Chain - simplified models with upstream concentrates
on suppliers and downstream section

SLIDE 63 3.2 NIKE OUTSOURCING

Outsourcing is what has made Nike into the billion dollar industry and the industry
leader in footwear that it is today
Half a million people around the world have been hired to help produce their
products . Nike outsources 100% of their shoe production
Nike only participates in the process of researching, prototyping products and promoting
and distributing products to consumers.

SLIDE 64 Where Nike products are made

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I’d like to illustrate how strong Nike outsourcing is by showing you a picture Where
Nike products are made. The list of factories that supply materials must also be under
Nike's control

SLIDE 65 Nike’s principal sourcing locations

Nike’s principal sourcing locations include China, Vietnam, Cambodia and

Thailand. Credit: GlobalData’s sourcing scorecards For instance, when a shoe model
is designed, Nike will deliver the shoe model to a factory for sample production. If the
sample product meets the standards, Nike will sign a contract with the factory for mass
production.

SLIDE 66
According to Nike’s case, the data below shows the figure related to the sourcing
performance. The period from 2017 to 2023, Nike's revenue underwent a moderate
increase, this means that Nike gained a lot of revenue from business activities.
SLIDE 67

In conclusion, Looking into the future, Nike is positive about its prospects, focusing on
long-term and profitable growth in fiscal year 2024 and beyond.

Well-positioned in the sports footwear and apparel market, with a strong track record of
financial performance and an emphasis on innovation and digital transformation.

Thank you all for listening. It was a pleasure being here today

SLIDE 68 NHI
To make sure that all of you understand about this topic today. Let's tackle the last
question: How many factors are in the hierarchical model? ( ĐỌC SLIDE)
A. The process of managing a company's internal supply chain.
B. The method of finding and hiring the services of an external supplier to take on
various aspects of the procurement process. (Correct)
C. The responsibility of a company's marketing department.D. A type of financial
product offered by banks.
Correct answers, you will receive a gift from our team right now.

SLIDE 69 NHI
The last question. What is procurement outsourcing?
A. The process of managing a company's internal supply chain.

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B. The method of finding and hiring the services of an external supplier to take on
various aspects of the procurement process. (Correct)
C. The responsibility of a company's marketing department.
D. A type of financial product offered by banks.

SLIDE 70. NHI

That is the end of our presentation today, if you have any question, please write your

hand. Thank you.

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