Question

a) Many large companies have opted for a hybrid structure to organize their purchasing
activities. Why would companies choose such a structure?

b) How would you as a corporate purchaser proceed with developing a sourcing strategy
for transportation services category and ensure that centrally negotiated (corporate)
frame agreements are used?

Answer 1

Q1: Many large companies have opted for a hybrid structure to organize their purchasing
activities. Why would companies choose such a structure?

Ans: Hybrid structure of purchasing activities:

- Hybrid structure of procurement adopts a pick and choose approach to sourcing with a central leadership structure supported by local manager with some degree of autonomy.

- It has more advanced technology, communication and working processes make sourcing strategies simpler for company.

- The most effective hybridised structure of sourcing strategy make communication better inside organisation.

- It is very for company to adopt hybrid structure of purchasing activities.

- Cost effective for company.

Q2: How would you as a corporate purchaser proceed with developing a sourcing strategy
for transportation services category and ensure that centrally negotiated (corporate)
frame agreements are used?

Ans: - Category segmentation

- Specify business requirment-

- Supply Market analysis.

- Sourcing selection

- Process testing

- Negotiation and contracting

- Transition

All these are centrally negotiated agreement ensured.