Developing Tailored Supply Strategies

Book excerpt: Purchased goods and services are an increasingly large proportion of public and private enterprise budgets. Historically, purchased goods and services have accounted for less than a third of an enterprise's budget, but today many enterprises spend more than two-thirds of their budgets on purchased goods and services. Similarly, the Air Force and the Department of Defense (DoD) spend nearly half their budgets for purchased goods and services and an additional sixth on weapon procurement (with only a third going to military and civilian personnel costs). (See pp. 1-6.) Because of the growing importance of purchasing, many enterprises have sought to develop supply strategies for their purchased goods and services. This monograph is intended as a resource for procurement personnel developing supply strategies for the Air Force or DoD. It does not analyze current military procurement practices but rather synthesizes academic, business, and professional literature on developing and applying supply strategies. Its core is a synthesis of nearly a dozen different processes found in the literature.