A Methodology for the Procurement and Supplier Management System Reengineering Based on Core Competence: Case Study of a Notebook Computer Company

This paper proposes a method that is based on enterprise core competitiveness to reengineer a procurement and supplier management system. Competition of the notebook industry is becoming more and more intense, with the uncertainty of demand, the vast number of different components and their rapid change in design result in a very complicated supply chain. From the viewpoint of cost, the cost of components is at least 70% of the total cost of a notebook; therefore, components management is very important for improving the competitiveness of an enterprise. In this research, our focus is on the procurement and supplier management reengineering to improve competitiveness. The proposed methodology considers the overall view of the entire enterprise and the long term optimization perspective to reengineer the procurement and supplier management system. The Difference Analysis method is used to check the differences of the enterprise performance and the required measures of the key success factors. Based on Difference Analysis, the strategies for procurement and supplier management can be generated. Then, the Balance Scorecard and the Strategy Map can be introduced to draft and link each perspective goal of procurement and supplier management. Finally, the Perspective Analysis of Architecture of Integrated Information System (ARIS) is used for deployment from the business management perspective to the operational perspective. In conclusion, the reengineering method is linked to the enterprise core competitiveness, and then, down to the procurement and supplier management operation system in order to continually improve an enterprise’s performance. In order to verify the practicability of the proposed methodology, an Original Equipment Manufacturing (OEM) notebook company in Taiwan is used to apply the reengineering methodology.