A commodity strategy is the purchasing plan for a specific product or service (commodities) that facilitates the management of the supplier base, avoids and/or proactively solves potential problems, and is the basis of future Postal Service business practices surrounding a purchase of the commodity involved. The competitive market demands that the purchase/SCM team develop focused concepts and methods and apply them to purchasing behavior. A commodity strategy is based on the CSSP that ensures the use of systematic processes for developing strategies to achieve SCM goals that fully support objectives. Strategies, as their name implies, should be strategic and focus on standardization and innovation, not just on technical and tactical support. Strategies are developed by establishing goals and specific baselines that are generated by a thorough understanding of the external supplier environment and the internal client reality. Every year, strategies are reviewed in face-to-face meetings with the purchase/SCM team and the VP, SM. The most crucial factors and points of reference for all category strategy planning are:
Early, detailed, cross-functional strategic planning is an essential component in meeting supply chain goals. Obtaining cross-functional involvement ensures a more holistic view of the purchase process and enables SM to better meet its goals and its clients’ goals. Collaboration among the CMCs as an overall strategy requires:
Each CMC team is required to develop and maintain a written commodity strategy (including input from applicable clients) for each major spend category for which the team is responsible. The CMC team has a composition similar to that of a purchase/SCM team and comprises buyers, market analysts, price analysts, and item managers with expertise and experience specific to each commodity. The CMC team applies SCM business practices to both strategic sourcing and individual purchases and examines demand trends, the marketplace, and the supplier community to determine how to achieve best value for the clients and which practices will be of the greatest significance.
The strategies developed by the CMC team will focus on planned objectives, as well as the tactics and resources necessary to achieve client satisfaction and business success in the supply category in the coming year. It is especially important that the CMC team, when developing commodity strategies, identify the technological nature of the commodity (if any) and what technology is needed to support the purchase throughout the life cycle. Goals are translated into specifics and sequentially broken down according to:
A commodity strategy is developed by evaluating, considering, and leveraging data about the following:
