SMA – The Supply Market Analysis-framework for analysing supply markets within the strategic sourcing process

Abstract

Knowledge on the supply market is a vital part of every sourcing process. It facilitates the selection of the correct sourcing strategy and methods by shedding light into market characteristics and an organisation’s position within it. In order to deliver the best possible results, an in-depth knowledge of the supply markets characteristics and an organisations position within them has a big impact on the success of a companies’ procurement initiatives. In recent decades, the scope of supply markets has changed considerably. From local to regional markets, companies nowadays face dispersed supply markets all over the world with considerable dynamics. This increased complexity has raised the demand for more and more complex market knowledge and increased the challenges that procurement specialists face in gathering knowledge and constructing the big picture of a supply market. This article deals with the analysis of supply markets and develops the supply market analysis framework (SMAframework) and shows how the results of the analysis can be used in strategic sourcing initiatives. Furthermore the article presents a research process and the implementation of the framework and process in the corporate procurement department of Coloplast A/S and discusses key learnings.