How to select strategic suppliers using portfolio analysis. Category segmentation requires organisations to work crossfunctionally on individual categories and examine the entire category spend, the marketplaces and individual suppliers. Over the years, ppm has become the standard in the field of purchasing portfolio models, and has. In this article, i would be looking at the advantages and disadvantages of peter kraljics approach with regards to defining purchasing activity and managing relationships.
Review of existing methods, models and tools for supplier evaluation. May 20, 2012 supplier preferencing model supplier preferencing is based on two dimensions revenuevalue of account the percentage of a suppliers business that the buyer currently represents the percentage of a suppliers business that the buyer could represent attractiveness of account the profitability of selling to the customer the. They are a collection of views on good practice within a particular subject area and are intended to provide direction on good practice with some guidance for context and interest. The supplier positioning model is a way that businesses rank their sources of supplies based on the amount of money spent with the supplier and the level of vulnerability a business has if that supplier fails. Supplier qualification and conducting sourcing tenders 16 class hours 1 class hour is 45 minutes course aims the training provides useful information for purchasing people, enabling them to set the most advantageous economic conditions with the suppliers at the beginning of a new relationship, while we. Supplier preferencing model professionals platform. First, think of one of supplier that you are dealing with today. To solve this problem, this paper presents a preference model based on hesitant fuzzy sets hfs to select suppliers. Supplier relationship and knowledge management ntnu open. Crocker managing satisfaction of service quality model 9 4.
Using the supply positioning model, procurements can be seen to range from highvolume, lowvalue, lowrisk transactional purchases. When technology is constantly changing in the suppliers industries in which case it will be hard to specify methodologies 3. Purchasing strategies in the kraljic matrixa power and dependence perspective marjolein c. Supplier preferencing matrix account attractiveness vs relative value of business.
Impact report template sample impact assessment 8 documents in pdf. Simplified example of a project risk register 26 4. Several analytical tools are appropriate for this stage. Professionals platform a platform for all professionals. The supplier preferencing model is based on two measurements that is revenue value of account and the amount of a supplier s company that the client currently represents. The preferences of a decision maker are then analyzed by altering preference parameters. Models of supplier preferencing and how you can increase your bargaining power. The criteria for measuring account attractiveness and suppliers capabilities are business specific. Pdf a preference model for supplier selection based on. Supplier positioning is the process of classifying spend with a supplier in terms of the profit potential and supply risk and assists in prioritising categories of spend and developing the right strategy.
Are you core to their business or merely a nuisance. By plotting the buying strengths against the strengths of the supply market, three basic power positions are identified and associated with three different supplier strategies. Purchasing strategies in the kraljic matrixa power and. Mastering procurement a structured approach to strategic. Once you know this, you can select an appropriate purchasing strategy. This model helps in prioritizing the efforts and developing supply strategy of continue reading supply positioning model. Using portfolio analysis and supplier preferencing to. The general idea of kraljics model is to classify the commodities by their preferred procurement strategy. In 1983 kraljic write that purchasing as it was known then and not procurement was carrying out activities routinely. Guidance for suppliers on the services offered by the supplier feedback service. This powerpoint template aids as a visual for prioritizing the tasks by developing supply chain strategies for the company. The supplier perception model high level of develop relationship with buying organisation core relationship with buying organisation attractiveness low marginal relationship with buying organisation exploit relationship with buying organisation low value of business high 6 marks question 1. Developing and implementing a strategic sourcing strategy. Beware the supplier s perspective figure 3 customer account portfolio matrix account attractiveness vs competitive capabilities adapted from directional policy matrix.
Understanding the kraljic portfolio purchasing model. Supplier positioning is the process of classifying spend with a supplier in terms of the profit potential and supply risk and assists in prioritising categories of. Late 1800s to the 1975 amendments to the securities exchange act. Jun 23, 20 this we will call supplierstrategic potentiallimitations of kraljics model 26. This will include a variety of supply chain models which address customer supplier relationships such as hp, scor, gscf, and iuessc model.
Buyer supplier relationship recommendation is procurement strategies and contract types in accordance with the method supply positioning model. A buyer must convert all of this data into meaningful knowledge and apply some meaningful tools to structure the information so that it will render an effective decision. Supplier preferencing analysis attention seeking, no response. Supply preference model powerpoint template slidemodel.
Supplier preferencing analysis attention seeking, new opportunities, no response. Overview of an erp system the basic architecture for an erp system consists of 12 business functions utilizing a common manufacturing database, as shown in figure 1. The kraljic portfolio purchasing model helps you do this. The kraljic matrix is one of the most effective ways to deliver accurate supplier segmentation. Where the impact of the supply chain on the procurement is significant, public authorities should demonstrate that they have undertaken an analysis of their supply chain. Mar 07, 2018 the model focuses on the following two dimensions as depicted in the example image, the supplier preferencing matrix. Unlike the spendrisk model aka supply positionkraljic portfolio purchasing, im in two minds about supplier preferencing, and thats not just because of the weird procurementjargon name on. Customer supplier relationship management models and frameworks can also be viewed within the context of the different types of supply chain models that exhibit customer supplier relationship management. Supplier relationship management srm interfaces 8. Supplier preferencing matrix acuity consultants ltd.
If we are unimportant to them then the meeting could simply be a necessary evil, in other words something they participate in for the sake of maintaining. Suppliers often feel that they have less power in buyer supplier relationships and that the customer decides the fate of the relationship. Market analysis and acquisition page 2 of 18 issue date. In 1983, peter kraljic devised a means to segment the supplier base in the article in hbr. Apr 26, 2016 unlike the spendrisk model aka supply positionkraljic portfolio purchasing, im in two minds about supplier preferencing, and thats not just because of the weird procurementjargon name on. Supplier preferencing the sales perspective youtube. Simplified example of rating strategic options 33 5. A preference model for supplier selection based on hesitant. Strategic procurement planning in the adb procurement cycle 2 2. Supplier preferencing examples of project or contract attractiveness 23 3. Point of contract office of interim management psm model.
Using portfolio analysis and supplier preferencing to guide us. Strategic procurement planning strategic approach 3 3. This learning module will ensure you understand the principles and be able to use the tool to successfully complete a supplier preferenci. Supply positioning model powerpoint template slidemodel. Supplier preferencing the category management handbook. Using portfolio analysis and supplier preferencing to guide. Positioning and supplier preferencing market analysis models outlined in this guideline to. Supply positioning model refers to segmenting the spend portfolio by risk and opportunity.
Obriens 2012 supplier preferencing model is a portfolio approach holding a perfect fit. However, the attributes for supplier service quality evaluation were simpli. Impact report template sample impact assessment 8 documents in pdf excel, business assessment report template what is business impact, impact report template sample impact assessment 8 documents in. Two tools are most often used in this process, the portfolio analysis matrix and the supplier evaluation scorecard. Today in your procurement job, instead of just thinking about your lunch break, why not practice this helpful strategic procurement tool called supplier preferencing, to think about how a supplier might view your company. This we will call supplierstrategic potentiallimitations of kraljics model 26. Managing supplier relationships in collaborative contracts in new zealand description a new zealand initiative to improve the performance of managing supplier relationships in collaborative contracts is applying a strategic supplier relationship management model. The overall attractiveness of the business to the supplier. Strategic sourcing introduction the cips practice documents are written as a statement in time.
Supplier preferencing analysis attention seeking, no. The supplier will be awarded a score 1 to 5 depending on its performance for respective criterion. Feb 28, 2017 the kraljic matrix is one of the most effective ways to deliver accurate supplier segmentation. The supply preference model is a strategic procurement tool. Supplier relationship management srm is first and foremost an approach used for engaging with suppliers on a level that reflects the priorities of the customer organisation. Figure strategic relationship positioning model srpm cousins, et al. Others include the pmms supply positioning model and the market management matrix which is a combination of both supply positioning and supplier preferencing models. Pdf a preference model for supplier selection based on hesitant. The supply positioning model powerpoint template is the graphic presentation of business sales concept for suppliers. The proposed model analyzes the cost and service quality of suppliers while. It is also called suppliers preference model, meaning, assessing how suppliers view the company. Supplier preferencing model supplier preferencing is based on two dimensions revenuevalue of account the percentage of a supplier s business that the buyer currently represents the percentage of a supplier s business that the buyer could represent attractiveness of account the. This topdown model shows how aggregate plans the business, sales, and production plans drive the detailed.
Apr 29, 2019 david atkinson explains the supplier preferencing matrix and how it is used by sales professionals in segmenting and prioritising their customers. With the help of this model, organizations rank their supplies based on the money spent with the supplier and the level of susceptibility a business has if that supplier fails. The value of a supplier s company that the client could signify the attractiveness of account, the productivity of selling to the customer, the purchasing power of the buyer. Portfolio analysis is simply a means of assessing a number of different key accounts, first according to the potential of each in terms achieving the organisations objectives and, second, according to the organisations capability for taking advantage of the opportunities identified. However, this research indicates that suppliers can influence the strength of the relationship, and thus their future revenues, through continued effective and efficient performance on projects. How the public sector can identify areas of high co2 impacts in their expenditure and act to reduce emissions. When there is a clear criteria for evaluating alternative solutions suggested by the suppliers competing for the contract 4. The kraljic portfolio purchasing model helps purchasers understand where their products are classified in terms of supply risk and profit contribution, and also know whether the balance of power lies with them or with their suppliers. Syson positioning graph strategie performance 85 72. The supplier perception model high level of develop. This minimizes the supply risk and makes the most out of buying power to enhance the organizations purchasing performance and yield. Advice on the use of planning conditions model conditions in planning applications and appeals. A hybrid of supplier preferencing and dpm figure 3 plots account attractiveness against suppliers capabilities relative to competitors, bringing into consideration factors that may drive a change in the relative value of the business. Supplier preferencingthe supplier preferencing model illustrates how attractive itis to a supplier to deal with a buyer, and the monetary valueof the buyers business to the supplier.
David atkinson explains the supplier preferencing matrix and how it is used by sales professionals in segmenting and prioritising their customers. Techniques for order preference by similarity to an ideal solution topsis, data envelopment. Gelderman faculty of management sciences mw, open university of the netherlands ounl, p. Supplier segmentation is one of the most important supply chainrelated. Nov 21, 2014 the supplier preferencing model is based on two measurements that is revenue value of account and the amount of a suppliers company that the client currently represents. Supplier preferencing is a way of understanding how your suppliers see their relationship with you. Supplier relationship management srm is first and foremost an approach used for engaging with suppliers on a level that reflects the priorities of the customer organisation and how best these needs can be achieved.
Supply positioning model identify the risk and value thresholds of the project. Positioning and supplier preferencing market analysis models outlined in this guideline to assist with the development of an appropriate acquisition strategy. The model focuses on the following two dimensions as depicted in figure 3. When the supplier has more technical or relevant skills than that of the buyer 2.
The supply positioning model powerpoint has matrix of four factors with risks and opportunities on yaxis and expenditure on xaxis. The model focuses on the following two dimensions as depicted in the example image, the supplier preferencing matrix. The general idea of kraljics model is to classify the commodities. The colorful template design gives a modern view to model for maximum audience engagement. This topdown model shows how aggregate plans the business, sales, and production plans drive the detailed plans for coordinating supply chain activities. It also evaluates the level of vulnerability and damage if a supplier fails.
Order preferencing and market quality on nasdaq before and after decimalization article in journal of financial economics 7. What is the nature of the market and how will the best suppliers be motivated to bid how do other buyers achieve value for money. A library of procurement tools, templates and guides, starting with resources for schemes and contracts. May 07, 2019 david atkinson explains the supplier preferencing matrix and how it is used by sales professionals in segmenting and prioritising their customers. Evaluating buyersupplier relationshipperformance spirals. Peter kraljics focus is about profiling a category of expenditure, while supplier preferencing is about. Despite its age, its a popular and useful model used in companies worldwide. Further, in almost all instances where there have been competing specialists onexchanges, these specialists have engaged in the practice of preferencing, as that term is defined in section 510c3 of the nsmia. To solve these problems, a preference model for supplier selection based on hfs was proposed in this paper. Market analysis and acquisition strategy guideline.
Supplier motivations blc 30405 procurement management. Customer account portfolio matrix acuity consultants ltd. The results can be significantly greater than traditional transactional based procurement methods. Justice nz km maturity model business model example, business advice.751 230 839 136 397 665 587 1401 1003 539 1174 1078 748 525 1056 747 1286 1012 652 132 861 667 823 1316 207 1051 1485 402 624 1427 58 446 316 139 341