L4M6 Book Flashcards
Remember
An Internal supplier normally produces products and services that are core to the organisation - Make or buy decision if the internal supplier will carry out the work or will they outsoure it.
Remember
When making a decision to use an external supplier the buyer must evaluate all of the risks carefully - advantages are disadvantages to external suppliers there may be long delivery times. Natural disasters etc. Positives are they are experts in the field. May be more cost effective(economies of scale). Small volumes etc. ESG (Environmental , Social and Governance (a measurable sustainability assessment.
Remember
When negotiating, a buyer will use different tactics depending on the relationship it wants to establish with the supplier - kraljic matrix matches up with steel and court supplier matrix. As the reltionship increases different tactis used. may establish win win relationships.
Remember
There are eleven types of relationship that make up the CIPS
Relationship Spectrum. As you move from left to right on the spectrum the level of closeness and collaboration increases.
Adversarail relationships
Arms length
transactional Relationships
Moderate relationships
Bespoke relationships
Single source realtionships
Outsourced relationships
Strategic relationships
collabrative relationhsips
Partnerhsip relationships.
Apply
Think about the supplier relationships in your current organisation. For five supplier relationships that you have knowledge of, try to locate where you think they would be on the CIPS Relationship Spectrum.
On the relationship spectrum
NHT would be high as we have more of a strategic partnership
Arco would be transactional .. small amount on costs no need to contact them much.
Emi seals - single source suppliers .. would be in the middle as we need to keep in contact and maybe order more than usual.
Check
List all eleven types of relationships that make up the CIPS
Relationship Spectrum
Low to high
Adversial relationship
Arms length relationship
Transactional relationship
Moderate relationship
Bespoke relationship
Single source realtionship
Outsourced relationship
Strategic relationship
Collaborative relationship
Partnership relationships
Co-destiny relationship
Remember
There are six phases to the relationship life cycle.
* On-boarding
* Qualification
* Segmentation and risk management -
* Performance management
* Development and innovation
* Phase-out (if required)
Check
What are the benefits of supplier development for the buyer?
- Can reduce costs for the buyer and supplier
- Working togther can result in elamination of waste
Buyer may need to undertake supplier actvities if previous supplier had quality issues.
Remember
Pareto analysis and ABC analysis are based on the 80/20 rule.
ABC uses a left to right axis. 20% of the products used to manufacture a car will make up 80% of the cost.
A - Items account for 80% of cost 20% volume.
Pareto does not account for market complexitity.
Remember
The Kraljic matrix can be used to develop procurement strategies.
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Remember
The Kraljic matrix has four quadrants - routine, bottleneck, leverage and strategic.
The Kraljic matrix has four quadrants - routine, bottleneck, leverage and strategic.
Check
What are the four quadrants of the Kraljic matrix? Can you draw the matrix?
Top Left:Leverage
Top Right: Strategic
Bottom Left :Routine
Bottom Right: Bottleneck
Remember
In order to segment the supply base the buyer should make a list of all products and services in ascending order of value and then evaluate the risk of supply for each item. Following this, each product or service should be positioned on the matrix and the matrix should be reviewed regularly.
Apply
Think of five products or services that your organisation procures and plot them on the Kraljic matrix. Consider whether your current strategy for procuring these items fits their position in the quadrant.
Remember
The Supplier Preferencing matrix looks at how the supplier views the relationship with a buyer.
Remember
page 29
The supplier and the buyer may not always have the same view of the relationship. This could lead to potential risks for the buyer, especially if the supplier views it as a nuisance or exploitable.
What are the four quadrants of the supplier prefrencing matrix, can you draw the matrix
Development
Core
Nuisance
Exploitable
Remember
The market management matrix combines the kraljic matrix and the supplier prefrencing matrix
Strategic & Core
Development & leverage
bottleneck & exploitable
nuisance & routine.
Remember
The insights provided matrixes should be used to develop supplier relationship management action plans
remember
Porter five forces model is made up of the rivalry in the marketplace, the threat of subs, barriers to entry and the relative power of buyers and suppliers
In what cicumstances is buyer poweer likely to be high
remember
Steepled analysis looks at risks that are external to company
remember
Steepled analysis covers the following areas: social, technological, economic, political, legal, ethical and demo