Seek joint advantage with supplier

We finalize the consideration of the different sourcing strategies which are based on features of supply and demand power according to A.T.Kearney approaches in this article. And today we will analyze the fourth strategy. Where there is both high supply power and high demand power, the  basic strategy aims at searching jointly with the supplier for advantages. The different variants of this basic strategy depend on the scope and intensity of the partnership. The scope can range from coordinated demand and capacity planning to complete intermeshing of the value chain. Meanwhile, the intensity can range from project based sharing of costs to the sharing of financial success and risk.

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Leverage competition among suppliers

Dear procurement professionals, 

today we will consider the third sourcing strategy in situation where high demand power exists. So the third basic strategy is to leverage competition among suppliers to the advantage of the company. Variations of this strategy are further fueling competition through appropriate measures on the supplier market, or influencing supplier pricing through analytical tools. 

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Manage of spend

Dear procurement professionals, 

We are starting to consider the best practices of determining sourcing strategies based on Purchasing chessboard of A.T.Kearney in this article

In the case of low supply and demand power, the first basic strategy involves professional steering of demand. Manage spend first of all requires detailed knowledge of who is buying what from which supplier. Based on this, one can then consider the possibility of offsetting low demand power by bundling demand, either within the company or across company boundaries. These considerations should be backed by an uncompromising analysis of whether the demand in question is actually justified. The approaches for cutting costs and adding value within this basic strategy are demand management, co-sourcing, volume bundling and commercial data mining. These approaches and their underlying methods are briefly described below.

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