Table 1 lists some examples of criteria you might

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with a supplier. Table 1 lists some examples of criteria you might consider for selecting suppliers. Do not discard any suppliers at this stage. Even if they are smaller or newer suppliers with whom you may not be familiar, they may offer more favorable contract terms than some of the larger information providers, particularly if you are a small information department and have a limited budget. Step 4: Select the implementation path The purpose of Step 4 is to decide the most appropriate execution strategy for choosing your short-listed suppliers. Request for proposal. The traditional route taken by many procurement departments is to conduct a Request for Proposal. In the RFP the buyer states his requirements and asks suppliers to set forth the specifics of their proposed offer including pricing. Requiring the vendors to complete a stan- dard pricing matrix will allow you to compare their offers on Figure 5. Category positioning matrix Bottleneck Characteristics No true substitutes; usually single source Not core to business Lack of availability will cause problems Approach Search for alternatives Strengthen relationships Non-Critical Characteristics Low expenditure levels Small % of expenses Not key to core business; commodity Approach Simplify and streamline purchasing process Reduce number of suppliers and simplify ordering Strategic Characteristics No true substitutes; usually single source High-product differentiation Key to core business Approach Ensure availability of supply Focus on relationship building, process integration and innovation Leverage Characteristics Competitive market High expenditure levels Commodity type items Approach Use competitive marketplace to reduce total cost Consolidate volume as a negotiation tool Low High Supply Market Complexity Low High Business Impact © 2001 A.T. Kearney Figure 6. Sourcing strategies Exercise Power Create Advantage The Strategic Sourcing Gemstone Best-Price Evaluation Joint Process Improvement Volume Concentration Product Specification Improvement Relationship Restructuring Global Sourcing Conduct product value analysis Optimize life cycle costs Rationalize / standardize specs. Substitute materials Reengineer joint processes Support supplier operations improvement Share productivity gains Develop integrated supply chain Establish/develop key suppliers Employ strategic alliances/partnering Examine strategic “make versus buy” Expand geographic supply base Develop new suppliers Exploit global supply/demand imbalances Compare “total” costs Model “should-costs” Renegotiate prices Unbundle pricing Hold an online auction Consolidate number of suppliers Aggregate volume across units Redistribute volume among suppliers © 2001 A.T. Kearney
38 | information outlook |December 2005 | vol. 9, no. 12 Sourcing an equal basis. One way to do this is to ask for pricing on

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