What is supplier preference and why is it important?
Supplier preferencing can help us understand the supplier's perspective and potential attitude towards a review meeting (Figure 9.10).
What is the Kraljic model of supplier preferencing?
Peter Kraljic's focus is about profiling a category of expenditure, while supplier preferencing is about profiling a specific supplier's account-management style. Originated by Paul Steele and Brian Court in the mid-1990s, the model enables procurement functions to understand how a supplier might value its account with them.
What happens when you meet with a supplier?
Every time we meet with a supplier it is an opportunity to condition them around our future expectations and where boundaries might lie. Supplier review meetings may seem like just meetings to review progress and performance, however they are in fact also mini negotiations.
Are You in the center of the line between your customers and suppliers?
If anything, you are in the center of a line between your supplier and your customer. This means your relationship with the supplier needs to be as good as the relationship you have with your customer. After all, the supplier has its own perception of you as their customer.
What is a supplier preferencing model?
The supply preference model is a strategic procurement tool. It is also called supplier's preference model, meaning, assessing how suppliers view the company. The Supply Preference Model PowerPoint Template provides the 5-slide presentation to demonstrate attractiveness of company towards suppliers.
Who created the supplier preferencing model?
Supplier Preferencing was introduced as a concept in 1996 by Paul Steele and Brian Court. It seeks to create a simple framework to assess how a supplier might orientate themselves towards different customers. There are two dimensions: The relative value of the account.
What is a supplier Matrix?
The basic idea of a supplier segmentation matrix is the identification of all suppliers to be considered strategic or critical to the business. “Strategic supplier delivers a product or service which adds value to a business, and if they fail, it impacts the customers, infrastructure, and operations.”
What is supplier perception Matrix?
Supplier Perception Matrix Definition Each quadrant represents how a supplier would see you or any purchaser's relationship. This matrix is often better known as the supplier perception model or the supplier preference model.
What are the four 4 key quadrants in the Kraljic Matrix?
The Quadrants of the Kraljic Matrix The quadrant four quadrants are: Strategic Items, Leverage Items, Bottleneck Items and Non-Critical Items.
What is bottleneck in procurement?
A bottleneck occurs when there is not enough capacity to meet the demand or throughput for a product or service.
What are the types of suppliers?
Different Types of VendorsB2C (Business to Consumer) The B2C type of vendor sells directly to the consumer. ... B2G (Business to Government) The B2G type of vendor sells to the government. ... B2B (Business to Business) A B2B vendor is one that sells primarily to other vendors.
What are categories of suppliers?
ITIL describes four categories of suppliers:Strategic Suppliers. These are suppliers that provide goods and services that are a key aspect of the purchasing organization's overall delivery of services. ... Tactical Suppliers. ... Operational Suppliers. ... Commodity Suppliers.
What is supplier classification?
Supplier classification is the basis for a company's supplier portfolio development and risk management. An objective classification of suppliers helps to develop a comprehensive supplier portfolio. You can use the Supplier Classification Module for: Classifying the suppliers into different classes.
Why is Kraljic matrix used?
The Kraljic matrix is a method for classifying and analysing the purchasing portfolio in order to guide the procurement strategy of companies. It is a tool for managing item categories for a company in relation to the market.
What is supply positioning tool?
Supply positioning A useful tool to help this analysis is the supply positioning matrix. This assesses the business impact and risk in the delivery of the goods or services against relative costs.
How do you create a Kraljic Matrix?
The model involves four steps: Purchase classification. Market analysis. Strategic positioning....Let's explore each in more detail.Step 1: Purchase Classification. ... Step 2: Market Analysis. ... Step 3: Strategic Positioning. ... Step 4: Action Plans.
What is a purchasing matrix?
Figure 1 – Product Purchasing Classification Matrix Options include developing long-term supply relationships, analyzing and managing risks regularly, planning for contingencies, and considering making the item in-house rather than buying it, if appropriate.
What is Kraljic matrix used for?
The Kraljic matrix is a method for classifying and analysing the purchasing portfolio in order to guide the procurement strategy of companies. It is a tool for managing item categories for a company in relation to the market.
What is the purpose of supplier segmentation?
Supplier segmentation refers to the process of differentiating the supply base in terms of their impact on your organization and the risks they pose. In doing so, procurement professionals can determine how much engagement different suppliers require, and effectively allocate their limited resources.
How do you complete a vendor rating matrix?
0:273:33Factor Rating Matrix-Supplier Selection - YouTubeYouTubeStart of suggested clipEnd of suggested clipIn step one the company's operations the VP is made a list of seven criteria or factors sheMoreIn step one the company's operations the VP is made a list of seven criteria or factors she considers critical aside importance weight to each factor.
Using portfolio analysis and supplier preferencing to guide us
The supplier's attitude towards the review meeting they are being invited to attend will vary according to how they see us.
Every review is a mini negotiation!
Every time we meet with a supplier it is an opportunity to condition them around our future expectations and where boundaries might lie. Supplier review meetings may seem like just meetings to review progress and performance, however they are in fact also mini negotiations.
The power of good facilitation
A supplier review meeting, like any other meeting, will be ineffective if not managed. It is all too easy for a meeting with a supplier to become just another thing in an already busy day where there is insufficient time to prepare.
