Basic supplier strategies
Four basic supplier strategies
For each segment in the model there are different approaches possible:



Performance Based Partnership: Strategic along with leverage products constitute 80 % Of total revenue. Small changes in price have a direct impact on the final price and shall closely monitored. Meanwhile, supply risk high. Strategies Strategic Products pursuing long-term relationships and partnerships. Systems with transparent calculation is preferable. Efficient Program developed together with providers to achieve cost reduction, quality improvements, process improvements and flexible product development. It requires a careful choice of supplier, the market should be scanned by following the best suppliers.

Competitive bidding: For leveraged products. When suppliers and products are interchangeable as long-term contracts are rare. Companies want to buy at the lowest price, yet ensure product quality and a steady and safe production. Small savings resulting of big money in the end. It entitles an active scan of the market for new potential suppliers.

Secure continuity of supply: Policy bottleneck products where the focus is on securing supplies, if necessary, at an additional cost. While the company wants to be less dependent on its suppliers and is developing alternative products and suppliers. The cost of it shall not exceed the savings achieved. Risk analysis to identify the main bottlenecks product is performed, in a short-, medium-, and long-term perspective. Along there is uncertainty plans until there are concrete actions for the most common problem areas, and to investigate alternative routes or explore product options.

Department Management and e-sourcing solutions: Routine Products requires a strategy aimed at reducing administrative and logistical complexity. Buyer prepares simple but effective plans for order and management of supplier electronic catalogs, which buyer can order directly from a default supplier. Relevant aspects: to standardize product (article directory), reduce the number of suppliers and so on.