Sourcing Process Effectively and Efficiently

A major objective for the sourcing organization is to operate effectively. This may range from being highly efficient to being extremely flexible, or somewhere in between. Depending on what is 

How can the purchase portfolio matrix be used First, segment purchased goods and services into one of the four quadrants. Once the purchases are segmented, develop the appropriate purchasing strategies, policies, processes, and relationships. 

Strategic and bottleneck items Unique products and service designs, few suppliers. 

Strategic items Develop supplier relationships and partnerships, switching suppliers is difficult, increase role of selected supplier, strive for effectiveness, supply continuity, and technical expertise is more important than price, prepare contingency plans, and requires a great deal of negotiation. 

Bottleneck items Ensure supply continuity, continuity is more important than price, design alternate materials or parts, reduce dependence on these items through diversification, seek substitute parts, strive for effectiveness, and strive to move to non-critical or leverage quadrants. 

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