Shaping the Supply Strategy
To minimize their supply vulnerabilities and make
the most of their potential buying power, a number
of European companies have successfully used a fourstage
approach to devise strategies. The approach has
given them a simple but effective framework for collecting
marketing and corporate data, forecasting
future supply scenarios, and identifying available purchasing
options as well as for developing individual
supply strategies for critical items and materials.
Following this approach, the company first classifies
all its purchased materials or components in
terms of profit impact and supply risk. Next it analyzes
the supply market for these materials. Then it
determines its overall strategic supply position. Finally,
it develops materials strategies and action plans.