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.