Strategic Suppliers Business Impact High Low Manage Supply Bottleneck Strategic Routine Leverage Action Plan  Consider long-term contracts or service-life agreements  Work closely with suppliers in product innovation and process  Joint product/process design and planning  Integrated systems  Supplier manages product/service  Consider on-site representation  Contingency planning  Consider long-term contracts or service-life agreements  Work closely with suppliers in product innovation and process  Joint product/process design and planning  Integrated systems  Supplier manages product/service  Consider on-site representation  Contingency planning e.g. typically most direct commodities fall into this category Strategic relationships must be partnerships with mutual benefits Difficult Supply Market Opportunity Easy The recommended approach for Strategic suppliers is to actively manage the relationship Difficult High Low Easy

Bottleneck Suppliers Action Plan  Long-term contracts  Ensure supplier is motivated to provide quality service  Look at developing new suppliers  Consider buffer stocks for additional security  Measure supplier performance to identify potential interruptions to supply  Move to generic specifications where appropriate  Manage the entire Supply Chain  Long-term contracts  Ensure supplier is motivated to provide quality service  Look at developing new suppliers  Consider buffer stocks for additional security  Measure supplier performance to identify potential interruptions to supply  Move to generic specifications where appropriate  Manage the entire Supply Chain High Difficult Ensure Supply Bottleneck Strategic Routine Leverage Supply Market Opportunity Business Impact e.g. complex specification products Bottleneck suppliers should ultimately be transitioned into another quadrant The recommended approach for Bottleneck suppliers is to ensure supply of critical items High Low Easy

Leverage Suppliers Action Plan  Short-term contracts  Focus on price  Pursue a very active sourcing policy  Look for continued cost-reduction  Reduce stockholding  Consider the use of eAuctions  Pursue value add services from supplier which reduce total cost  Manage transportation costs separately  Short-term contracts  Focus on price  Pursue a very active sourcing policy  Look for continued cost-reduction  Reduce stockholding  Consider the use of eAuctions  Pursue value add services from supplier which reduce total cost  Manage transportation costs separately High Low Easy Difficult Reduce Total Cost Bottleneck Strategic Routine Leverage Supply Market Opportunity Business Impact e.g. commodities… Leverage relationships are built solely around price The recommended approach for Leverage suppliers is to cut cost using innovation and competition

Routine Suppliers Action Plan  Mid-term contracts  Utilise supplier own specifications  Offer supplier incentives to substitute  Reduce inventory – supplier managed  Relationship owned by budget holder/end-user  Simple performance measurement process with focus on reliability  Monitor internal time spent resolving problems  Mid-term contracts  Utilise supplier own specifications  Offer supplier incentives to substitute  Reduce inventory – supplier managed  Relationship owned by budget holder/end-user  Simple performance measurement process with focus on reliability  Monitor internal time spent resolving problems High LowEasy Difficult Minimise Effort Bottleneck Strategic Routine Leverage Supply Market Opportunity e.g. Office Supplies, Desktops, Laptops etc. Routine relationships should take up minimal time and effort The recommended approach for Routine suppliers is to minimise management attention and investment Business Impact