1. Supply Market Opportunity
Action Plan
Strategic Suppliers
The recommended approach for Strategic suppliers is to actively manage the relationship
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
Leverage
Strategic
High
High
Manage Supply
Routine
Bottleneck
Business Impact
Easy
Difficult
Low
Easy
Supply Market Opportunity
Difficult
Low
e.g. typically most direct commodities fall into this category
Strategic relationships must be partnerships with mutual benefits
Reference: PCD75-A Released: 03/02/2015

2. Supply Market Opportunity
Action Plan
Bottleneck Suppliers
The recommended approach for Bottleneck suppliers is to ensure supply of critical items
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
Leverage
Strategic
High
Routine
Bottleneck
Business Impact
Ensure Supply
Easy
Difficult
Low
Supply Market Opportunity
e.g. complex specification products
Bottleneck suppliers should ultimately be transitioned into another quadrant

3. Leverage Suppliers Action Plan
The recommended approach for Leverage suppliers is to cut cost using innovation and competition
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
Leverage
Strategic
Reduce Total Cost
Business Impact
Routine
Bottleneck
Easy
Difficult
Low
Supply Market Opportunity
e.g. commodities…
Leverage relationships are built solely around price

4. Routine Suppliers Action Plan
The recommended approach for Routine suppliers is to minimise management attention and investment
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
Leverage
Strategic
High
Business Impact
Routine
Bottleneck
Minimise Effort
Low
Easy
Difficult
Supply Market Opportunity
e.g. Office Supplies, Desktops, Laptops etc.
Routine relationships should take up minimal time and effort