CASE 1

(2 marks each = 10 marks)

One of the strategic functions of the company buyer is to define the commodity groups and supplier strategy. Once internal company requirements and external market conditions have been brought together, the Purchasing department will review the strategic importance of the individual commodity groups using the portfolio technique as shown below;

Requirement:

a) Using a company of your choice as a case study (preferably a manufacturing company), identify all the commodities acquired for production and administration and group them into the above commodity groupings. (4 marks)

b) Critically examine the procurement strategy you will adopt for each commodity group. (4 marks each = 16 marks)

c) Describe the procurement strategy adopted by your chosen case study and review the strategy on the basis of the following business indicators: Savings, Number of Suppliers, Cost Avoidance, Delivery Reliability and Quality of Delivery. (Total marks = 30)