| Planning Contracting Administration Logistics Management Development Implementation |
Leverage all volume and suppliers
| Traditional | Best Practice |
| Units purchase for their own needs only
Units do not involve "rest of company" volume in negotiations Focus is on commodities, supplier cross-commodity volume not leveraged |
All company volume known and used for negotiations Supplier-based consolidated to build critical mass
Total purchases from supplier and affiliates known and leveraged in cross-commodity negotiations Creative strategies to increase leverage used (e.g., buying groups, sharing supplier contacts with other suppliers) |
| Rationale | |
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| Details | |
| The following numbers can be used as benchmarks:
90 percent of company-wide volume represented at negotiations One to three suppliers per commodity 5 percent of suppliers account for 90 percent of purchases |
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Best Practice | Case Study | Commentary
April 7, 2000
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