Notesale: Turn your study into money

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The 4 categories of items
Routine

Leverage

Critical
Bottleneck
ITC

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2-1

Routine Items
What are they?
Many suppliers & the item is readily available
Standard item
Your annual expenditure on the item is low
The item is low risk to your company
Your expenditure only represents a small part of the
supplier’s turnover
ITC

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3-1

Routine Items
Using many different suppliers for routine items means
unnecessary high efforts and costs
Try to use one single “preferred supplier”
Try to have long-term, call-off or “evergreen” contract
which covers as many items as possible
You can link prices to an index or use cost-reduction
clauses

ITC

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3-1

Routine purchases

Purchased
item

ITC

Current
number of
suppliers

Current
contractual
basis

Is the approach satisfactory? If
not, what would you propose, and
why?

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4-1

Generic Operational Strategies
for Routine Items
Process re-engineering - simplifying your
procurement processes
Process automation - use of computers and special
software
Eliminate inspection
Delegation of call-off responsibility to end users
Use of purchasing cards
E-commerce
ITC

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4-1

Generic operational strategies
What operational strategies do you use for your routine items?

Which could you use?

ITC

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A
...
4-4

Which operational strategy to use?
Operational strategies for routine items
Strategy
Holding
inventory

Supply targets
typically
affected
Availability

Circumstances when appropriate
 Requirements must be satisfied immediately
...

 Stock holding costs are less than the cost of setting
up an alternative supply source)
...


E-commerce

Cost of
acquisition

 A small number of users have a high number of
transactions with a particular supplier
...


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4-2

Specific operational strategies for routine items
Specific
operational
strategy

Routine products or
services:

Issues involved in applying the strategy:

Holding
inventory
Consolidated
billing

Currently using
the strategy

E-commerce

Would benefit
from the
strategy

Customer
account
manager

ITC

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5-1

Buyer Characteristics

Good understanding for how processes work
and how they can be simplified
Junior level may be sufficient
More senior buyers need to be involved in the
setting up of call-off contracts

ITC

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6-1



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