Session 7

Question 1

Kraljik matrix

Answer 1

Matrix to understand and quantify relative value and procurement risk issues for any business or organisation
Four different Risk/value - description - strategy:
- High/High: Strategic: Work strategically and collaborate. High interdependency
- High/low: Bottleneck: Design bottleneck out of portfolio or ensure appropriate relationship
- Low/high: Tactical: increase sources and maintain competition between suppliers
- Low/low: Leverage:

Question 2

Procurement

Answer 2

Procurement includes sourcing and purchasing and covers all of the activities from identifying potential suppliers through to delivery from supplier to the customer

Question 3

Buyer’s motivation

Answer 3

• Wants the lowest price?
• Increase scope?
• Buyer power?
• Best service?
• Wants to limit risk?

Question 4

Seller’s motivation

Answer 4

• Wants the highest price?
• Decrease scope?
• Supplier power?
• Fit for purpose?
• Limit liabilities?

Question 5

Procurement process

Answer 5

• Specify: Requirements of contract
• Identify: Identify suitbale suppliers
• Select: Select the suitable supplier
• Manage: Manage contract to ensure key deliverables are fully met