Developing Supplier Strategies for ETO Companies: A Case Study

Abstract

The purpose of this paper is to present results of applying the Kraljic purchasing portfolio model at three Norwegian engineer-toorder (ETO) companies. The case companies operate in different markets, deliver products of different levels of complexity, and apply different organizational strategies, and differ in several other ways. The paper discusses the ways in which the case companies can develop their supplier strategies based on the executed Kraljic analysis, while emphasizing the importance of taking the companies' distinctive features into consideration..

A Systematic Approach to Implementing Multi-sourcing Strategy in Engineer-to-Order Production

“…Thus, all externally sourced materials and components used to make it were identified and categorised. As part of this process, product availability, the potential number of alternative suppliers, switching costs, competitive structure, and consequence of delay are assessed [19]. Each of these criteria must be evaluated by assigning a score to show its current state.…”

Application of Kraljic and stowage techniques to define purchasing strategies to reduce cost overruns in a food service company

“…Lever elements have a high economic impact and low supply risk and include strategically important expenses in a large market with many alternative suppliers. The buyer's domain is high in terms of relative power, since the purchasing power is actively used to obtain better deals with interchangeable suppliers [9].…”