Buying and selling in a complex world - Toolkit

7 important questions on Buying and selling in a complex world - Toolkit

Which 3 tools are in the procurement toolkit?

- Kraljic Portfolio matrix (Non-critical, leverage, bottleneck and strategic products)

- Day one analysis

- PEST analysis.

What is the day one analysis?

- An analytical tool that gives a quick insight into the opportunities for spend in a business.
- Tool to consider what areas of spend or products you are planning to negotiate
- Helps buyers understand their negotiating stance and also helps determine the type of negotiation that could maximise outcomes
-> Gain an understanding of the market from the supplier’s and the customer's point of view.

How does the day one analysis work?

You make a graph with products you are planning on negotiating. You compare the number of suppliers for the product with the number of customers. (Generic, tailored, custom and proprietary)
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What are the generic products in a day one analysis?

- a lot of supplier and a lot of customers
- The power lies with the buyer
- No need for an ongoing relationship with the supplier
- Supplier wants to beat competition.

What are the tailored products in a day one analysis?

- Prodcuts that are made uniquely for the org.
- Many suppliers, one buyer
- Suppliers are awara of specific requirements buyer
- Value creation negotiaton approach

What is a custom product in a day one analysis?

- Custom made for a buyer by just one supplier
- buyers will need a strong, collaborative and long-term relationship with the
supplier
- Value creation approach

What is a proprietary product in a day one analysis?

- One supplier, many buyers
- Supplier does not need a relationship with buyer
- Gives suppliers the power and control

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