Physical asset specificity (location, Low Low Medium Medium to High Medium to High High machinery, processes)1,5 Skill level needed for predominant Unskilled Semi-skilled Skilled Professional Professional Expert personnel4,5 of supplier Integration/interface required (systems, support processes) None Low Medium High Very High Critical 4,54 Availability Overall availability of service/product in Moderate Limited number of Limited number of Widely Available Widely Available Scarcely Available marketplace4.5 Availability capable suppliers capable suppliers Availability of qualified and skilled High High Medium Low Low Low personnel 4 Availability of required technology4 Universal Limited Restricted Restricted to Scarce Scarce Unique Access to Buyer’s systems and critical None Low Medium High Very High Critical processes4 STRATEGIC IMPACT Product or service is a core Possible Strategic Core competency or strategic differentiator No No No Strategic Differentiator Differentiator Competency for Buyer3 DEGREE OF RISK TOLERANCE,4,5 Profit Impact from the buyer’s perspective (volume purchased, % of None Low Medium High Very High Critical total purchased costs, impact on business growth)5 Service or product delivery failure impact on end customer/brand None Low Medium High Very High Critical experience4,5 Service or product delivery failure impact on internal customer None Low Medium High Very High Critical experience4,5 Meet Standard Meet Standard Meet Standard Meet Standard Regulatory compliance policy Meet Standard Meet Standard or Higher or Higher or Higher or Higher Uncertainty of demand1.5 Contractual flexibility Capacity is set based on Manage unanticipated Provider response to Contractual ability for for Supplier and captive assets + using demand spikes with unanticipated volume supplier to respond to Buyer to respond to N/A market if not asset multiple sources spikes limited spikes spikes to optimize the specific business
Physical asset specificity (location, machinery, processes)1,5 Low Low Medium Medium to High Medium to High High Skill level needed for predominant personnel4,5 Unskilled Semi-skilled Skilled Professional Professional Expert of supplier Integration/interface required (systems, support processes) 4,54 None Low Medium High Very High Critical Availability Overall availability of service/product in marketplace4.5 Widely Available Widely Available Moderate Availability Limited number of capable suppliers Limited number of capable suppliers Scarcely Available Availability of qualified and skilled personnel 4 High High Medium Low Low Low Availability of required technology4 Universal Limited Restricted Restricted to Scarce Scarce Unique Access to Buyer’s systems and critical processes4 None Low Medium High Very High Critical STRATEGIC IMPACT Product or service is a core competency or strategic differentiator for Buyer3 No No No Possible Strategic Differentiator Strategic Differentiator Core Competency DEGREE OF RISK TOLERANCE,4,5 Profit Impact from the buyer’s perspective (volume purchased, % of total purchased costs, impact on business growth)5 None Low Medium High Very High Critical Service or product delivery failure impact on end customer/brand experience4,5 None Low Medium High Very High Critical Service or product delivery failure impact on internal customer experience4,5 None Low Medium High Very High Critical Regulatory compliance policy Meet Standard Meet Standard Meet Standard or Higher Meet Standard or Higher Meet Standard or Higher Meet Standard or Higher Uncertainty of demand1.5 N/A Manage unanticipated demand spikes with multiple sources Provider response to unanticipated volume spikes limited Contractual ability for supplier to respond to spikes Contractual flexibility for Supplier and Buyer to respond to spikes to optimize the business Capacity is set based on captive assets + using market if not asset specific
Open-Source-Sourcing-BMM-Toolkit-May-10-2017.docx