High Procurement Time horizon Procurement Time horizon Focus Focus Varied, typically Up to 10 years; Leverage items 12-24 months Strategic Items governed by long term strategic impact (risk & contract mix) Key Items Key Items Purchased Performance Purchased Performance Scarce and/o high Criteria Criteria Mix of value materials Cost/price and commodities Long- term materials flow and specified availability management materials Typical Sources Supply Typical Sources Supply Multiple Abundant Established Natural scarcity suppliers, chiefly global suppliers Importance local of the item Procurement Time horizon Procurement Time horizon Focus Focus Limited, Variable, depending Non critical items normally 12 Bottleneck items on availability vs months or less short term flexibility trade offs Key Items Key Items Purchased Performance Purchased Performance Mainly specified Criteria Criteria Commodities, materials Functional some specified Cost efficiency materials management & reliable sourcing Typical Sources Supply Typical Sources Supply Established local Abundant Global, Product based suppliers predominantly scarcity Low new suppliers with new technology Kraljic Portfolio Purchasing Model (1983) By establishing the appropriate classification of strategic importance personnel will be in a position to identify the appropriate steps that must be taken and the required documentation procurement. The following sections provide additional guidance on items of high strategic importance/value and for low strategic importance/value items. The appropriate ‘budget will be advised should personnel preparing procurement documents be unsure as to holder’ what steps and documents are required in order to support the securing of the proposed goods or services.
High Procurement Focus Leverage items Time horizon Varied, typically 12-24 months Procurement Focus Strategic Items Time horizon Up to 10 years; governed by long term strategic impact (risk & contract mix) Importance of the item Key Performance Criteria Cost/price and materials flow management Items Purchased Mix of commodities and specified materials Key Performance Criteria Long- term availability Items Purchased Scarce and/o high value materials Typical Sources Multiple suppliers, chiefly local Supply Abundant Typical Sources Established global suppliers Supply Natural scarcity Procurement Focus Non critical items Time horizon Limited, normally 12 months or less Procurement Focus Bottleneck items Time horizon Variable, depending on availability vs short term flexibility trade offs Key Performance Criteria Functional efficiency Items Purchased Commodities, some specified materials Key Performance Criteria Cost management & reliable sourcing Items Purchased Mainly specified materials Low Typical Sources Established local suppliers Supply Abundant Typical Sources Global, predominantly new suppliers with new technology Supply Product based scarcity Kraljic Portfolio Purchasing Model (1983) By establishing the appropriate classification of strategic importance personnel will be in a position to identify the appropriate steps that must be taken and the required documentation procurement. The following sections provide additional guidance on items of high strategic importance/value and for low strategic importance/value items. The appropriate ‘budget holder’ will be advised should personnel preparing procurement documents be unsure as to what steps and documents are required in order to support the securing of the proposed goods or services.
procurement-guidelines-v8-doc.docx