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By Edward Winter

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Instead of negotiating on the level of individual sourcing categories (for which the company has little demand power), all purchases from the same supplier are negotiated together. B4 Buying consortia: Buying consortia are loose cooperations of firms aimed at obtaining advantages on the sourcing market. e. until the end of the respective project). 17 18 2 From four basic strategies to 64 methods Volume bundling Volume bundling is one of the traditional purchasing approaches, whereby savings are achieved through realization of benefits from economies of scale on supplier’s side.

These approaches and their underlying methods are briefly described below. 2 From four basic strategies to 64 methods Globalization Globalization opens up possibilities not just on the selling side, but especially on the purchasing side. With the opening of markets in Eastern Europe, China and India, over a billion additional workers have become available globally; workers whose low factor costs are being increasingly paired with the highest levels of skill. However, utilizing the globalization lever means taking advantage not just of low-cost countries, but of the worldwide supplier market as well.

G. by a rapidly growing industry. Important methods applicable here were complexity reduction and process benchmark. 3 Using the Purchasing ChessboardTM ƒ Tires: As with engines, tires were characterized by bottlenecks, since the suppliers were so stretched that they were reluctant to produce the special types needed for construction equipment and, to some extent, farm machinery. There were even instances where finished units left the assembly lines without tires. It was therefore of crucial importance to conclude agreements with the tire manufacturers to produce the quantities needed if the construction equipment manufacturer was to grow.

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