This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
This product (Purchasing Chessboard) is a 24-slide PPT PowerPoint presentation slide deck (PPT), which you can download immediately upon purchase.
The procurement strategies at many organizations lack the flexibility to adapt to radical changes occurring today. Gone are the days when organizations could have managed supply markets using relatively simple tools and techniques—e.g. RFIs, RFPs, bundled products and services, and multi-year contracts etc. Markets, nowadays, are disparate and expect vastly different methods to operate.
To endure the procurement challenges of this age, the Purchasing Chessboard is a broad framework, developed by A.T. Kearney, to address almost any supply and demand market condition. The Purchasing Chessboard is a compilation of insights and experience from thousands of purchasing projects performed worldwide.
This slide deck provides a detailed description of the 4 purchasing strategies under the Purchasing Chessboard and a high-level view of the framework’s implementation. The 4 critical purchasing strategies include:
1. Leverage competition among suppliers
2. Seek joint advantage with suppliers
3. Change the nature of demand
4. Manage spend
Within the Purchasing Chessboard framework, we further break down the 4 purchasing strategies into 16 levers and further into 64 methods. All the 64 standalone methods in the Purchasing Chessboard present a unique differentiating tactic to work with suppliers to reduce costs and increase value. Each method maps to a specific lever, which maps to a specific strategy.
The presentation deck also includes some slide templates for you to use in your own business presentations.
This comprehensive presentation also delves into the practical implementation of the Purchasing Chessboard, offering a 5-step approach to effectively categorize and apply strategies. It emphasizes the importance of cross-functional team involvement and continuous strategy adjustment to align with market dynamics. The PPT includes detailed templates to facilitate your own procurement strategy development and execution, ensuring you have the tools needed to drive cost reduction and value creation in your supply chain operations.
This PPT slide outlines a structured five-step implementation process for the Purchasing Chessboard, a strategic tool designed to enhance purchasing effectiveness. Each step is clearly delineated, emphasizing a methodical approach to applying this framework.
The first step involves placing specific categories, which likely refers to identifying and defining the various purchasing categories relevant to the organization. This foundational action sets the stage for the subsequent steps, ensuring that the right areas of focus are established.
Next, the slide suggests applying pertinent purchasing strategies to these categories. This indicates a tailored approach where strategies are not one-size-fits-all, but rather customized based on the unique characteristics of each category. This step is crucial for aligning purchasing actions with broader organizational goals.
The third step focuses on reviewing the competencies of the purchasing function. This suggests a reflective process where the organization assesses its current capabilities and identifies gaps that need to be addressed. Understanding these competencies is vital for effective category management.
The fourth step highlights the importance of involving the right cross-functional team members. This collaboration is essential for leveraging diverse perspectives and expertise, which can lead to more informed decision-making and strategy development.
Finally, the slide emphasizes the need to update categories on the Purchasing Chessboard and adjust strategies accordingly. This iterative process ensures that the purchasing strategies remain relevant and effective in a changing environment. Overall, this structured approach provides a clear roadmap for organizations looking to optimize their purchasing strategies.
This PPT slide presents a comprehensive framework known as the Purchasing Chessboard, which integrates 3 critical layers: strategies, levers, and methods. The top layer outlines 4 primary purchasing strategies aimed at optimizing procurement processes. These strategies include changing the nature of demand, managing spend, seeking joint advantages with suppliers, and leveraging competition among suppliers. Each strategy serves as a guiding principle for the subsequent layers.
The second layer consists of 16 levers that operationalize these strategies. For instance, under the strategy of managing spend, levers such as innovation breakthrough, risk management, and demand management are highlighted. These levers represent specific areas where organizations can focus their efforts to enhance procurement effectiveness.
The third layer dives deeper into execution, showcasing 64 methods that can be employed to implement the identified levers. This granular approach allows organizations to select tailored methods based on their unique circumstances. For example, methods under risk management include cost analysis and compliance management, while those under demand management feature techniques like volume bundling and sourcing commitments.
The visual structure of the slide effectively illustrates the hierarchical relationship between strategies, levers, and methods, enabling executives to grasp how various components interconnect. This framework not only aids in strategic planning, but also serves as a practical guide for procurement teams to drive value through informed decision-making. Understanding this framework can empower organizations to refine their procurement strategies and enhance overall operational efficiency.
This PPT slide presents the "Purchasing Chessboard," a framework designed to enhance procurement strategies through 16 specific levers derived from 4 core purchasing strategies. At the top, the slide outlines these 4 strategies: "Change nature of demand," "Manage spend," "Seek joint advantage with supplier," and "Leverage competition among suppliers." Each strategy serves as a foundation for the levers that follow, which are categorized under them.
Under "Manage spend," several levers are highlighted, including "Innovation breakthrough," "Risk management," and "Demand management." These levers focus on optimizing expenditure and ensuring that resources are allocated effectively. For instance, "Innovation breakthrough" suggests that organizations should explore new methods or technologies to improve procurement processes.
The second strategy, "Seek joint advantage with supplier," emphasizes collaboration with suppliers to create mutual benefits. This includes levers like "Value chain management" and "Cost partnership," which aim to foster deeper partnerships that can lead to improved efficiencies and cost savings.
The third strategy, "Leverage competition among suppliers," is crucial for driving down costs and enhancing service levels. Levers such as "Tendering" and "Supplier pricing review" indicate a focus on competitive bidding and regular assessments of supplier pricing to ensure value.
Overall, the Purchasing Chessboard framework provides a structured approach for procurement professionals to navigate complex purchasing decisions. It emphasizes the importance of strategic thinking and collaboration in achieving procurement goals. This slide serves as a valuable resource for organizations looking to refine their purchasing strategies and drive operational efficiencies.
This PPT slide presents a strategic framework titled "Purchasing Chessboard," focusing on the dynamics between buyers and suppliers when both parties hold equal market power. It emphasizes that merely having equal power is insufficient for achieving sustainable cost or value benefits. The primary objective is to foster collaborative partnerships that enhance the entire value chain through joint management and integrated operations planning.
Four key procurement levers are outlined: Value Chain Management, Value Chain Partnership, Integrated Operations Planning, and Cost Partnership. Each lever is associated with specific methods that can be employed to drive efficiency and effectiveness in supplier relationships. For instance, under Value Chain Management, methods such as Value Chain Reconfiguration and Supplier Tiering are highlighted, indicating a focus on optimizing the supply chain structure and supplier roles.
Value Chain Partnership includes approaches like Profit Sharing and Strategic Alliance, suggesting that mutual benefits can be derived from deeper collaboration. Integrated Operations Planning and Cost Partnership further elaborate on how companies can align their operational strategies and cost structures with suppliers to create synergy.
The slide concludes with a call to action for suppliers and buyers to build joint partnerships. This collaboration aims to generate innovative ideas for cost optimization and shared benefits, ultimately leading to long-term strategic alliances. The insights provided here are crucial for organizations looking to enhance their procurement strategies and drive value through effective supplier engagement. Understanding these frameworks can help in making informed decisions about supplier relationships and operational efficiencies.
This PPT slide presents a framework for "Smart Spend Management," emphasizing its importance within the strategic procurement function. It highlights that this approach is particularly beneficial in low-demand, low-supply markets, which are common in indirect material categories like maintenance, repair, and operations. The focus is on leveraging 4 key procurement levers: Co-sourcing, Demand Management, Commercial Data Mining, and Volume Bundling.
Each lever is associated with specific methods aimed at optimizing procurement strategies. For instance, Co-sourcing involves collaboration with suppliers and stakeholders to enhance sourcing effectiveness. Demand Management emphasizes controlling and reducing demand through various techniques, including compliance and contract management. Commercial Data Mining focuses on extracting insights from procurement data to inform decision-making, while Volume Bundling seeks to consolidate purchases across different categories or suppliers to achieve better pricing and terms.
The slide outlines 16 associated methods under these 4 levers, providing a comprehensive view of actionable strategies. These methods include Compliance Management, Closed Loop Spend Management, and Supplier Consolidation, among others. The emphasis on data-driven approaches, such as Cost Data Mining and Spend Transparency, indicates a shift towards more informed and strategic procurement practices.
Overall, this slide serves as a guide for organizations looking to enhance their procurement capabilities. It underscores the need for a structured approach to managing spend effectively, ultimately aiming to reduce costs while increasing value. The framework is designed to help executives understand how to navigate the complexities of procurement in challenging market conditions.
This PPT slide presents a framework known as the Purchasing Chessboard, which outlines 64 distinct methods aimed at enhancing procurement strategies. The methods are categorized based on their effectiveness in reducing costs and increasing value, arranged in a grid format that reflects varying levels of supply power and demand power.
The vertical axis represents supply power, ranging from low to high, while the horizontal axis indicates demand power, also spanning low to high. Each method is strategically placed within this matrix, allowing for a visual assessment of its potential impact based on the interplay between supply and demand dynamics.
At the high supply power and high demand power intersection, methods like "Invent on demand" and "Leverage innovation network" are highlighted. These methods suggest a proactive approach to sourcing, emphasizing innovation and collaboration with suppliers. Conversely, in the lower sections of the grid, methods such as "Demand reduction" and "Contract management" focus on more traditional, reactive strategies.
The slide also emphasizes the versatility of these methods, indicating they can be applied individually or in combination, offering flexibility in approach. This adaptability is critical for organizations looking to tailor their procurement strategies to specific market conditions and supplier relationships.
Overall, the Purchasing Chessboard serves as a comprehensive guide for executives seeking to optimize procurement processes. It provides a structured way to evaluate and implement various strategies that can lead to significant cost savings and enhanced supplier collaboration.
This framework is developed by a team of former McKinsey and Big 4 consultants. The presentation follows the headline-body-bumper slide format used by global consulting firms.
For $10.00 more, you can download this document plus 2 more FlevyPro documents. That's just $13 each.
ABOUT FLEVYPRO
This document is part of the FlevyPro Library, a curated knowledge base of documents for our FlevyPro subscribers.
FlevyPro is a subscription service for on-demand business frameworks and analysis tools. FlevyPro subscribers receive access to an exclusive library of curated business documents—business framework primers, presentation templates, Lean Six Sigma tools, and more—among other exclusive benefits.
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.
Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
Read Customer Testimonials
"As a consulting firm, we had been creating subject matter training materials for our people and found the excellent materials on Flevy, which saved us 100's of hours of re-creating what already exists on the Flevy materials we purchased."
– Michael Evans, Managing Director at Newport LLC
"As a young consulting firm, requests for input from clients vary and it's sometimes impossible to provide expert solutions across a broad spectrum of requirements. That was before I discovered Flevy.com.
Through subscription to this invaluable site of a plethora of topics that are key and crucial to consulting, I
have been able to exceed expectations and deliver quality advice and solutions to my clients. The quality and expertise of the authors are exemplary and gives me great confidence to use as part of my service offerings.
I highly recommend this company for any consultant wanting to apply international best practice standards in their service offerings.
"
– Nishi Singh, Strategist and MD at NSP Consultants
"As an Independent Management Consultant, I find Flevy to add great value as a source of best practices, templates and information on new trends. Flevy has matured and the quality and quantity of the library is excellent. Lastly the price charged is reasonable, creating a win-win value for
the customer, Flevy and the various authors. This is truly a service that benefits the consulting industry and associated clients. Thanks for providing this service.
"
– Jim Schoen, Principal at FRC Group
"FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients. In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over! The
quality of the decks available allows me to punch way above my weight – it's like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.
"
– Roderick Cameron, Founding Partner at SGFE Ltd
"If you are looking for great resources to save time with your business presentations, Flevy is truly a value-added resource. Flevy has done all the work for you and we will continue to utilize Flevy as a source to extract up-to-date information and data for our virtual and onsite presentations!"
– Debbi Saffo, President at The NiKhar Group
"The wide selection of frameworks is very useful to me as an independent consultant. In fact, it rivals what I had at my disposal at Big 4 Consulting firms in terms of efficacy and organization."
– Julia T., Consulting Firm Owner (Former Manager at Deloitte and Capgemini)
"As a small business owner, the resource material available from FlevyPro has proven to be invaluable. The ability to search for material on demand based our project events and client requirements was great for me and proved very beneficial to my clients. Importantly, being able to easily edit and tailor
the material for specific purposes helped us to make presentations, knowledge sharing, and toolkit development, which formed part of the overall program collateral. While FlevyPro contains resource material that any consultancy, project or delivery firm must have, it is an essential part of a small firm or independent consultant's toolbox.
"
– Michael Duff, Managing Director at Change Strategy (UK)
"I am extremely grateful for the proactiveness and eagerness to help and I would gladly recommend the Flevy team if you are looking for data and toolkits to help you work through business solutions."
Receive our FREE presentation on Operational Excellence
This 50-slide presentation provides a high-level introduction to the 4 Building Blocks of Operational Excellence. Achieving OpEx requires the implementation of a Business Execution System that integrates these 4 building blocks.
Click main image to view in full screen.
