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 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 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 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.
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