Development of a categorization modelwith strategic actions for theSupplier Base Tail
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Strategic Sourcing has gained great importance over the last few decades and during this era researchers have presented several theories and methods within the area. For instance, Purchasing Portfolio Management including analyzing the purchasing portfolio and egmenting suppliers are common in order to find and direct suitable strategies towards different groups of suppliers with similar characteristics. Until now Strategic Sourcing has focused on handling the top 20 % of the suppliers, although an upcoming trend is to focus on the remaining 80 % of the suppliers. The phenomenon is called Tail Spend Management and the aim is to achieve lower administrative costs, lower prices and increased efficiency etc. To use traditional categorization models in order to manage this part of the supplier base (the Supplier Base Tail) is improper partly because the models focus on top suppliers. They also provide actions that are too costly and time consuming to use for managing Tail Spend. Further, the categorization criteria for traditional models do not correspond to the characteristics of Tail Spend. The purpose of the study is thus to develop a categorization model with corresponding strategic actions for the Supplier Base Tail. The model is based on traditional categorization frameworks. By a case study including qualitative interviews and quantitative data, causes to Tail Spend were found, which were linked to Tail Spend categories found in modern theories. The categories were fit into the categorization framework and corresponding strategic actions were also developed from the theoretical framework and complementary interviews. The study aims to contribute to theory by extending earlier research about Purchasing Portfolio Management in order to be applicable for Tail Spend. The empirical contribution lies in the developed categorization model that aims to manage the upplier Base Tail and address the causes to Tail Spend found in the unit under study.
Place, publisher, year, edition, pages
2014. , 95 p.
Strategic Sourcing, Purchasing Portfolio Management, Portfolio Management
Economics and Business
IdentifiersURN: urn:nbn:se:kth:diva-147803OAI: oai:DiVA.org:kth-147803DiVA: diva2:732267