ABSTRACT
The horizontal axis is about spend with the supplier. Leverage and partnership are obviously areas of high spend. Secure and one-stop are low spend. Low-value parts and services represent a disproportionally high part of our bureaucratic workload. This can be a major cost. Alternative supply chain processes must deliver these purchases with much lower administrative burden and yet provide high levels of financial control, quality, and service. A large proportion of low-cost purchases are frequent and of commonly available commodities. Buy houses are arrangements that effectively outsource the purchasing function. Buy houses will make purchases for a business and apply a markup. Mixed with the large number of low-spend commodity suppliers are some which, although low spend, provide services or parts that are critical to operations. It is important to categorize commodities and suppliers as the basis of supply base development.
