The Purchasing Chessboard

The "golden" age of purchasing, in which it was relatively easy to achieve annual cost reductions of between one and three percent, has come to an end. The major reasons for this are the consolidation in many supplier markets, rising energy costs, and growing resource consumption in many emerging markets such as China.

To support companies that need to master the challenges in purchasing and achieve significant value propositions, the authors have developed the Purchasing ChessboardTM. The Purchasing ChessboardTM provides a suitable purchasing strategy for every constellation of buying power and selling power.

The Purchasing ChessboardTM has been tested extensively. It has also been applied in practice by clients in Australia, Austria, China, the Czech Republic, Finland, France, Germany, Italy, Russia, Slovenia, Spain, the UK, Ukraine and the US. The relevant sectors included automotive manufacturing and supply, military equipment (tanks), construction equipment, packaging, steel, transport, foodstuffs, pharmaceuticals, energy utilities, telecommunications and banking.

In a recent purchasing survey accomplished by A.T. Kearney, many CEOs complained that their companies were not prepared for mastering the challenges of the seller’s market. To support companies coping with the new challenges of the seller’s market A.T. Kearney has developed the Purchasing ChessboardTM. This tool relies on the huge amount of experience and insights from over 500 purchasing projects A.T. Kearney successfully accomplished world-wide over the last three years, i.e. more than thousand projects in the last three decades. In the past three years, more than 500 billion Euros have been placed in the market by these 500 projects. The Purchasing ChessboardTM is based on 64 fields, each representing a stand-alone, differentiating approach to reduce costs and increase value with suppliers. These specific approaches are derived from a total of 16 levers and four basic purchasing strategies. The latter provide an answer for each market constellation between suppliers and purchasing and for each relationship between the demand and supply side.