Question:
A retail supply chain with a responsive and agile strategy carries the items listed in the Kraljic’s Matrix in its SKU. Critically discuss how product positioning and buyer-supplier relationship positioning can be used to establish a strategic advantage by repositioning products categories. Use 2 or more of the sources given and use the cases as examples.
Notes:
Category management is a systematic and disciplined principle in retail or purchasing wherein managers break down the range of products purchased or sold by a firm or supply chain into discrete groups of similar or related products called product categories and manage each category as a strategic business unit.
View each category as a separate business unit with distinct supply chain performance targets and strategies with related partners (reliability, responsiveness, agility, cost, and asset management) . This is called Portfolio Management.
- Tools for Category Management
Product positioning
How do I categorize the components or products in my stock keeping unit?
Buyer-supplier relationship positioning
How do I categorize the relationships that underpin the different components or products in my stock keeping unit?
Cost-benefit positioning
How to I rationalize the cost vis-à-vis the benefits of each product category and associated buyer-supplier relationships?
Pareto efficiency, also known as “Pareto optimality,” is an economic state where resources are allocated in the most efficient manner, and it is obtained when a distribution strategy exists where one party’s situation cannot be improved without making another party’s situation worse.
Pareto efficiency does allow for a party to experience improvement, a process known as Pareto improvement, but it must not come at the expense of any other party.
Overall supply chain positioning
How to I align the differently positioned products and relationships with my overall supply chain strategy?
