Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

2.2 Strategic Procurement

Intended learning outcomes: Produce an overview on strategic procurement. Differentiate between traditional market-oriented relationship and Customer-Supplier Partnership. Describe strategic procurement portfolios. Explain strategic selection of suppliers. Present basics of supplier relationship management and e-procurement solutions.


In the mid-1970s, there was a shift in many areas of the economy — caused by the law of supply and demand — from sellers’ markets to buyers’ markets. This had big consequences for procurement management, or supply management, in particular for collaboration strategies. In this section, we compare procurement via the traditional marketplace with customer-supplier partnership. We then introduce strategic procurement portfolios and methods for strategic selection of suppliers. This is followed by a look at supplier relationship management, and in particular, e-procurement solutions.


Course section 2.2: Subsections and their intended learning outcomes

  • 2.2 Strategic Procurement

    Intended learning outcomes: Produce an overview on strategic procurement. Differentiate between traditional market-oriented relationship and Customer-Supplier Partnership. Describe strategic procurement portfolios. Explain strategic selection of suppliers. Present basics of supplier relationship management and e-procurement solutions.

  • 2.2.1 Overview on Strategic Procurement

    Intended learning outcomes: Disclose the supplier structure follows the product structure. Differentiate between direct material, indirect material, commodities, and various demand patterns. Describe various traditional procurement strategies.

  • 2.2.2 Traditional Market-Oriented Relationship Compared with Customer-Supplier Partnership

    Intended learning outcomes: Present target area strategies for the traditional market-oriented relationship, and disclose possible supply chain risks entailed. Identify the concept of customer-supplier partnership and disclose adequate target area strategies, and disclose possible supply chain risks entailed.

  • 2.2.3 Strategic Procurement Portfolios

    Intended learning outcomes: Explain the supplier portfolio describing the degree of mutual dependence between buyer and supplier. Present procurement strategies for material groups in dependency on their logistics characteristics.

  • 2.2.4 Strategic Selection of Suppliers

    Intended learning outcomes: Describe possible supplier-evaluation criteria for each target area. Explain the score and the gap method for supplier evaluation, using an example with two suppliers. Disclose possible supply chain risks risks entailed using these methods.

  • 2.2.5 Basics of Supplier Relationship Management and E-Procurement Solutions

    Intended learning outcomes: Produce an overview on several categories of e-procurement solutions. Describe various classifications of an electronic marketplace according to the institutional provider, the degree of “openness”, and the range.



Course 2: Sections and their intended learning outcomes

  • Course 2 – Supply Chain Design: Business Relations and Risks

    Intended learning outcomes: Explain concepts such as the make-or-buy decision, tariff-orientation and total cost of ownership in a global supply chain. Differentiate strategic design options for the relationships with and the selection of suppliers. Disclose strategies for intensive cooperation in the supply chain. Describe identification, assessment and handling of supply chain risks.

  • 2.1 Ownership and Trade in a Global Supply Chain

    Intended learning outcomes: Present the concept of the make-or-buy decision in detail. Explain the value content requirements and tariff-orientation in a global supply chain. Describe the total cost of ownership in a global supply chain.

  • 2.2 Strategic Procurement

    Intended learning outcomes: Produce an overview on strategic procurement. Differentiate between traditional market-oriented relationship and Customer-Supplier Partnership. Describe strategic procurement portfolios. Explain strategic selection of suppliers. Present basics of supplier relationship management and e-procurement solutions.

  • 2.3 Designing a Partnership Relationship

    Intended learning outcomes: Present target area strategies for intensive cooperation. Explain the Advanced Logistics Partnership (ALP) model with concepts such as building trust, working out collaborative processes in the supply chain, avoiding the bullwhip effect. Describe the virtual enterprise and other forms of coordination among companies.

  • 2.4 Supply Chain Risk Management

    Intended learning outcomes: Produce an overview on supply chain risk management. Explain the identification of supply chain risks. Describe the assessment of supply chain risks. Disclose how supply chain risks can be handled.

  • 2.5 Summary

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