Questions :

1. Discuss the appropriate sourcing strategy for a component with low customer
importance, fast clock speed, and no competitive advantage.
2. Apply the Kraljic matrix model to the Cisco virtual manufacturing strategy.
3. Provide examples of three types of items identified in the Kraljic matrix model :
leverage, bottleneck, and noncritical items.
4. Analyze component procurement strategy as a function of the product life cycle.
Specifically identify the appropriate strategy when a product is at a growth stage
(introduction), maturity (steady state), and end-of-life.

Answers :

1. The appropriate sourcing strategy would be to focus on lead time production or

increasing flexibility.

2. Kraljic matrix model to Cisco virtual manufacturing strategy :

Bottleneck Items Strategic Items

● Internet connection ● Bolt
● Software update ● Wire

Non critical Items Leverage Items

● Office stationery ● Routers
● Paper

3. Examples of three types of items identified in the Kraljic matrix model :

a. Leverage : gasoline for cars
b. Bottleneck : ink in printing company
c. Noncritical : office stationery

4. Component procurement strategy for :

a. Introduction : During this stage, companies are investing time and money to
market their products. These products are in competition with similar and
cheaper products. Company may be short order as orders spike unpredictably.
b. Steady state : During this stage components begin to stabilize as demand
begins to stabilize. Companies are aiming to continue to grow their brand and
gain new customers,
c. End-of-life : As the product ages, new-renovated products are being
introduced by competition. Companies may reduce cost, sales or clearance, to
rid of leftover products and begin to focus on new products.