PROMPT

Start by listing the ten most frequent places you shop (personally or business). Can you estimate
the approximate share of your purchases for each place?

Note: if you do not feel comfortable using real store names, you do not have to. Also, you can
use percentages for the share.

JSN Metals – 15%

Steel – Aviva Metals – 5%

Ink – Sun Chemicals – 15%

Paper - Sappi Fine Paper – 10%

Plastic – 1 (For Body) – Dupont Dow Chemical – 10%

Plastic – 2 (For Refills and Notebook Bindings)– JM Eagle – 10%

Graphite - Superior Graphite Co. - 15%

Wood - West Fraser Timber Co., Ltd. – 10%

Rubber - PPG Industries – 5%

Cardboard Boxes - International Paper Company – 5%

PROMPT
What categories of suppliers make sense for your situation? What do you name the categories? How do
you assign the categories (what are your two dimensions)? Which of the suppliers you previously
mentioned go into which category?

Note: it is okay if you want to use the common Strategic, Bottleneck, Leverage, and Routine delineation
here - but if you can improve on it, that would be even better. Remember, the two dimensions are Profit
Impact and Supply Risk.

I would categorize the suppliers into four categories based on the two dimensions of Profit Impact and
Supply Risk. This categorization allows me to prioritize supplier management efforts based on their
importance to my business and the associated supply risk. It helps in focusing resources on strategic
relationships while also ensuring reliable supply sources for routine needs.

Assigning Suppliers to Categories:

• Strategic Suppliers: Sun Chemicals (Ink), Superior Graphite Co. (Graphite).

• Key Suppliers: JSN Metals, Sappi Fine Paper.

 • Leverage Suppliers: Dupont Dow Chemical (Plastic for Body), JM Eagle (Plastic for Refills
and Notebook Bindings).

• Routine Suppliers: Aviva Metals (Steel), PPG Industries (Rubber), International Paper
Company (Cardboard Boxes).

PROMPT
For each of the suppliers who you mentioned (and placed in a respective segment) evaluate your
relationships with each of them. Specifically, focus on the unique value you receive from them and the
unique value they receive from you (revenue enhancements, cost savings, innovation, flexibility, etc.).

• JSN Metals (High Risk and High Profit Impact – Strategic Suppliers): A very healthy relationship since
the beginning of our company, as they have been supplying us with the essential good quality of brass
for making our ballpoint pen tips, pen holders and much more. Therefore, placed under strategic
suppliers. We are regular customers of this company, mutually benefitting from each other’s sales.

• Aviva Metals (High Risk and High Profit Impact – Strategic Suppliers): A newer addition to our supplier
list. We expect to grow our sales mutually in the future, but considering that we are looking to innovate
and want to improve the quality of our pens even further through the introduction of steel-based tips,
we have placed them under Strategic Suppliers.

• Sun Chemicals – (Low Risk and High Profit Impact - Leverage Suppliers): We have found a large supplier
of ink through this company at a reasonable cost to the company with maximum quality, therefore we
can expect a high profit return. In case of any supply chain disruption with this company, we have backup
options, therefore it is a low-risk option.

• Sappi Fine Paper (High Risk and High Profit Impact - Strategic Suppliers): Quality of Paper is a very
important commodity in manufacturing notebooks, and this company offers the best in the business
which leads to production of best quality notebooks and more profits. We are one of the only companies
in the state these papers are supplied to and are therefore mutually dependent for growth. Any
disruption in supply of paper from this company could have drastic effects in our production line and
quality and therefore, it is a high – risk option.

• Dupont Dow Chemical (Low Risk and High Profit Impact - Leverage Suppliers): This company is a
famous international chemical industry that produces plastic which can be moulded for the pen body.
Since pens are one of our flagship products, they are a high profit impact option, but since the market is
open to other supplier options, they do not cause much of a risk.

• JM Eagle (Low Risk and High Profit Impact - Leverage Suppliers): A start-up located in our state, this
company manufactures a different grade of plastic used in our pens. Since being a start-up, the
relationship between our companies can be easily leveraged leading to a high profit impact, and also
poses a low risk due to the market availability of plastic of these grades.

• Superior Graphite Co (High Risk and Low Profit Impact - Bottleneck Suppliers) : Graphite is supplied
only by a handful of suppliers in the state. Therefore, we need to maintain good supplier relationships
with this company, as they provide the best quality of graphite and follow sustainability practices when
extracting graphite. Therefore, they provide a high risk, low profit impact

• West Fraser Timber Co., Ltd. (High Risk and Low Profit Impact - Bottleneck Suppliers): Wood required
for making pencils specifically needs to be of a different grade, and this company provides such grade of
pencil wood. Moreover, they follow ethics and regulations and are concerned about the environment
when it comes to cutting wood and are bottleneck suppliers and provide a high-risk option and
therefore, our relationship is mutually beneficial but provides a low profit impact.

• PPG Industries (Low Risk and Low Profit Impact - Routine or Non – Critical Suppliers): We have been
buying rubber for our products since the beginning, and this company does not pose a high risk to our
supply chain due to the availability of other suppliers in the market and also considering that rubbers are
cheap, has a low profit impact.

• International Paper Company (Low Risk and Low Profit Impact - Routine or Non – Critical Suppliers): We
use cardboard boxes only for packaging and shipping. They come in different sizes and are critical to our
supply of products to the market. Although, the market for this product is huge and is therefore a low-
risk option to source our cardboard from this company. It is also mutually beneficial and therefore, the
price of procuring these products can be negotiable and therefore, lowering down the costs.

PROMPT
Outline an action plan to streamline your purchases from your suppliers.

We have set up a separate team of employees who act as a bridge of communication between our
company and the suppliers and ensure the smooth procurement and customer relationship with the
suppliers. Also, it is the duty of this team to ensure that there are no shipment delays and safety stock is
to be maintained to ensure that the production line and quantity is not hit. This team also constantly
monitors the performance of every individual supplier and ensures that they maintain quality and ethics
expected by our company. This will further push these suppliers to produce items which are of great
quality to maintain their relationship and business with our company.