Presentation:
Procurement organizations are often responsible for managing thousands of parts and/or ingredients that can be purchased from hundreds of Suppliers.  The large number of items and Suppliers makes it nearly impossible to manage each individual item as much as one wants to. This is why Procurement organizations rely upon stratification methods and other sorting methodologies to provide insights into GROUPS of items.  This way, Purchasing professionals can focus on the “important few” items while not wasting time on the “trivial many” items.  The problem with this is that most organizations rely on stratification methods derived from Pareto analytics… which no longer work in our global supply chain world. The “Component Criticality Matrix” is a tool that can be used to solve this problem.

The purpose of this presentation is to demonstrate how the “Component Criticality Matrix” can better identify items that are truly critical so that added planning and procurement attention can be applied.

The “Component Criticality Matrix” is a tangible analytic tool that helps all Purchasing professionals to quantifiably determine how critical an item is to the overall enterprise.  Once this is accomplished, special attention can be applied to manage the item, its inventory levels, and its impact on customer service.