* The three options
-Criteria of three options
-Advantages and disadvantages of the three options
* Final decision and conclusion
TESA AG is a independent subsidiary of the Beiersdorf AG, which has ten production sites worldwide. The company provides over 6000 different kinds of adhesive tapes (of which 300 are consumer products) to its various customers from industrial and handcraft firms. TESA’s wide variety of products demands many different and to some extent complex and specific raw materials. The major competitor of TESA is 3M.
TESA has 3 options to design its purchasing divisions:
* Centralized: TESA will centralize the purchasing of the raw materials for technical tapes, especially the backing materials as monopolistic supplied or single sourced. * Decentralized: TESA will decentralize the purchasing of raw material for specialty tapes, especially for packaging tapes. * Hybrid: TESA will centralize and decentralize some special resins or additives as they are locally obtained or monopolistic obtained.
TESA Raw material’s Kraljic Matric
Leverage items:Special resins or additive components | Strategic items:Backing materials| Non-critical items:Adhesive components| Bottleneck items:Special resins or additive components and Backing materials|
Product characteristics| The influence of the product in cost price on total sales| Strategic importance| Critical items that a company depends on.| Sums of money involved| The amounts of money involved in negotiations about the raw material| Purchasing market’s characteristics| The organization’s freedom of choice in terms of purchasing| Degree of risk related| Higher the purchase decision is, more disciplines will be involved.| Relationship | The long-term collaboration which can get the trust from each other.| Transportation | The convenience and the...