The implementation of vendor strategies in a South African chemical company

Thesis (M.B.A.)--North-West University, Potchefstroom Campus, 2005.The prime objective of this study was to provide guidelines for the implementation of vendor strategies at Sasol Polymers. A secondary objective was to improve the efficiencies of procurement. In the past, procurement was seen as an operational function responsible for buying goods and services to support business needs. Global competition and the striving towards becoming world class made companies more aware of the value that procurement could add to the business on a strategic level. The common objective of any organisation is to maximise profits. A strategic procurement approach, based on total cost of ownership principles, plays an important role, as input costs are no longer evaluated based on price in isolation. The importance of supplier relationships has also become inevitable. Successful businesses will therefore, tend to align procurement strategies with their business strategies. The study was based on Sasol Polymers, a division of Sasol responsible for the manufacturing of various plastic products aimed at the local and foreign markets. The literature study was based on procurement strategies and the effect that global competition and best practices have on internal procurement efficiencies. An empirical research, based on Sasol Polymers supply relationships, was performed to understand the current situation and the role that supplier relations could play in the improvement of procurement efficiencies. The Kraljic relationship model was researched and it is the author's opinion that the model is still very relevant, although many companies fail to realise the potential of this model. It is finally concluded that Sasol Polymers' procurement processes compare favourably with world class procurement practices. The Kraljic relationship model is utilised with success in creating commodity strategies, however, procurement still has a need for vendor strategies.Master