Portfolio Management Flashcards

A category plan for a strategic item would most likely include which element?

Answer: Joint improvement initiatives and executive sponsorship

Strategic categories benefit from governance, collaboration, and joint value programs.

A supplier relationship management (SRM) program should prioritize which suppliers?

Answer: Strategic and critical suppliers that most affect value and risk

SRM resources are limited, so they focus on suppliers with the most impact.

Which sourcing strategy fits a leverage item in a highly competitive market with stable specifications?

Answer: Competitive tendering with short-to-medium-term contracts

Competitive markets with stable specs reward regular market testing.

Demand management in portfolio strategy aims to do what?

Answer: Control and optimize internal consumption and specifications to reduce cost and risk

Demand management questions what is bought and how much, not just the price paid.

Which indicator would most likely signal that an item is moving from leverage to bottleneck?

Answer: Supplier consolidation through mergers leaving few qualified sources

Fewer qualified sources raise supply risk and shift positioning.

What is the main benefit of aligning the procurement portfolio with organizational strategy?

Answer: It ensures procurement effort and resources support business priorities and competitive advantage

Alignment ensures procurement focuses on what drives enterprise value.

Which approach best balances the procurement portfolio when budget pressure is high?

Answer: Pursue savings in leverage categories while protecting continuity in strategic and bottleneck categories

Differentiated strategies capture savings without exposing critical supply to undue risk.