By Daniel Kossmann, Donald Kossmann

The publication describes the K-Method which has been built by way of the authors. the aim of the K-Method is to barter and administrate a fancy portfolio of customised fabrics, all belonging to an analogous paying for staff (e.g. labels). The underlying inspiration is to agree costs for specification positive aspects, rather than giving every one fabric a person fee in response to its distinct specification. by means of doing so, a value formulation should be agreed among the client and provider which even defines costs of destiny fabrics with any type of specification.

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Additional info for Complexity Management with the K-Method: Price Structures, IT and Controlling for Procurement of Packaging Materials

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12). 8 %. Thus, they are all within the 3 % tolerance we were aiming at to avoid mixed costing at the supplier’s end. However, in this example and generally speaking, we do not know the supplier’s margins. We have assumed that the supplier originally applied the same profit margin (in %) for each label when he originally quoted prices for the labels. Consequently, it cannot be assumed that the new prices which vary a maximum of 3 % from the old quotations guarantee a maximum deviation of 3 % of the margin, but the real deviation of the profit margin will be close to these 3 %.

This means, that the FMCG buyer will always consider buying feedstock materials 26 3 Solutions for Major Issues Using the K-Method directly from the feedstock materials market and will provide these feedstock materials to the supplier asking him to convert them into packaging materials. Such an approach requires quite some effort from the buyer. In many cases the buyer does not have the same purchasing volume for his feedstock materials as the supplier who can combine this volume with the volumes of other FMCG customers.

3). 4 Tenders Traditional packaging purchasing uses tenders as a special form of request for quotations (“RFQ”). When preparing a tender, a major part or all of the items in a category are tendered. This means that the present supplier and all challenging suppliers have equal chances to win the business. Tenders are not popular among suppliers. The present suppliers regard the current and ongoing business as their vested right. For these suppliers, this means that they have something to lose with tenders, either volumes or prices or both.

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