While these approaches for designing a supplier portfolio are applicable across most types of buyer organizations. How to organize and operate the portfolio can take multiple forms.

Buyers must work through three steps to appropriately manage complexity and cost in the organization-specific situations. These include:

Detailed Steps for Organizing and Operating the Portfolio

First, the details of the approach should focus on the organizational entities included in the optimization as the critical foundation that shapes future decisions. Will they select a truly enterprise-driven approach towards optimization versus starting off in a few major groups and then expanding scope?

These choices are closely linked to the buyers organizational structure, decision-making processes, and culture. Most large buyers are unlikely to start optimizing their ADM portfolios by increasing the scope of entities to include, but rather, deploy a new model in one area and then seek to increase scope to include other business units/geographies.