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Purchasing Must Become Supply Management
... Identifying procurement strategies using The Kraljic Matrix framework can help companies categorize their procurement activities based on two primary factors: profit impact and supply risk. These dimensions help businesses develop targeted procurement strategies (Kraljic, 1983). Companies can formulate appropriate strategies for each category by dividing procurement categories into four quadrants (strategic, bottleneck, leverage, and non-critical). ...
... This matrix is essential for optimizing procurement strategies and supply chain management. It was developed by Kraljic in 1983 (Kraljic, 1983) Proceedings of the 15 th International Conference on Industrial Engineering and Operations Management Singapore, February 18-20, 2025 © IEOM Society International The Kraljic Matrix categorizes items or suppliers based on two primary factors: profit impact and supply risk ( Figure 1). Utilizing these two dimensions, the Kraljic Matrix divides procurement into four quadrants: ...
... This matrix is essential for optimizing procurement strategies and supply chain management. It was developed by Kraljic in 1983 (Kraljic, 1983) Proceedings of the 15 th International Conference on Industrial Engineering and Operations Management Singapore, February 18-20, 2025 © IEOM Society International The Kraljic Matrix categorizes items or suppliers based on two primary factors: profit impact and supply risk ( Figure 1). Utilizing these two dimensions, the Kraljic Matrix divides procurement into four quadrants: ...
... An important early contribution to the SCM understanding of SRM is the work of Kraljic (1983), who developed a supplier segmentation model based on strategic importance. Kraljic's matrix, still widely used in SCM today, recommends different management strategies for suppliers depending on their categorization as strategic, bottleneck, leverage, or non-critical: ...
... This approach aligns with the SCM focus on managing risks and ensuring that resources are appropriately allocated to suppliers that contribute the most to the firm's strategic goals (Cousins, Lawson, & Squire, 2008;Kraljic, 1983). Thus, in SCM, SRM serves predominantly as a tool that extends beyond traditional procurement, with a focus on reducing costs, achieving operational efficiency, and reducing risk, through sustained collaboration and performance-driven evaluations Cousins et al., 2008). ...
... In contrast, SCM, being primarily concerned with the optimization of the supply chain, emphasizes efficiency, risk management, and cost control Cousins et al., 2006;Harland et al., 1999). Relationships with suppliers are often performance-driven, with an emphasis on integrating suppliers into the firm's logistical and operational processes (Kraljic, 1983;Monczka et al., 1998). However, despite their slightly different orientations, both approaches recognize the importance of performance, cost-efficiency, and joint value creation as central objectives in managing supplier relationships. ...
... Partner segmentation and supplier segmentation are well-established methods in managing business relationships, allowing organisations to create segments that distinguish partners and suppliers into categories with comparable properties. This study will apply the Portfolio Purchasing Model (PPM) of Kraljic (1983), which provides a foundational framework for segmenting suppliers based on their strategic importance and the complexity of their supply market. The developed DSS will then be applied to a cargo airline. ...
... Within the area of PRM, segmentation has emerged as a powerful tool, especially within the framework of the PPM by Kraljic (1983). The PPM categorises suppliers based on their strategic importance and the complexity of the supply market, allowing companies to prioritise and manage supplier relationships more effectively. ...
... For this study, the criteria have been selected to reflect both willingness and capabilities to enhance sustainability. This allows for creating a matrix to segment the partners into different categories (structuring decision problems), following a framework similar to the Kraljic Matrix (Kraljic, 1983). By creating a matrix and segmenting partners based on their willingness and capabilities, cargo airlines can adopt strategies to guide PRM toward achieving sustainability goals. ...
The urgency of sustainability in aviation has led to a focus on operational activities, especially in the global supply chain of cargo airlines. This study introduces a Decision Support System (DSS) to improve Partner Relationship Management. The DSS helps partners work toward sustainability goals. It uses the Best-Worst Method in a Multi-Criteria Decision-Making framework. The DSS segments partners based on their sustainability capabilities and willingness. It also proposes targeted strategies. The system was applied to a cargo airline aiming for zero emissions and zero waste, managing Ground Handling Agents across 168 outstations. The application showed the effectiveness of partner segmentation, with most partners demonstrating high capability and willingness. A step-by-step strategy was developed to implement sustainability practices, including a checklist for performance assessment. The study concludes that the DSS and strategy offer a structured and actionable approach that can be adapted for other cargo airlines. Future research is recommended to validate the DSS in other industries, explore alternative segmentation methods, and refine strategies considering partner size and impact.
... Partner segmentation and supplier segmentation are well-established methods in managing business relationships, allowing organisations to create segments that distinguish partners and suppliers into categories with comparable properties. This study will apply the Portfolio Purchasing Model (PPM) of Kraljic (1983), which provides a foundational framework for segmenting suppliers based on their strategic importance and the complexity of their supply market. The developed DSS will then be applied to a cargo airline. ...
... Within the area of PRM, segmentation has emerged as a powerful tool, especially within the framework of the PPM by Kraljic (1983). The PPM categorises suppliers based on their strategic importance and the complexity of the supply market, allowing companies to prioritise and manage supplier relationships more effectively. ...
... For this study, the criteria have been selected to reflect both willingness and capabilities to enhance sustainability. This allows for creating a matrix to segment the partners into different categories (structuring decision problems), following a framework similar to the Kraljic Matrix (Kraljic, 1983). By creating a matrix and segmenting partners based on their willingness and capabilities, cargo airlines can adopt strategies to guide PRM toward achieving sustainability goals. ...
The urgency of sustainability in aviation has led to a focus on operational activities, especially in the global supply chain of cargo airlines. This study introduces a Decision Support System (DSS) to improve Partner Relationship Management. The DSS helps partners work toward sustainability goals. It uses the Best-Worst Method in a Multi-Criteria Decision-Making framework. The DSS segments partners based on their sustainability capabilities and willingness. It also proposes targeted strategies. The system was applied to a cargo airline aiming for zero emissions and zero waste, managing Ground Handling Agents across 168 outstations. The application showed the effectiveness of partner segmentation, with most partners demonstrating high capability and willingness. A step-by-step strategy was developed to implement sustainability practices, including a checklist for performance assessment. The study concludes that the DSS and strategy offer a structured and actionable approach that can be adapted for other cargo airlines. Future research is recommended to validate the DSS in other industries, explore alternative segmentation methods, and refine strategies considering partner size and impact.
... (1) An ability to have (or apply) an appropriate purchasing portfolio and supplier categorization [30,31] (2) An ability to have an expansion and diversification of locations/sources of supply [26] (3) An ability to have a strengthened partnership with its strategic supplier and request to have a safety stock of important commodities to ensure smooth supply [20] (4) An ability to have a strengthened partnership with its strategic supplier and request increased supplies on short notice [50] Flexible supply (1) An ability to assist (or provide information or participate) buyer in analyzing and categorizing purchasing portfolio and supplier [30,31] (2) An ability to provide expansion of locations of supply by having inventories in multiple locations domestically and internationally [26] (3) An ability to provide a strengthened partnership and store safety stocks or extra inventories (i.e., important commodities) for buyers [20] (4) an ability to provide a strengthened partnership and increased supplies to be delivered at short notice (i.e., having spare/slack capacity) [50] (1) An ability to have a diversification of inbound distribution channels (and transport modes) [26] (2) An ability to redeploy and expand its own transport resources for inbound deliveries (in case the supplier tier-1 uses its own transport resources) [26] (3) An ability to have an expansion/diversification of transport outsourcing options [26] Flexible transport and distribution channel (1) An ability to provide a diversification of outbound distribution channels (and transport modes) [26] (2) An ability to redeploy and expand its own transport resources for outbound deliveries (in case the supplier tier-1 uses its own transport resources for deliveries to the buyer) [26] (3) An ability to provide an expansion/diversification of transport outsourcing options [26] ...
... (1) An ability to have (or apply) an appropriate purchasing portfolio and supplier categorization [30,31] (2) An ability to have an expansion and diversification of locations/sources of supply [26] (3) An ability to have a strengthened partnership with its strategic supplier and request to have a safety stock of important commodities to ensure smooth supply [20] (4) An ability to have a strengthened partnership with its strategic supplier and request increased supplies on short notice [50] Flexible supply (1) An ability to assist (or provide information or participate) buyer in analyzing and categorizing purchasing portfolio and supplier [30,31] (2) An ability to provide expansion of locations of supply by having inventories in multiple locations domestically and internationally [26] (3) An ability to provide a strengthened partnership and store safety stocks or extra inventories (i.e., important commodities) for buyers [20] (4) an ability to provide a strengthened partnership and increased supplies to be delivered at short notice (i.e., having spare/slack capacity) [50] (1) An ability to have a diversification of inbound distribution channels (and transport modes) [26] (2) An ability to redeploy and expand its own transport resources for inbound deliveries (in case the supplier tier-1 uses its own transport resources) [26] (3) An ability to have an expansion/diversification of transport outsourcing options [26] Flexible transport and distribution channel (1) An ability to provide a diversification of outbound distribution channels (and transport modes) [26] (2) An ability to redeploy and expand its own transport resources for outbound deliveries (in case the supplier tier-1 uses its own transport resources for deliveries to the buyer) [26] (3) An ability to provide an expansion/diversification of transport outsourcing options [26] ...
... While this type of categorization is better than none, it remains insufficient to ensure the long-term availability of critical commodities. To enhance resilience, tier-1 suppliers must consider the risks and complexities of sourcing when categorizing suppliers and purchasing portfolios [30,31]. The set of corresponding questions in Table 4 can help determine whether the tier-1 supplier has an effective supplier and purchasing portfolio categorization, which can be indirectly converted into a level of resilient performance. ...
Background: Cross-border suppliers have always been points of disruption, further impacting international trade, businesses, and societies along the chain. Understanding the current resilience capabilities of cross-border suppliers is a stepping-stone to implementing resilience initiatives and policies to mitigate disruptions. However, no guidelines or practical tools exist to help cross-border suppliers conduct a deep-dive analysis of their resilience. Therefore, this paper proposes an assessment tool to guide cross-border suppliers in assessing their resilience capabilities. Methods: The supplier-focused resilience assessment approach was adapted from the Logistics Performance Index concept. The questionnaire and its resilience assessment dimensions were established through a literature review with the support of experienced cross-border professionals. Case study validation was further conducted to demonstrate the tool’s applicability. Results: The assessment evaluation through the Cross-Border Resilience Performance Index facilitates detailed analysis and benchmarking, enabling recommendations for necessary resilience initiatives and policies. Conclusions: This study contributes to the supply chain literature by adding a more practical resilience assessment approach focusing on cross-border suppliers. The Cross-Border Resilience Performance Index is the study’s primary contribution and is novel to the literature. The tool’s advantages include ease of use, replication potential, and its ability to glean comprehensive insights, ultimately improving supplier resilience and supply chain robustness. By implementing more precise initiatives, the tool increases the chances of cross-border suppliers being selected and maintained by buyers, helping them sustain their businesses and better respond to changing conditions to mitigate disruptions.
... In this context, Kraljic [3] introduced the concept of the Kraljic Portfolio Matrix (KPM) for modeling Available online at: http://e-jurnal.lppmunsera.org/index.php/JSMI ...
... So far, PT XYZ has never analyzed suppliers or the items they supply; the company has only purchased items needed as if they were a daily routine. Kraljic [3] proposed that companies should manage their relationships with suppliers differently depending on the nature of the items supplied. Suppliers are categorized into four types: bottleneck, non-critical, leverage, and strategic (refer to Section 3). ...
... Kraljic [3] introduced the Kraljic Portfolio Matrix (KPM) as a comprehensive portfolio approach for professional purchasers, serving as an analytical tool to optimize the utilization of diverse supplier capabilities [9]. This framework has become widely adopted among purchasing professionals, particularly in Western Europe, where it enjoys substantial recognition. ...
Procurement is important in a company because it will directly affect how much a company can reduce costs. One of the activities in the procurement process is purchasing. PT XYZ has never conducted a supplier analysis or analysis of items purchased from suppliers. PT XYZ only purchases items daily; if managed properly, it can save the company's expenses and improve supplier relationships. This study aims to formulate purchasing strategies by implementing the Kraljic Portfolio Matrix (KPM). KPM has been widely applied to various cross-sectoral companies to manage suppliers more effectively. KPM divides items provided by suppliers into four quadrants based on supply risk and profit impact to minimize supply risk and maximize purchase profit. Thirty-five sup-pliers were analyzed in this study. The result shows that of the four KPM quadrants, three quadrants are filled, namely the non-critical quadrant (containing 12 suppliers), bottleneck (14), strategic (9), and none of the suppliers located in the leverage quadrant. Purchasing strategies based on these three quadrants are then formulated, and a total of seven strategies are produced. An analysis of the dominance of buyers and suppliers is also given to find out the relationship and balance of power between these parties.
... One of the biggest challenges that procurement managers face is the selection of strategic suppliers who will provide them with products, components, and materials in a timely and effective manner, in order to maintain competitive advantages. The strategic approach varies and depends on the type of procurement, as presented by Kraljic (1983), using variables such as the impact on profit and supply risk as analysis factors. Therefore, supplier selection based on the right procurement strategy is essential for the entire supply chain. ...
... The Kraljic Portfolio Matrix (KPM), initially proposed by Kraljic (1983), provides a way to strategically manage purchasing. The matrix focuses on developing purchasing strategies for different commodities based on their potential value and supply risk. ...
In the supplier evaluation process, companies focus on comparing performances. The literature offers various analysis methods, although the matrices used are often subjective and difficult to implement in practice. This article aims to develop an easily implementable model, aimed at meeting the company's need to identify suitable suppliers for integration projects. Integration involves establishing close collaboration and cooperation between suppliers and customers with the goal of reduced inventory levels, shorter delivery times, and improved customer service. Thanks to the collaboration of a sample of companies, a new model is proposed. Our research is structured in three phases: identification of parameters for supplier evaluation; creation of the matrix; evaluation of the satisfaction level reported by the companies that have used the model. A comparison matrix between ABC classes and a multi-criteria supplier evaluation index allow the company to define a set of suppliers with a high probability of integration. This practical approach has been implemented in approximately 23 companies, and the level of satisfaction reported is high because it demonstrates greater rationality in supplier evaluation.
... Classification of procurement portfolio in public procurement Portfolio models have commonly been used as a management tool to allocate resources to strategically important areas (Olsen and Ellram, 1997). For example, in the procurement context, the portfolio model has been used to classify commodities based on their profit impact and delivery risk (Kraljic, 1983), the level of difficulty managing the purchase situation and the importance of the purchase (Olsen and Ellram, 1997), the supplier market based on performance and competition (Kashiwagi, 1999) and relationships based on cooperative norms and information exchange (Wang and Bunn, 2004). Uyarra and Flanagan (2010) developed a fourfold typology of public procurement based on Kraljic (1983)'s model and Storper (1997)'s product differentiation. ...
... For example, in the procurement context, the portfolio model has been used to classify commodities based on their profit impact and delivery risk (Kraljic, 1983), the level of difficulty managing the purchase situation and the importance of the purchase (Olsen and Ellram, 1997), the supplier market based on performance and competition (Kashiwagi, 1999) and relationships based on cooperative norms and information exchange (Wang and Bunn, 2004). Uyarra and Flanagan (2010) developed a fourfold typology of public procurement based on Kraljic (1983)'s model and Storper (1997)'s product differentiation. This typology classifies public procurement according to the user's market (demand) situation and the nature of the production process (offering). ...
Purpose
The purpose of this study is to provide new insights into the differences between the attractiveness drivers in different types of public procurement (i.e. efficient, technological, adapted and experimental).
Design/methodology/approach
This study used a qualitative multiple-case study design. The study examined eight public procurement cases by interviewing the representatives of 18 suppliers and, through cross-case analysis, formulated a framework of customer attractiveness drivers for different types of public procurement.
Findings
This study reveals differences in customer attractiveness drivers between efficient, technological, adapted and experimental public procurement. This study finds that economic and market growth drivers are only sufficient for efficient procurement, while all the identified drivers are relevant for experimental procurement.
Social implications
The contribution guides public organizations to increase their attractiveness by considering the supplier perspective in different types of procurement to increase supplier participation in public tenders.
Originality/value
The research contributes to the literature on customer attractiveness in public procurement by shedding light on the impact of procurement type on customer attractiveness drivers, and elaborating it through the lens of social exchange theory. In addition to the differences between procurement types, the study found evidence for a previously unintroduced driver – societal attractiveness.
... These often appear early but are not always tracked. The Risk-Management Resilience Framework provides tools for identifying early signals [31], while the Kraljic Matrix helps evaluate staffing partners based on risk and dependency [32]. For instance, using long-term sourcing channels reduces exposure during peak seasons, while evaluating staffing agencies by responsiveness improves reliability. ...
... Tracking the frequency of each risk highlights which concerns are most widespread. This supports the analysis of H₁4 and explains why some firms hesitate to move forward despite recognising benefits [49], [32]. ...
This study explores how predictive analytics contributes to workforce resilience in Dutch third-party logistics (3PL) operations. Faced with labour shortages, high turnover, and unpredictable demand, 3PL providers are turning to predictive tools to strengthen workforce planning. Using a mixed-methods approach, the study combines survey data from 75 logistics professionals with case study validation to assess whether predictive analytics improves labour stability, adaptability, and risk mitigation. With a margin of error of ±11.3%, results suggest that higher adoption correlates most strongly with improved workforce stability and structured risk management. Integration success is linked to dashboard use, phased rollouts, and data accuracy. However, issues such as resistance to change, poor forecasting inputs, and fragmented systems continue to limit outcomes. The findings suggest that predictive analytics supports workforce resilience only when paired with strategic alignment and internal readiness. Future research should explore long-term adoption effects, policy interactions, and cross-sector comparisons.
... The role of supply management has undergone significant transformations over the past four decades. A pivotal moment occurred in the early 1980s with the publication of "Purchasing must become Supply Management" by Kräljic (1983) (Ellram and Tate, 2015). Kräljic's framework introduced a model for devising sourcing strategies for products and services (Landale et al., 2017), establishing supply management and acquisition activities as strategic functions within organizations, particularly in manufacturing sectors. ...
... These functions play a crucial role in enhancing sustainability and fostering competitive advantage for the entire company (Huma et al., 2020). According to Kräljic (1983), the necessity for a strategic supply model hinges on several factors: strategic importance measured by added value per product line, impact on company profitability, representation in total costs, complexity of the supplier market and logistical conditions, scarcity of supply, the pace of technological or material advancements, and even monopolistic market conditions. Evaluating these factors in the context of the company's scenarios, senior management and procurement professionals must determine a supply strategy that empowers the company to fortify its purchasing prowess with key suppliers, thereby minimizing risks. ...
The objective of this study is to propose an instrument for identifying the level of maturity of purchasing and supply management in relation to Strategic Sourcing. Based on an initial model, a maturity measurement instrument was applied to a case study company in a chemical industry company in Vale dos Sinos, in order to validate the tool. Based on this, a survey was carried out with the aim of capturing the perception of purchasing professionals on the topic. By sending a questionnaire to 250 professionals in the purchasing and supply management area, a return rate of 28% (70 respondents) was obtained from this sample. For the data obtained, structural equation model-ing (SEM) was carried out using Smart PLS 3.0® software. With the modeling, a load of 0.428 was obtained for the suppliers construct, 0.555 for the inventory construct and 0.158 for the indicators construct. Overall, the satisfactory constructs for this sample positively impact 67.8% on the Strategic Sourcing construct. Therefore, for this specific sample, the constructs referring to suppliers, inventory and indicators jointly impact Strategic Sourcing. The research in question proposed a model for a better understanding of Strategic Sourcing structures and aims to contribute to practical and organizational contexts regarding the maturity of this topic among purchasing professionals. This understanding aims to provide readers with greater empirical and academic understanding of this emerging and important topic for business and company competitiveness.
... Furthermore, it is notable that much of the research on power in business relationships adopts a transactional orientation, reflecting the historical roots of power research in the business-to-business context. Examples include studies on power in channel relationships (Gaski, 1984;Shervani et al., 2007) and power in purchasing (Caniëls & Gelderman, 2007;Kraljic, 1987). This orientation has contributed to a partial understanding of power asymmetry, and there is a need for a more comprehensive and balanced exploration that considers both the powerful buyer and the strategies employed by less powerful suppliers. ...
... In the realm of business markets, power refers to "the potential to influence another's behavior, which manifests when a firm makes demands that are incompatible with another firm's desires, leading to resistance by the firm receiving the demand" (Cowan et al., 2015, p. 142). In business-to-business marketing the concept of power appears early in research on distribution channels (Gaski, 1984) and purchasing processes (Kraljic, 1987). Largely these streams of research define buyer and supplier as competitors in a zero-sum game in which they aim for optimizing their own benefits at the cost of the other actor. ...
... Generally, basic purchasing competencies include knowledge of purchasing processes, the ability to manage relationships, both inside organisation and with suppliers, market and trend analysis, and negotiation skills (Kraljic, 1983). Developing purchasing competencies also allows for the introduction of innovations and the creation of value by creating long-term relationships with key suppliers. ...
... The ability to quickly adapt to new conditions and knowledge of crisis management procedures are now essential competencies. Thanks to them, purchasing specialists can efficiently respond to supply chain disruptions and minimize their impact on the organization's operational activities (Monczka et al., 2016;Kraljic, 1983). The COVID-19 pandemic has also shown how important it is to manage and shape the digital competencies of employees, not only in operating computer programs, but also in building social relationships based on digital platforms. ...
... However, this study also has a subsidiary purpose, which consists of implementing a PDP program. The statistical population of the suppliers of a PDP program is the set of suppliers that are required to be developed, and in this research, they are the 130 suppliers that are classified in the critical, restrictive, and relevant categories of the SCM-GI [36]. However, to ensure the validity of the sample of suppliers, four concepts are considered: (1) The convenience sampling method is the one that allows for an adequate selection of suppliers to meet the objectives of the PDP-GI program. ...
The competitiveness of the modern goods and services industry depends on the maturity of supply chain management (SCM). However, there is little applied research on quantitative methodology to improve it. The objective of this chapter is to develop the quantitative methodology for process improvement (QMPI), designed to improve SCM maturity through the influence of integrated development projects (IDP). The conceptualization and operation of IDPs is determined from hypothetical models, qualitatively and quantitatively adjusted to the needs of stakeholders, through continuous process improvement in accordance with the international standards. The QMPI methodology was validated by the applied research Molina, according to which, an average improvement of 27% in three critical IDP processes in the Latin American electricity sector with influences between 60 and 97%, improved the maturity of SCM-GI:2011-2021 by 14.3%, with an effectiveness greater than 85%.
... Bu süreç, tüm satın alma faaliyetlerini işletmenin uzun vadeli hedeflerine ulaşmaya yönlendirir. Bu nedenle, her alım kategorisine özgü tasarlanan satın alma stratejileri, işletmenin genel stratejisiyle uyumlu olmalı ve rekabet avantajı sağlamayı hedeflemelidir (Kraljic, 1983;Nielsen Marketing Research, 1992). ...
Bu makale, farklılaştırma stratejilerinin sürdürülebilir satın alma politikaları üzerindeki etkisini ve çevresel belirsizliğin bu ilişkideki aracı rolünü incelemektedir. Çevresel belirsizlik, teknoloji, talep ve tedarik belirsizliği olmak üzere üç alt boyut üzerinden ele alınmıştır. Araştırma, Türkiye İhracatçılar Meclisi’ne üye ilk 1000 ihracatçı firmanın 257 orta ve üst düzey satın alma ve tedarik zinciri yöneticisine uygulanan anket verilerine dayanmaktadır. Elde edilen verilerin analizinde SPSS 27.0 ve AMOS 26.0 programları kullanılmış, hipotez testlerinde ise DFA ve YEM yöntemleri kullanılmıştır. Araştırma sonuçları, farklılaştırma stratejisindeki artışların sürdürülebilir satın alma politikalarını olumlu yönde etkilediğini ortaya koymaktadır. Bununla birlikte, talep ve teknolojik belirsizliklerin farklılaştırma stratejisi ile sürdürülebilir satın alma politikaları arasındaki ilişkide aracılık etkisi göstermediği belirlenmiştir. Ancak, tedarik belirsizliğinin hem farklılaştırma stratejisi hem de sürdürülebilir satın alma politikaları ile anlamlı ilişkiler kurarak bu süreçte aracı bir rol üstlenebileceği saptanmıştır. Bu çalışma, orta ve üst düzey satın alma profesyonelleriyle sınırlı olup 2022 yılına ait kesitsel veriler kullanılarak gerçekleştirilmiştir. Uygulamalı bulgular, işletmelerin rekabet stratejilerini sürdürülebilirlik hedefleriyle uyumlu hale getirmesi gerektiğini ve bu sayede uzun vadeli avantajlar elde edebileceğini göstermektedir. Araştırma, farklılaştırma stratejilerinin sürdürülebilir satın alma politikaları ile ilişkisinde çevresel belirsizliğin ve alt boyutlarının aracı rolünü inceleyerek literatüre özgün bir katkı sunmaktadır.
... Bates et al. (2007) commented on one of the characteristic features of the current automotive industry is the transfer of responsibility for the management and quality of deliveries from the manufacturer to suppliers [6]. Any errors identified outside the production plant in the form of recall actions can have devastating effects on the production company [7]. Thomsen et al. (2001) presented and commented the call-to-action is an important indicator of the efficiency of the automotive distribution network. ...
Nowadays, the automotive giants and the automotive industry are focused on increasing the performance of vehicles and reducing the number of calls to action, which means an increase in costs and loss of customers for automotive companies, which is reflected in reduced competitiveness. The main goal of this paper is to identify the consequences of recall actions in automotive companies, to identify risks, and to determine the dependence between criteria characteristics such as risk size, product quality, frequency of recalls, detection accuracy, and error rate. Within the research part, 5 hypotheses were set, based on which the individual dependencies of the criterion characteristics were determined. The most common cause of calls was electrical engineering and electronics. In terms of error rate, these were design errors. The most called vehicles were Citroen, and the error rate was 3.74%. The greatest risk to the supplier's structure was represented by car bodywork. Call-to-action is an effective tool for automotive companies to take corrective action. The main intention of automotive companies is to reduce the error rate on vehicles and minimize the number of calls to action to increase the competitiveness of automotive giants. The strategic intention of minimizing recall actions is also reflected in maintaining a good reputation with customers - goodwill.
... 1. Increase strategic importance of the procurement management (Kraljic, 1983; cited by Green et al.1996, 189) 2. Emergence of customer-supplier partnerships (Müller, 2005;Kay, 1993;Lamming, 1993; cited by Green et al. 1996, 189) 3. Awareness of the link between purchasing decisions and the environmental performance of a company (see CIPS/BIE 1993; BIE 1995; cited by Green et al. 1996, 189) In view of the negative environmental impacts along the supply chain (high energy costs) as a consequence by WSC, here the importance of a strategic partnership with its energy suppliers 1 is needed. In particular lasting procurement criteria of the WSC must be aimed at demanding ecological and social standards with their energy. ...
Water-supply and distribution companies (WSC) are companies dealing with one of the most crucial resources of earth. Thus, they have a special duty to meet sustainability and CSR issues. In the sustainability context corporate governance and ethical business leadership require explicit integration of environmental and social challenges in the corporate sustainability management of water utilities. In this context, the central research question is how water companies implement sustainability and CSR requirements in their management. The challenges of a sustainable development and CSR issues are aimed at the development and implementation of intelligent sustainability-oriented infrastructure, energy and management systems (Truffer et al. 2010). In order to be able to meet the requirements of a sustainable development and look after their social responsibility WSC should develop strategic options and integrate sustainability instruments continuously. Realizing system changes sustainability-related as well as social value chain processes are to be managed in an integrative way to generate a measurable contribution to the increase of the eco-and social-efficiency in the sense of corporate social responsibility. The main focus of a sustainable change should not only be directed towards the final goods and services of a company, however, above all result in an increase in the value of companies and society (Arnold and Hockerts 2011). Lux et al. (2005) emphasize the evidence of environmental and social management responsibility for supporting transformation processes in the WSC. The influence mechanisms of environmental and social aspects on the economic corporate success may not be underestimated because environmental and social issues have a marketable and a non-marketable character, whose effectiveness can have an effect on the company's success with the help of market, social and political processes (Schaltegger and Wagner 2006). This study investigates to what extent water supply companies implement sustainability management tools and norms (e.g. ISO 14001, ISO 9001, Balanced Scorecard etc.) as well as confirm ISO 26000. Using literature studies and web analysis relevant data was collected. The data was prepared with the help of categories and by keywords (Bryman and Bell 2009). The corresponding management concepts and instruments as well as the CSR criteria were interpreted on the basis of qualitative and quantitative content analysis and by means of contingency analysis. By analyzing 100 German WSE and their CSR aspects-including energy strategies and sustainability management-it could be found that the triggers for a sustainable energy use and a sustainable management were just marginally determined. Moreover, there is a lack in CSR communication and making CSR credible to public. The results make obvious that there are differences between municipal and private WSE facing sustainability requirements (Arnold and Pieper 2014). The ecological and social responsibility of a WSC depends crucially on how environmental and social challenges are addressed conceptually, institutionally and instrumentally, i.e. social learning processes are initiated and integrated into the long-term economic management (Pieper 2012). In particular, climate change and sustainability are major challenges for WSC, but are still insufficiently integrated into management processes and external communications. However, a paradigm shift from cost to sustainability and cradle-to-cradle is necessary. This includes integrated and systemic strategic management approaches. These are available, although they have not been adapted yet in the WSC comprehensively. Good approaches provide WSC having own power (regenerative) generation and a strategic approaches concerning sustainability management. This can also be found in the municipal area.
... The present study, like most prior studies, treats the implementation of sustainable procurement practices as practice spanning all product categories. However, extant research suggests that, following Kraljic's seminal matrix (Kraljic, 1983), the benefits of sustainable procurement vary by product category (Dabhilkar et al., 2016). For example, products categorized as strategic or bottleneck items may demand a higher degree of sustainability commitment than those classified as noncritical. ...
Purpose
A fundamental research question is what leads some organizations, but not others, to be sustainable in their procurement operations. Extant theoretical frameworks, while valuable, do not fully reflect the nuances of decision-making in procurement operations. We aim to illuminate the role of individual attitudes, capabilities, and behavioral intentions in actualizing sustainable procurement.
Design/methodology/approach
We develop a framework by adapting the theory of planned behavior (TPB) to the context of sustainable procurement. We test the framework with a sample of 465 procurement professionals based in the EU through partial least squares structural equation modeling.
Findings
We find that sustainable purchasing behavior is predominantly shaped by behavioral intention, that is, willingness to pay for sustainability. This behavioral intention is significantly influenced by individual attitudes and capabilities in addition to awareness of consequences and perceived corporate social responsibility engagement but, interestingly, not by individual subjective norms.
Originality/value
The TPB is one of the most influential models for predicting behavior. However, the application of the theory in operations management is hitherto limited. The present study contributes to understanding individual-level antecedents of operations management practices and offers suggestions to practitioners engaged in fostering sustainable procurement.
... The concept of supply chain management began to be used in the 80s of the last century. Kraljic (1981) argued that procurement must become supply management, while Oliver and Webber (1982) advocated raising logistics to a higher level. From these initial works, the scientific discipline of supply chain management developed. ...
The paper is based on the conceptual definition of logistics and supply chain
in agribusiness. Recently, due to the complexity of the supply process, as well
as the specifics of agricultural production, the analysis of the supply chain
in agro business is gaining importance. The paper tries to use a descriptive
method to explain the difference between logistics as a concept and the supply
chain, and to explain their role in agribusiness. In their earlier research,
many authors dealt with individual parts of the supply chain in agriculture
and agribusiness, and presented their work with the difficulties and advantages
that exist within it. The results show that logistics is a narrower concept
than the supply chain, i.e. that it represents one part of it, and that the complexity
of the process is due to the peculiarities of the agricultural products
themselves as an indispensable part of agribusiness.
... In order to perform the above analysis, portfolio analysis is the key to kick-starting the process based on their procurement volume and impact. The portfolio matrix, also known as the Kraljic matrix, is one of the popular methods among other approaches (Kraljic, 1983 Thirdly, market intelligence, technology, and substituting the products or services without compromising the fundamental requirements of the customers. Fourthly, based on the aboveconducted analysis, finalization of the potential sources, deriving the buyer-supplier preferences then finally, execution of the tender process, evaluation, supplier selection, award of the contract, and execution of the contract. ...
Procurement category management in supply chain, building on its momentum to meet the business requirements and external challenges, as a set of advanced digitized procurement processes and tools is about to come in the form of Industrial Revolution 4.0 (IR4). However, there are gaps in digitized procurement process adoption. The aim of this paper is to review literature related to procurement category management in supply chain management considering the Industrial revolution 4.0 (IR4) and provide a high-level design to suit IR4. There are recommendations and concepts incorporated to align the procurement sourcing process towards digitalization, i.e., Industry 4.0.
... e. Performance Measurement: The integration of vendor development within sourcing methodologies facilitates organizations in the establishment of performance metrics that encompass both cost efficiency and quality assurance. This comprehensive framework guarantees that sourcing decisions are not exclusively predicated upon price considerations, but also incorporate the value contributed by the vendor relationship (Kraljic, 1983). ...
In the contemporary competitive business landscape, the optimization of costs within supply chain management has surfaced as a paramount focus for organizations endeavouring to augment operational efficiency and profitability. This paper delves into the multifaceted methodologies of cost optimization by harnessing vendor development and strategic sourcing tactics. It underscores the significance of nurturing robust vendor relationships that promote collaboration, innovation, and enhanced quality, ultimately culminating in considerable cost reductions. The study further scrutinizes diverse sourcing strategies that organizations may adopt to guarantee the selection of suppliers who deliver the most advantageous overall value, taking into account aspects such as total cost of ownership and supplier dependability. Moreover, the incorporation of advanced technologies and performance metrics is addressed as indispensable instruments for refining decision-making processes and assessing the effectiveness of cost optimization initiatives. Through the adoption of a comprehensive approach to vendor development and sourcing, organizations can streamline their operations, mitigate waste, and attain sustainable cost efficiencies, thereby positioning themselves for enduring success in an increasingly intricate market environment.
... A 90-es évektől kezd a beszerzés a fejlett országok vállalatainál stratégiai szerepet betölteni. A megelőző időszakban a figyelem a tárgyalásokra, a versenyhelyzet optimalizálására, a beszerzési alkuerő lehetőség szerinti kihasználására irányult (Kraljic, 1983). A szakirodalom ennek a kereteit dolgozza fel. ...
A szerzők kutatásának középpontjában annak vizsgálata állt, hogy az üzleti életben a szervezetek beszerzéseinél az etikusság, az egyes etikai problémák hogyan változtak meg az elmúlt évek világgazdasági és ellátási problémáinak hatására. Egy korábbi felmérést ismételtek meg, majd összevetették az eredményeket. A válaszokat a kérdőív nyílt kérdéseinek vizsgálata árnyalja. Az eredmények szerint az utóbbi évek ellátási problémái, a beszerzéssel szemben jelentkező új kihívások – mint például a digitalizáció – új problémák elé állították a szakmát. A szakirodalom a tulajdonos és a beszerző, illetve a beszerző és a beszállító érdekkonfliktusa köré csoportosítva tárgyalja a problémákat, az eredmények azonban azt mutatják, hogy az etikai konfliktus az érintettek szélesebb körét érinti, s a hagyományos etikai problémák is új értelmezéseket kapnak.
... China has restricted exports of two rare metals, gallium and germanium, which are critical to semiconductor production. Kraljic (1983) highlighted the importance of managing "strategic items" within the framework of supply chain management, as shown in Figure 3. Kraljic emphasises the need to strengthen and diversify critical items. The Kraljic matrix provides a valuable tool for identifying essential items that require focused management within the supply chain. ...
Purpose
The purpose of this paper is to analyse the international political economy of Korea and its effects due to geopolitical tension between China and the USA.
Design/methodology/approach
Economic war between China and the USA has prolonged longer than expected. Aftermath of the COVID-19 pandemic, reforming the supply chain has been the centre of economic tension between China and the USA. Quite recently, with the rapid expansion of Chinese e-commerce platforms, distribution channels come upon a new economic tension between the two. And now is the time to pivot its pattern of conflict from competition into cooperation. In this end, economic diplomacy could be a useful means to give a signal of cooperation. From the view of economic diplomacy, this paper tries to analyse the projected transition of economic war between China and the USA with its implication on the trade policy of Korea.
Findings
As an implementation of economic diplomacy, China suggested the Belt and Road Initiative (BRI), enhancing trade logistics among related countries to gain competitiveness. In 2023, the Biden administration suggested the India-Middle East and Europe Economic Corridor as a counter to BRI, which will be a threshold for changing trade policy from economic war into economic diplomacy. As a result, it is expected China and the USA will expand their economic diplomacy in a way to promote economic cooperation among allied states, while the distribution channel war would continue to accelerate the economic tension between China and the USA. Korea has to prepare for and provide measures handling this geopolitical location in its trade policy or economic diplomacy.
Originality/value
This research contributes to the awareness and understanding of trade environments from the perspective of economic diplomacy.
... In recent decades, management theory has advanced in studying the strategic importance of individual operational functions such as manufacturing, IT, and logistics. Commercial PSM is now recognized as more than just the technical transaction of buying; it is strategic when designed to support an organization's purpose and performance targets (Kraljic, 1983). Applying this logic, we also recommend a strategic segmentation of PSM in the humanitarian context. ...
... Currently, research on industrial data classification primarily concentrates on methods, theories, and standards within information management and data governance. In terms of modeling and methods, Kraljic proposed the Kraljic Model [4]. He started with product classification and supplier relationship management in purchasing management and managed to divide related resource information into four dimensions for grading management according to two dimensions that impact company profit and supply risk; Flores put forward a multi-criteria ABC classification analysis model [5,6] based on ABC classification. ...
Purpose/Significance
With the extensive adoption of cloud computing, big data, artificial intelligence, the Internet of Things, and other novel information technologies in the industrial field, the data flow in industrial companies is rapidly increasing, leading to an explosion in the total volume of data. Ensuring effective data security has become a critical concern for both national and industrial entities.
Method/Process
To tackle the challenges of classification management of industrial big data, this study proposed an Information Security Triad Assessment‐Support Vector Machine (AIC‐ASVM) model according to information security principles. Building on national policy requirements, FIPS 199 standards, and the ABC grading method, a comprehensive classification framework for industrial data, termed “two‐layer classification, three‐dimensional grading,” was developed. By integrating the concept of Data Protection Impact Assessment (DPIA) from the GDPR, the classification of large industrial data sets was accomplished using a Support Vector Machine (SVM) algorithm.
Result/Conclusion
Simulations conducted using MATLAB yielded a classification accuracy of 96.67%. Furthermore, comparisons with decision tree and random forest models demonstrated that AIC‐ASVM outperforms these alternatives, significantly improving the efficiency of big data classification and the quality of security management.
... To address two-dimensional classification challenges, Kraljic's model employs profit impact and supply risk to represent item segmentation and analyse the purchasing portfolio. Managers have applied a similar approach for supplier and customer segmentation based on their main characteristics, generating a matrix with four areas, as well as recommendations and best actions for each group [21][22][23]. Segura and Maroto [14] and Casas-Rosal et al. [19] propose a classification method based on PROMETHEE net flows to assign suppliers and customers into four quadrants formed by two multicriteria dimensions, which in this research is designated as the global search. In the first two approaches, there is a also comparison with the Multi-Attribute Utility Theory (MAUT) method. ...
Since Kraljic’s strategic matrix was applied to supply chain management, classification of items, suppliers, and customers has become of increasing interest to research and companies. The aim of this research is to develop an easily interpretable multicriteria classification matrix method and validate it in real-world scenarios with a robustness analysis. This method assigns alternatives to one of four classes defined by critical dimensions that integrate several evaluation criteria. Initially, a global search pre-classifies the alternatives using the PROMETHEE net flows. Then, two local searches are carried out that make use of the discriminant properties of the net flow signs to improve the quality of the assignments. This approach is specifically applied to pre-classified alternatives near the boundary between two or more categories. The method has been validated by segmenting thousands of customers. Four customer segments were identified: strategic, collaborative, transactional, and non-preferred. A comparison was made between the results and those derived from an alternative method. Through an extensive sensitivity analysis, the proposed method was shown to be robust to parameter variation, highlighting its reliability in real dynamic contexts. The method provides valuable, easily interpretable information, which constitutes the basis for developing personalised strategies to enhance customer relationship management.
... Third, future research may focus on the types of categories of supply that must be managed during NPD. For example, such research could explore the usefulness of the strategic sourcing approaches discussed in this study for distinct categories of items or services, which can differ in terms of their technical uncertainty (Eisenhardt and Tabrizi 1995), innovativeness (Fisher 1997), impact on the bottom line and associated supply risk (Kraljic 1983), or impact on both the commercial and operational goals of the organization (Cox 2015). Fourth, future research may provide a longitudinal understanding of how strategic sourcing unfolds in the NPD processes of ETO manufacturers. ...
Since supplier capabilities often are essential for the success of a new product, previous studies suggest manufacturers to integrate strategic sourcing into the early stages of their new product development (NPD) processes. However, the literature on this topic offers only limited guidance for manufacturers in the engineer-to-order (ETO) context, where late strategic sourcing can be inevitable due to, for example, uncertainty or changing customer requirements. To address this gap in the literature, this article first draws on the literature to conceptualize five distinct strategic sourcing approaches that ETO manufacturers can employ. The approaches differ in terms of the timing of three strategic sourcing activities during the NPD process: make-or-buy analysis, supplier selection and supplier collaboration. To investigate the approaches, we conducted an embedded single case study involving a large turbine manufacturer. The study supports the existence of all the strategic sourcing approaches and identifies distinct conditions associated with each of them. Thereby, this article extends the literature with additional clarity about strategic sourcing in the ETO context, as well as when different approaches occur.
The procurement function has undergone a remarkable transformation over the past 175 years, evolving from a basic administrative task focused on purchasing goods to a sophisticated strategic business function that drives competitive advantage. This article traces the historical development of procurement from the Industrial Revolution era to the digital age, examining how technological advances, economic pressures, and changing business paradigms have reshaped the role of procurement professionals. Through analysis of key evolutionary phases, we demonstrate how procurement has transitioned from a cost-focused, transactional activity to a value-creating, strategic discipline that influences supply chain resilience, sustainability, and innovation. The research reveals that modern procurement professionals now serve as strategic partners who contribute directly to organizational success through risk management, supplier relationship management, and digital transformation initiatives.
Supply chains, which have numerous participants, are exposed and vulnerable. In recent years, this has been evident in disruptions caused by circumstances that have changed the context, such as (1) the COVID-19 pandemic, (2) the Suez Canal blockade, and (3) the war in Ukraine. These circumstances caused disruptions in supply chains and surprised numerous participants in the international market, individual organizations, as well as states and entities around the world. This caused confusion and large financial losses for numerous global market participants and for people all around the world. The purpose of this paper is to design three original models, the implementation of which should significantly reduce the damage caused by disruptions in supply chains in future crises: (1) a model for individual organizations, (2) a national economy model, and (3) a global model. The authors applied methods of scientific cognition and analyzed three case studies from the recent past. The key finding is that by applying the models with four components (methods, measures, quality tools, and indicators), the resilience of supply chains increases the damage from disruptions in supply chains during future crises can be significantly reduced, and the quality of life of everyone on the planet will be less threatened.
In today’s rapidly evolving business landscape, large organizations face the dual challenge of sustaining innovation while optimizing a diverse range of products and services. This research paper explores the development and implementation of effective product portfolio planning strategies, providing a comprehensive framework that integrates strategic management principles with practical approaches to enhance organizational performance. The study begins by examining contemporary theories and models of portfolio management, identifying key factors such as market dynamics, technological advancements, and evolving consumer preferences that influence product strategy decisions. Through a combination of qualitative case studies and quantitative analyses, this research investigates how strategic alignment, efficient resource allocation, and robust risk management contribute to the creation of resilient ortfolios that support both short-term profitability and long-term growth.
The many researches have been analyzing the purchasing concepts and modern terminology. Moreover, it is obvious that there are differences between all companies. No one can follow same strategy, has same financial status and reputation among its customers even by producing product of same specifications and quality. That is why many companies are ready to pay much more money, put more effort and time to improve the purchasing process, evaluate in advance suppliers and all possible risks. In addition, in different companies the actual supplier selection can run in a different way. While for some product it can be a simple record of actions where every step of the formal process may not be required, for another product it can change into a highly complex framework where every step is regulated by professionals. The actual process of supplier selection belongs to procurement strategic decision but in simpler way it can be also performed by purchasing department as automated steps.
With today’s extensive outsourcing practices, the role of supplier relationship management (SRM) in supply chain management (SCM) has never been more critical. This study investigates the use of machine learning (ML) techniques to enhance supplier segmentation in large-scale enterprises (LSEs). Supervised ML algorithms, including boosting, decision trees (DT), k-nearest neighbors (KNN), random forest (RF), and support vector machines (SVM), were applied to a dataset of 32,089 purchase orders from ABC, a large-scale enterprise. The random forest algorithm demonstrated the highest performance, with an AUC score of 99.6% and precision of 97.8%, indicating its robustness for supplier classification. The study’s key findings underscore how ML-driven segmentation improves procurement decision-making, enabling more accurate supplier categorization, which in turn optimizes resource allocation and strengthens SRM practices. These insights position ABC as a leader in adopting ML for supply chain management, offering a scalable and efficient solution to supplier segmentation.
The disruptions in the supply chain occur due to several factors like a global tender, local tender or the vendor's failure to deliver in time (Berger et al 2004). There are a number of original equipment manufacturers (OEM) who have been traditionally producing all the required parts in house. This problem has, therefore, given way to outsourcing of major producing activities instead of producing all the items in house. This has led to the problem of having a number of vendors for an efficient functioning of the organization. The improvement in vendor performance and vendor-producer relationships has provided number of opportunities for cost reduction and the performance of supply chain. The key to the problem lies in having long term relationships with reliable vendors as any failure of vendor in fulfilling the commitment may have serious repercussions on production schedule.
This study investigates the role of power dynamics in market control within supplier-buyer relationships, with a specific focus on blockchain technology adoption in supply chain networks. Using five focus group discussions, comprising of diverse participants categorized by sector, location, gender, and company size, the research explores how power influences decision-making processes. Findings reveal that larger companies often prioritize stability over innovation, limiting their willingness to adopt disruptive technologies like blockchain. In contrast, smaller firms demonstrate greater flexibility and openness to change. Beyond company size, factors such as product uniqueness, strategic network positions, and the personalities of decision-makers play critical roles in shaping blockchain adoption. Participants also reported persistent pressure from both suppliers and buyers to accept unfavorable terms, underscoring power imbalances that constrain smaller players. The analysis is framed within the conceptual structure of a model with a focus on the nuanced interplay of power and decision-making in the context of supply networks. Qualitative analysis of the discussions, conducted with Atlas.ti software, highlights the influence of sectoral differences, geographical variations, and gender dynamics in supply chain negotiations. This study provides valuable insights into the barriers and enablers of blockchain adoption within complex supply chain networks, emphasizing the critical interplay of power and communication in shaping market control.
Leading humanitarian organisations strive to enhance the sustainability of their aid to avoid negative impacts on the environment, economy, and society, particularly in low‐resource areas. This study explores how the circularity and sustainability of emergency hospital shelters can be assessed using literature, expert interviews, co‐creation and design sessions, and pilot testing. The approach combines a qualitative circularity checklist with a quantitative environmental impact assessment, providing valuable input for informed decision‐making during procurement and design. The findings reveal that existing buildings are commonly repurposed before importing emergency hospital shelters—finite virgin materials are primarily used for the production of new shelters—and there is a lack of data with which to reflect on end‐of‐life scenarios. The study recommends enhanced monitoring of the shelter lifecycle through data collection as an input for continuous improvement procedures of design and supply. Crucial are extended stakeholder responsibilities for the entire lifecycle and sector‐wide adoption of circularity and sustainability ambitions, mainstreaming approaches and showcasing benefits.
This chapter establishes the foundational concepts of Supply Chain Risk Management (SCRM), focusing on risks arising from natural disasters. It clarifies the distinctions between risk and uncertainty, emphasising their critical roles in supply chain disruptions. The chapter explores both upside and downside risks, integrating perspectives from decision theory and finance, while addressing the debate between objective and subjective risk assessments. Positioned within the broader field of Supply Chain Management, this chapter traces the evolution of SCRM from firm-level concerns to a holistic, supply chain-wide approach. By providing a detailed typology of supply chain risks and disruptions, it offers essential insights for understanding the impact of disasters on firm performance, setting the stage for deeper exploration in subsequent chapters.
The concept of risk in managerial economics encompasses various unexpected events such as natural disasters, risk, economic challenges, uncertainty or product failures that lead to undesirable outcomes. Risk arises from incomplete information about future events, which makes the results unpredictable. The inherent uncertainty of the future because of the unpredictable nature of the universe, further complicates the understanding and management of risk. Scientific uncertainty, defined as any deviation from complete determinism, illustrates the difficulty in clearly defining risk. Sometimes managerial economics explores risk through its two primary dimensions, highlighting its complexity and the challenges it presents to decision-makers.
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