Factors to Analyse a Purchasing Portfolio Beyond those in the Kraljic Model

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Factors to Analyse a Purchasing Portfolio Beyond those in the Kraljic Model
Gaurav Pala, Manager, India

Dear all, as written in the summary of the Kraljic Model, if we need to analyze our purchasing portfolio, we can use this model to help us consider 2 interrelated factors which are crucial in drafting a purchasing strategy:
- Profit Impact
- Supply Risk
But what other factors can be relevant to analyze our purchasing portfolio and come up with purchasing strategies?

Additional Factors or Dimensions in Purchasing Beyond Kraljic Portfolio Model
Julius Muriuki, Consultant, Kenya
3 more dimensions could be:
- Supplier Relationships Management (SRM)
- Corporate Social Responsibility (CSR)
- Outsourcing or subcontracting.

Additional Procurement Factors Beyond Kraljic
Jose Blauw, Manager, Netherlands
Consider the QLTC methodology, also known as value sourcing, developed in the hi-tech industry (ASML). This system measures and classifies your suppliers on max. 50 indicators with the intention to improve the cooperation between your company and the supplier to develop both to world class organizations.
QLTC stands for Quality, Lead time, Technology and Costs. Not all indicators need to be implemented. For more info, see these downloads on value sourcing.

Additional Purchasing Factors Beyond Kraljic
Koen Vandermarliere, Business Consultant, Belgium
I usually do a Porter analysis on the commodity, vendor and product level. This means that I review 5 area's that impact that commodity:
Competition: Depending on the existence (or lack) of competition in the market, your purchasing approach will be different.
Newcomers: How easy is it to start in this market and become a competitor? This might impact your decision regarding the terms of your agreement.
Substitution: What are the possibilities to substitute the product by another one?
Customers: What are the other customers doing, who are they, are you a big fish or a small fish in the sea? Is their demand growing or decreasing?
Suppliers: How is the supply chain set up, are raw material abundant or scarce...
All these points will have an impact on the position that you can take when setting up your strategy for a commodity, a product or even a vendor.
Kind regards,


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Koen Vandermarliere
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