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From Company Strategy to Purchasing Strategy to Commodity Strategy

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Kraljic Model
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Koen Vandermarliere
Business Consultant, Belgium

From Company Strategy to Purchasing Strategy to Commodity Strategy

The purchasing department is an important department in the company. As such it is a logical question to the Purchasing manager/director to define his purchasing strategy and communicate this to the board. What information is needed to build such a strategy?
Just like any departmental (functional) strategy the start is from the COMPANY STRATEGY, and vision. Purchasing is a supporting department and needs to support the primary goal of the company: supplying a product or service to paying customers.
Once you clearly know what way the company will go, you can define how the purchasing department will contribute. Examples can be cost reduction, innovation, limitation of risks...
Based on that direction you can define your PURCHASING STRATEGY towards securing supply, cost based re-engineering, Sourcing of new suppliers or techniques... This can imply different strategies for different material types. For example a company could be looking for pure cost reduction on Indirect purchasing and innovation on certain products in direct purchasing while for others securing supply is the main strategy.
Based on these directions set out in the purchasing strategy, the commodity owners can start to develop their COMMODITY STRATEGY. This commodity strategy will be the key to the development of the vendor management strategy for individual vendors or product strategy for products.
Every step and every level of strategy definition should be set up with the input of the relevant level of the internal Customer. This is sometimes forgotten in larger companies where staff services have the "ivory tower" view of things. The risk to do the right things on the wrong moments or to do simply the wrong things is the realistic.
And as that is contra productive it is not what we want to happen. This is why it can be important to look at a company like if it would be a small family business: First define the primary goal; what is it that the company does and makes money with? Then define the responsibilities of all supporting services and their direct links to the primary goal. The closer these are to that primary goal, the more critical they are to the company.
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More on Kraljic Model:
Summary
Discussion Topics
topic Examples of the 4 Product Categories of Kraljic
topic Public Procurement Process
topic What is Purchase Marketing?
topic Beyond the Steady State
topic Sustainability Criteria in Purchasing Strategy
topic Types of E-Procurement Tools
topic E-Procurement Strategy per Category
topic Buygrid Framework (Robinson)
topic Controlling the Supply Chain in an Unstable Environment
topic Factors to Analyse a Purchasing Portfolio Beyond those in the Kraljic Model
topic Rate Contract versus System Contract
topic Software Procurement & Automotive SPICE
topic Tips on Managing a Procurement Department
topic Generic Purchasing-Decision Model
🔥 Kraljic Model for Similar Product Comparison
topic Strategic Process for Global Sourcing
topic Backward Integration in Procurement Positioning Matrix
topic Collaboration Styles of Purchasing Managers
topic Extensive Bargaining in Procurement Positioning Matrix
👀From Company Strategy to Purchasing Strategy to Commodity Strategy
topic Procurement Outsourcing in Procurement Positioning Matrix
topic Product Re-engineering in Procurement Positioning Matrix
topic Criteria for Supplier Categorization
topic Dominant Purchasing Factor: Quality or Price?
topic Best Value Performance Information Procurement System (Best Value PIPS)
topic Kraljic Template & Manual
topic The TIME Factor in Procurement and Logistics Negotiations
topic Dealing with a Unique Supplier While You Don't Have Negotiation Power
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More on Kraljic Model:
Summary
Discussion Topics
topic Examples of the 4 Product Categories of Kraljic
topic Public Procurement Process
topic What is Purchase Marketing?
topic Beyond the Steady State
topic Sustainability Criteria in Purchasing Strategy
topic Types of E-Procurement Tools
topic E-Procurement Strategy per Category
topic Buygrid Framework (Robinson)
topic Controlling the Supply Chain in an Unstable Environment
topic Factors to Analyse a Purchasing Portfolio Beyond those in the Kraljic Model
topic Rate Contract versus System Contract
topic Software Procurement & Automotive SPICE
topic Tips on Managing a Procurement Department
topic Generic Purchasing-Decision Model
🔥 Kraljic Model for Similar Product Comparison
topic Strategic Process for Global Sourcing
topic Backward Integration in Procurement Positioning Matrix
topic Collaboration Styles of Purchasing Managers
topic Extensive Bargaining in Procurement Positioning Matrix
👀From Company Strategy to Purchasing Strategy to Commodity Strategy
topic Procurement Outsourcing in Procurement Positioning Matrix
topic Product Re-engineering in Procurement Positioning Matrix
topic Criteria for Supplier Categorization
topic Dominant Purchasing Factor: Quality or Price?
topic Best Value Performance Information Procurement System (Best Value PIPS)
topic Kraljic Template & Manual
topic The TIME Factor in Procurement and Logistics Negotiations
topic Dealing with a Unique Supplier While You Don't Have Negotiation Power
Special Interest Group

SIG Leader

Do you know a lot about Kraljic Model? Become our SIG Leader

Knowledge Center

Kraljic Model
Knowledge Center



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