The Kraljic Purchasing Portfolio Model

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The Kraljic purchasing portfolio model, first introduced via Harvard business review in 1983 enables a company to manage their purchasing department process and how resources deal with the procurement process.

The model has initiated plenty of discussion and research in the intervening period. These include not seeing the procurement process from the supplier’s perspective. Various literatures have been produced to deal with the theories put forward in order to further expand methodologies when dealing with procurement strategies. These have found that, in particular, the matrix did not take into account power imbalance during the supply process. Another dimension can be incorporated, taking into account the balance of power between buyers and sellers. This forms an important element in the overall strategy to procure suppliers.

This review has focussed on the theories and solutions put forward by practitioners with a wealth of experience. There appears to be no standardised methodology for the management of procurement processes. Organisations must manage relationships effectively and incorporate up to date procurement systems to achieve organisational goals. It must be recognised that power is a two
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It is clear that in order for buyers and suppliers to be successful, then mutually beneficial relationships and strategies need to be pursued. The Kraljic model can immediately identify where the balance of power resides in any potential procurement situation. When this is identified at an early stage it can help in implementing strategies to overcome any imbalance issues that may hinder organisational goals. Research from companies appears to show that the method should be used as a broad tool for procurement purposes rather than a definitive and final

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