Handling measurement issues and strategic directions in Kraljic's purchasing portfolio model

Abstract

Kraljic's purchasing portfolio model, which was introduced in 1983, still is the dominant approach in the profession. Contrary to the growing use of the Kraljic matrix, there are problems and unanswered questions with respect to measurement and strategic issues. Based on explorative case studies, the critique of Kraljic's model has been disputed and refuted to a large extent. This study describes the solutions of experienced practitioners to the problems which have been put forward in literature. The case studies point out which measurement methods are possible and which supplier strategies are feasible, including additional strategic movements of commodities within the matrix. The research findings indicate that there is no simple, standardized blue print for the application of the portfolio analysis. It requires reflecting on results, critical thinking and sophistication of purchasing management. © 2003 Elsevier Ltd. All rights reserved.