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Criteria of Kraljic's Purchasing Portfolio Matrix
Dear All,
For my PhD project, I am trying to determine which criteria and factors should be included for two dimensions of well-known Kraljic's Purchasing Portfolio Matrix. The ones I have collected so far from the original Kraljic’s article (marked with *) and also from other sources are listed below with no order of importance. I appreciate your comments on proposed criteria and also any other extra criteria you may suggest with a short explanation. Thank you in advance.
STRATEGIC IMPORTANCE OF PURCHASING (or IMPACT ON PROFIT)
• Volume/monetary value of purchases (*)
• Percentage to total purchase cost (*)
• Switching costs (*)
• Impact on end product quality/reliability (*)
• Impact on business growth (*)
• Impact on competitiveness
• Additional value on product differentiation
• Impact on production or supply network continuity
COMPLEXITY OF SUPPLY MARKET (or SUPPLY RISK)
• Product availability/scarcity (*)
• Number of suppliers (*)
• Entry barriers for new suppliers (*)
• Storage risks (*)
• Competitive demand (*)
• Rate of technological advances (*)
• Product substitution possibilities (*)
• Make-or-buy opportunities (*)
• Supplier substitution possibilities
• Price volatility
• Cost structure complexity
• Environmental risks
• Legal requirements
• International trade risks
• The complexity of supply network at Tier 2 and Tier 3 level