The strategic procurement of raw material: a case study
by Sanjita Jaipuria; Mamata Jenamani; M. Ramkumar
International Journal of Procurement Management (IJPM), Vol. 9, No. 5, 2016

Abstract: Strategic procurement is essential to ensure uninterrupted availability of raw material at a competitive cost for the smooth production operation. Kraljic's purchasing portfolio model is widely used in strategic procurement practice. However, hardly any quantitative model has been discussed in existing literature to develop Kraljic's sourcing matrix. Hence, in this study a quantitative approach has been proposed to develop Kraljic's sourcing matrix. Many times the market condition affects the procurement activity. The total procurement cost generally comprises of different cost components and through adopting strategic approach the controllable cost components can be reduced. Therefore, including Kraljic's purchasing portfolio model, two techniques such as spend analysis and market analysis is applied to identify the strategic issues based on the cost structure and market condition. In this study the framework to develop procurement strategy using spend analysis, Kraljic's purchasing portfolio model, and market analysis is described through a case study.

Online publication date: Thu, 01-Sep-2016

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