12 November 2020 5 8K Report

Dear All,

For my PhD project, I am trying to determine which criteria and factors should be included for two dimensions of Kraljic's Purchasing Portfolio Matrix well-known in the procurement world. 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

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