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Integrating skills profiling and purchasing portfolio management: An opportunity for building purchasing capability

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  • Knight, Louise
  • Tu, Yi-Hsi
  • Preston, Jude

Abstract

Kraljic's (1983) purchasing portfolio approach holds that different types of purchases need different sourcing strategies, underpinned by distinct sets of resources and practices. The approach is widely deployed in business and extensively researched, and yet little research has been conducted on how knowledge and skills vary across a portfolio of purchases. This study extends the body of knowledge on purchasing portfolio management, and its application in the strategic development of purchasing in an organization, and on human resource management in the purchasing function. A novel approach to profiling purchasing skills is proposed, which is well suited to dynamic environments which require flexibility. In a survey, experienced purchasing personnel described a specific purchase and profiled the skills required for effective performance in purchasing that item. Purchases were categorized according to their importance to the organization (internally-oriented evaluation of cost and production factors) and to the supply market (externally-oriented evaluation of commercial risk and uncertainty). Through cluster analysis three key types of purchase situations were identified. The skills required for effective purchasing vary significantly across the three clusters (for 22 skills, p<0.01). Prior research shows that global organizations use the purchasing portfolio approach to develop sourcing strategies, but also aggregate analyses to inform the design of purchasing arrangements (local vs global) and to develop their improvement plans. Such organizations would also benefit from profiling skills by purchase type. We demonstrate how the survey can be adapted to provide a management tool for global firms seeking to improve procurement capability, flexibility and performance.

Suggested Citation

  • Knight, Louise & Tu, Yi-Hsi & Preston, Jude, 2014. "Integrating skills profiling and purchasing portfolio management: An opportunity for building purchasing capability," International Journal of Production Economics, Elsevier, vol. 147(PB), pages 271-283.
  • Handle: RePEc:eee:proeco:v:147:y:2014:i:pb:p:271-283
    DOI: 10.1016/j.ijpe.2013.06.013
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    References listed on IDEAS

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    1. Trautmann, Gerhard & Bals, Lydia & Hartmann, Evi, 2009. "Global sourcing in integrated network structures: The case of hybrid purchasing organizations," Journal of International Management, Elsevier, vol. 15(2), pages 194-208, June.
    2. Chow, Wing S. & Madu, Christian N. & Kuei, Chu-Hua & Lu, Min H. & Lin, Chinho & Tseng, Hojung, 2008. "Supply chain management in the US and Taiwan: An empirical study," Omega, Elsevier, vol. 36(5), pages 665-679, October.
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    Cited by:

    1. Hesping, Frank Henrik & Schiele, Holger, 2016. "Matching tactical sourcing levers with the Kraljič matrix: Empirical evidence on purchasing portfolios," International Journal of Production Economics, Elsevier, vol. 177(C), pages 101-117.
    2. Sylvie Crouzet, 2022. "Train your buyers in the hidden cost method! For a purchasing cost that incorporates evaluation of the impact of purchasing-related dysfunctions [Formez vos acheteurs à la méthode des coûts-perform," Post-Print hal-04223281, HAL.
    3. Jayani Ishara Sudusinghe & Stefan Seuring, 2020. "Social Sustainability Empowering the Economic Sustainability in the Global Apparel Supply Chain," Sustainability, MDPI, vol. 12(7), pages 1-18, March.
    4. Delke, Vincent & Schiele, Holger & Buchholz, Wolfgang & Kelly, Stephen, 2023. "Implementing Industry 4.0 technologies: Future roles in purchasing and supply management," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
    5. Philip Beske-Janssen & Thomas Johnsen & François Constant & Andreas Wieland, 2023. "New competences enhancing Procurement’s contribution to innovation and sustainability [De nouvelles compétences renforçant la contribution des achats à l'innovation et au développement durable]," Post-Print hal-04191381, HAL.
    6. Nudurupati, Sai Sudhakar & Bhattacharya, Arijit & Lascelles, David & Caton, Nicholas, 2015. "Strategic sourcing with multi-stakeholders through value co-creation: An evidence from global health care company," International Journal of Production Economics, Elsevier, vol. 166(C), pages 248-257.
    7. Visani, Franco & Boccali, Filippo, 2020. "Purchasing price assessment of leverage items: A Data Envelopment Analysis approach," International Journal of Production Economics, Elsevier, vol. 223(C).
    8. Pekkanen, Petra & Niemi, Petri & Puolakka, Tiina & Pirttilä, Timo & Huiskonen, Janne, 2020. "Building integration skills in supply chain and operations management study programs," International Journal of Production Economics, Elsevier, vol. 225(C).
    9. Abdelkader Daghfous & Omar Belkhodja, 2019. "Managing Talent Loss in the Procurement Function: Insights from the Hospitality Industry," Sustainability, MDPI, vol. 11(23), pages 1-19, November.
    10. Smith, Katherine Taken & Betts, Teresa, 2015. "Your company may unwittingly be conducting business with human traffickers: How can you prevent this?," Business Horizons, Elsevier, vol. 58(2), pages 225-234.
    11. Heike Schulze & Lydia Bals & Jon Warwick, 2022. "A sustainable sourcing competence model for purchasing and supply management professionals," Operations Management Research, Springer, vol. 15(3), pages 1418-1444, December.

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