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Assessing suppliers for strategic integration: a portfolio approach

Author

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  • Alessandro Brun
  • Margherita Pero

Abstract

Since Kraljic's (1983) seminal work, purchasing departments in the most successful organisations adopted portfolio approaches to supplier management. However these models fail to consider final market demand and price volatility, thus leading buyers to establish with suppliers long-term relationships also when the investments are not properly rewarded. Moreover, portfolio approaches provides high level guidelines seldom integrated with operative tools such as vendor rating systems. This paper presents a new portfolio model that, taking into account final market features, indicates both the level of right buyer-supplier integration and the evaluation parameters to assess when choosing the supplier for that relationship. Expert interviews and a case study have been performed to test the proposed model. The results indicate that, for high supply market risk, strategic product must be purchased with different strategies depending on the difficulty of the downstream market. Moreover, different parameters should be assessed depending on the strategy adopted.

Suggested Citation

  • Alessandro Brun & Margherita Pero, 2011. "Assessing suppliers for strategic integration: a portfolio approach," International Journal of Business Excellence, Inderscience Enterprises Ltd, vol. 4(3), pages 346-370.
    • Handle: RePEc:ids:ijbexc:v:4:y:2011:i:3:p:346-370
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    Cited by:

    1. Jafar Rezaei & Miłosz Kadziński & Chrysoula Vana & Lori Tavasszy, 2022. "Embedding carbon impact assessment in multi-criteria supplier segmentation using ELECTRE TRI-rC," Annals of Operations Research, Springer, vol. 312(2), pages 1445-1467, May.

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