A purchasing portfolio model for humanitarian supply chain resilience: perspectives from a development aid context

Abstract

PurposeThe impact of supply disruptions from unplanned events can cause goods shortage, limited responsiveness and high opportunity cost thus compromising development aid programmes' achievement targets. These situations force humanitarian aid agencies to develop new strategies for effectively managing their supplies. The purpose of this paper is to illustrate the foundation of humanitarian supply chain resilience through the development of an adapted Kraljic portfolio model.Design/methodology/approachAction research was used to adapt and validate the Kraljic portfolio model to the development aid context. The research team worked with a humanitarian aid agency in developing criterions and used Analytical Hierarchical Process (AHP) in weighting those key criterions.FindingsThe adapted portfolio model was able to evaluate purchases done by the aid agency by incorporating different perspectives related to the strategic importance of purchase and supply vulnerability. In particular, development aid programmes require large supplies annually. Better classification offers improved visualisation of purchases, leading to a more precise adoption of mitigation strategies and policies to minimise supply disruption risks.Research limitations/implicationsAdapting the Kraljic portfolio model is a stepping-stone to building humanitarian supply chain resilience. The proposed humanitarian supply chain resilience framework is based on the foundation that current humanitarian supply chain needs to be re-engineered. In order to re-engineer, the supply base strategy must first be revisited.Practical implicationsMany aid agencies do not have a holistic view on their purchases and commonly apply a transactional classification of purchases that only considers the consumption values. Purchasing strategies mostly focus on cost minimisation, whereas risk mitigations have been disregarded. The proposed portfolio model overcomes these drawbacks. Societal impact may be limited but development aid agencies will be able to offer more reliable aid delivery as part of their mandate.Originality/valueThe proposed portfolio model is among the first tool to guide humanitarian aid agencies to develop procurement strategies to alleviate supply disruptions and increase development aid programmes resilience.

Assessing the value of supply chain management in the humanitarian context – An evidence-based research approach

“…Enhancing and professionalizing procurement skills of staff, gaining a better understanding of (local) markets, and improving relationships with suppliers, e.g. through framework agreements and pooling of procurement efforts between organizations, are some of the strategies humanitarian actors could invest in (Gossler et al, 2019;Bhusiri et al, 2021;Wankm€ uller and Reiner, 2021). One interesting case study in this context is the program that HELP Logistics and the Chartered Institute of Procurement and Supply (CIPS) set up for the Philippine Red Cross (PRC) in 2019 as part of a larger preparedness investment initiative (IFRC, 2021).…”

“…through framework agreements and pooling of procurement efforts between organizations, are some of the strategies humanitarian actors could invest in (Gossler et al. , 2019; Bhusiri et al. , 2021; Wankmüller and Reiner, 2021).…”

Social equity in federal contracting during emergencies: A portfolio management perspective

“…These results are novel and enrich the discussion about how equity in government contracting should be ensured (Smith & Fernandez, 2010). They also advance the use of portfolio management theory in public procurement (Tip et al, 2022) and integrate diversity and equity considerations in procurement and contracting strategies, which previous theoretical and empirical applications had neglected (e.g., Bhusiri et al, 2021; da Silva Lamenza et al, 2019; Ekström et al, 2021; Luzzini et al, 2012).…”

“…The private supply chain management literature has proposed several models (Luzzini et al, 2012), with the Kraljic purchasing portfolio receiving the most attention. According to Kraljic (1983), procurement strategies for different items vary according to the “strategic importance of the purchase” and their level of “supply risk.” While this model was originally designed for procurement in the private sector, the limited number of recent works that use a portfolio approach in the context of public procurement uses the Kraljic model (and these two dimensions) as the reference framework (Bhusiri et al, 2021; da Silva Lamenza et al, 2019; Ekström et al, 2021; Tip et al, 2022).…”

National IoMT platform strategy portfolio decision model under the COVID-19 environment: based on the financial and non-financial value view

“…The popularity of emerging digital technologies has provided solutions in the fight against the unprecedented COVID-19 pandemic and contributed to increasing the efficiency of humanitarian supply chain operation processes (Bhusiri et al, 2021 ; Marić et al, 2021 ; Queiroz & Wamba, 2021 ). The Taiwan government used numerous information systems at the beginning of COVID-19 to control the pandemic, used these information systems to maintain medical resources in 2020, and used them again to fight the second wave of the COVID-19 pandemic.…”