A purchasing portfolio model for the commercial construction industry: a case study in a mega mall

Ghanbarizadeh, Arad; Heydari, Jafar; Razmi, Jafar; Bozorgi-Amiri, Ali

doi:10.1080/09537287.2019.1612110

Cited by 20 publications

(8 citation statements)

References 48 publications

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“…There exist some quantitative studies that have attempted to quantify the axis e.g. Ghanbarizadeh et al (2019). Nonetheless, the primary purpose of the Kraljic matrix is to serve as a tool for discussing the relative positioning and strategy for products and services and not as an exact measure of purchasing.…”

Section: Purchasing Modelsmentioning

confidence: 99%

“…The Kraljic matrix has been applied to the construction context before, however, mostly through quantitative studies and with its original axes: strategic impact and supply risk. For example, Ghanbarizadeh et al (2019) investigated commercial construction DEMATEL-ANP-VIKOR hybrid technique to weigh factors that quantifies the axes. Ferreira et al (2015) and Arantes et al (2014) applied the Kraljic matrix to the construction industry using AHP and multidimensional scaling.…”

Section: Introductionmentioning

confidence: 99%

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A project-based purchasing portfolio matrix applied to the Australian construction industry

Bildsten

2021

SN Bus Econ

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For a project to be delivered on-time and to an agreed cost in accordance with the specification, it is important to have an appropriate purchasing strategy. A project succeeds due to many factors, one of which is cost alongside timely delivery and quality. Formal purchasing strategies for different purchasing categories are common in the manufacturing industry, but less so in a project-based industry such as construction. The paper argues that purchasing strategies suited to the project-based nature of construction would improve project delivery and other success factors. The purpose of this study is to determine if a matrix could assist companies in the project-based industry to formulating their purchasing strategies. Case studies of five Australian construction companies’ purchasing practises were undertaken to support this work. There is evidence that, to remain competitive, it is necessary for companies to develop a network of well-established relationships with suppliers and subcontractors. Purchasing strategies need to be adapted to each purchasing situation as projects are rarely, if ever, the same. It is necessary, therefore, to adopt an approach that combines the best commercial deal and most effective collaboration.

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Section: Purchasing Modelsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

A project-based purchasing portfolio matrix applied to the Australian construction industry

Bildsten

2021

SN Bus Econ

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“…The most popularly applied portfolio model is the Kraljic (1983) model, also known as the Kraljic matrix. Several different purchasing portfolio models have been developed based on the Kraljic matrix (Olsen and Ellram, 1997; Drake et al , 2013; Segura and Maroto, 2017; Ghanbarizadeh et al , 2019). For example, Ferreira (2014) applied it in civil construction, Ghanbarizadeh et al (2019) in commercial construction and Medeiros and Ferreira (2018) in health care.…”

Section: Theory: Kraljic Matrix and Factor Market Rivalry Framework A...mentioning

confidence: 99%

“…The most frequently used model to capture this differentiation is the 2 × 2 Kraljic portfolio model (Kraljic, 1983). It categorizes products based on the profit impact (low/high) and supply risk (low/high) to deduce sourcing strategies, tactical recommendations and purchasing activities (Caniels and Gelderman, 2005; Van Weele, 2010; Kang et al , 2018; Garzon et al , 2019; Ghanbarizadeh et al , 2019). However, the matrix’s effectiveness in a hospital setting remains debatable, especially during pandemics.…”

Section: Introductionmentioning

confidence: 99%

A Kraljic and competitive rivalry perspective on hospital procurement during a pandemic (COVID-19): a Dutch case study

Tip

Vos

Peters

et al. 2021

JOPP

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Purpose Procurement professionals widely use purchasing portfolio models to tailor purchasing strategies to different product groups’ needs. However, the application of these approaches in hospitals and the impact of a pandemic shock remain largely unknown. This paper aims to assess hospital purchasers’ procurement strategies during the COVID-19 pandemic, the effects of factor-market rivalry (FMR) on strategies and the effectiveness of purchasing portfolio categorizations in this situation. Design/methodology/approach This qualitative study of hospital purchasing in the Netherlands is supported by secondary data from official government publications. Semi-structured interviews were conducted with 13 hospital purchasers at large hospitals. An interpretative approach is used to analyze the interviews and present the results. Findings The findings reveal that product scarcity forces purchasers to treat them as (temporary) bottleneck items at the hospital level. The strategies adopted largely aligned with expected behavior based on Kraljic’s commodity management model. Adding the FMR perspective to the model helped to further cluster crisis strategies into meaningful categories. Besides inventory management, increasing supply, reducing demand and increasing resource coordination were the other common strategies. An important finding is that purchasers and governments serve as gatekeepers in channeling FMR, thereby reducing potential harmful competition between and within hospitals. Social implications The devastating experience of the COVID-19 pandemic is unveiling critical weaknesses of public health-care provision in times of crisis. This study assesses the strategies hospital purchasers apply to counteract shortages in the supply chain. The findings of this study emphasize the importance of gatekeepers in times of crisis and present strategies purchasers can take to assure the supply of resources. Originality/value No research has been conducted on purchasing portfolio models and FMR implications for hospitals during pandemics. Therefore, the authors offer several insights: increasing the supply risk creates temporary bottleneck strategies, letting purchasers adopt a short-term perspective and emphasizing the high mobility of commodities in the Kraljic commodity matrix. Additionally, despite more collaboration uncovered in other studies regarding COVID-19, strong rivalry arose at the beginning of the pandemic, leading to increased competition and less collaboration. Given such increased FMR, procurement managers and governments become important gatekeepers to balance resource allocation during pandemics both within and between hospitals.

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“…(Gelderman and Van Weele 2005b; Gelderman and Van Weele 2003; Gelderman and Van Weele 2005a). Such purchasing portfolio models have been also applied to construction sector and many other engineering-to-order (ETO) sectors(Ferreira, Arantes, and Kharlamov 2015;Ghanbarizadeh et al 2019;Seth and Rastogi 2019). In fact,Seth and Rastogi (2019) considered that Kraljic can cope better than other multicriteria decision making methods with the engineering nature of items and cross-functional consideration required for the ETO context.…”

mentioning

confidence: 99%

Making the most of game theory in the supplier selection process for complex items

Mediavilla

Mendibil

Bernardos

2020

Production Planning & Control

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A purchasing portfolio model for the commercial construction industry: a case study in a mega mall

Cited by 20 publications

References 48 publications

A project-based purchasing portfolio matrix applied to the Australian construction industry

A project-based purchasing portfolio matrix applied to the Australian construction industry

A Kraljic and competitive rivalry perspective on hospital procurement during a pandemic (COVID-19): a Dutch case study

Making the most of game theory in the supplier selection process for complex items

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