Kraljic - Sourcing Strategies Construction

CONTENTS

1. 2. SOURCING STRATEGIES - INTRODUCTION ..................................... 2 KRALJIC MATRIX..................................................................................... 3 2.1. Non-Critical ....................................................................................... 4 2.2. Leverage ............................................................................................ 5 2.3. Bottleneck .......................................................................................... 5 2.4. Strategic ............................................................................................. 6 APPLICATION IN THE CONSTRUCTION INDUSTRY ...................... 7 3.1. Background ........................................................................................ 7 3.2. Adversarial procurement.................................................................... 7 3.3. The change to partnering ................................................................... 8 3.4. Criticisms of partnering ..................................................................... 8 CONCLUSIONS ......................................................................................... 10

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BIBLIOGRAPHY .............................................................................................. 11

1. Sourcing Strategies - Introduction

This assignment discusses sourcing strategies for the Kraljic matrix (1985) with examples from the construction industry. Section 3 addresses the benefits and challenges of applying the Kraljic matrix to the construction industry, while Section 4 concludes by identifying further issues to be taken into account.

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2. Kraljic Matrix

Kraljic (1985) identified four purchasing categories (Figure 1) based on the impact of the purchase on the firm, versus the supply risk/complexity. This segmentation relates to the balance of power between supplier and buyer, hence strategies to exploit buyer...