THINKING DIFFERENTLY ABOUT PURCHASING PORTFOLIOS: AN ASSESSMENT OF SUSTAINABLE SOURCING

Abstract

Kraljic is widely viewed as a driving force behind the concepts of supply management and purchasing portfolios. Kraljic proposed that supply management professionals needed to engage in a new approach, embracing globalization, technology and risk. This article marked a critical juncture for supply chain management. Almost three decades later, it is evident that the purchasing portfolio concept has been widely adopted as an effective practitioner tool and a well-accepted tenet in the supply chain management literature. However, a recently completed study yielded interesting evidence of a potential shift in supply chain management, specifically, in sustainable sourcing. We recently observed that a number of leaders in sustainable supply chain management (SSCM) were not organizing purchasing portfolios in the manner suggested by Kraljic. We found organizations buying what would traditionally be leveraged commodities in a manner more appropriate for strategic suppliers. This unexpected observation suggests that the supply chain field may face another critical juncture, this time related to SSCM. This manuscript describes the observed phenomena and then, using an inductive approach, enhances the existing theory to explain what was observed. The end result is a modified sustainable purchasing portfolio model that should provide a strategic tool to help both academics and practitioners adapt to the new realities of SSCM.