Strategic Purchasing Essay Example for Free

Strategic Purchasing Essay Sustainable business growth and practices are taking a forward leap in to the globe. Almost every business now is planning to have a value chain through out their business. Strategic Purchasing is the key element to a sustainable growth of the business along the competitive edge. This study shows the importance of the Kraljic portfolio model that is to be put in to the actual usage, which would yield benefits of purchasing sophistication in terms of positioning and professionalism. Results showed that both positioning and professionalism are positively related to the greater usage of the model. Based on the analysis of a Dutch chemical company, the immense use of the portfolio model has been described and explored in strategic purchasing. The results have proved that when the model is tailored and elaborated it brings about an effective guidance in purchasing and supplier strategies. The case study also lists out the supplier strategies that are feasible. Thus it supports the fact by using the kraljic model that purchasing function does play a vital role and enable organizations to gain competitive advantage The Initial objective of strategic purchasing to procure materials amp; equipment’s, from the right origin, with the right quantity and of the right quality, through right time and cost (peter 1993). Strategic purchasing does play a vital role in an organization. To have a successful business venture purchasing has to be the core element responsible for a product’s quality, acceptability, price and reliability. Procurement system solely depends on the choice of suppliers, to ensure the delivery under any circumstances (John, Marton 2006). In few cases, DSM is locked in the partnering relationship due to necessity, might be cause of situations like monopolistic market. The only solution to this would be finding alternative suppliers through proper new development of suppliers. This solution will not be obtainable when the scenario is due to patents, another situation would be when the supplier does not want to involve really in co – development (Van Weele 2006). There is more likely for the partnership to change into the indolent and chances of being more relaxed in the relationship. Strategic partners should always be a supplier of world class. World-class suppliers are high performing, alert at all times and technically sound through sense of economy. This clearly depicts that strategic patterns will meet the benchmark externally with more satisfactory performance of price (Van Weele 2006). Decomplexing strategy and supplier development (2) must be pursed when the situation turns vice versa, that is when the partnerships show under achieving performance or patterns. Less complexity products when made, leads to alternative solutions within reach. Effectively, DSM wants itself always to be less dependent on non dependable and under achieving suppliers (Van Weele 2006). Importance of kraljic portfolio model is clearly understood when it is actually put into use and customizing of the same would enhance the solving capability of the strategic issues that are at hand. The portfolio model provides guidelines for a better supplier and purchasing strategies. This case study clearly suggests us the importance of placing commodities at different quadrants of the matrix to help in development of the purchasing strategies (Van Weele 2006).