TY - JOUR
T1 - Segmenting supplies and suppliers
T2 - bringing together the purchasing portfolio matrix and the supplier potential matrix
AU - Rezaei, Jafar
AU - Fallah Lajimi, Hamidreza
PY - 2018
Y1 - 2018
N2 - Supplier segmentation is one of the most important supply chain-related activities for most firms working with multiple suppliers. Purchasing portfolio matrix (PPM) is a segmentation method that considers two dimensions (profit impact and supply risk) against which the materials purchased by the company are classified. Despite its popularity, PPM has been the subject of serious criticism. A new approach to supplier segmentation, called supplier potential matrix (SPM), aims to fulfil the need for a unifying framework that includes all the important variables under two overarching dimensions: supplier capabilities and supplier willingness. While the focus of PPM is on supply, SPM mainly focuses on relationship. However, it is important to include both the supplies and the relationship with those who supply, the suppliers. The main purpose of this study is to bring these two approaches together through a hybrid matrix called PPM-SPM. Data is collected from a company working with 70 suppliers. Best worst method (BWM), is used to determine the weights of the criteria we need for the two segmentation approaches. The suppliers are segmented based on the two approaches. A combined PPM-SPM segmentation is then proposed and discussed. The results show that the combined approach improves supplier management.
AB - Supplier segmentation is one of the most important supply chain-related activities for most firms working with multiple suppliers. Purchasing portfolio matrix (PPM) is a segmentation method that considers two dimensions (profit impact and supply risk) against which the materials purchased by the company are classified. Despite its popularity, PPM has been the subject of serious criticism. A new approach to supplier segmentation, called supplier potential matrix (SPM), aims to fulfil the need for a unifying framework that includes all the important variables under two overarching dimensions: supplier capabilities and supplier willingness. While the focus of PPM is on supply, SPM mainly focuses on relationship. However, it is important to include both the supplies and the relationship with those who supply, the suppliers. The main purpose of this study is to bring these two approaches together through a hybrid matrix called PPM-SPM. Data is collected from a company working with 70 suppliers. Best worst method (BWM), is used to determine the weights of the criteria we need for the two segmentation approaches. The suppliers are segmented based on the two approaches. A combined PPM-SPM segmentation is then proposed and discussed. The results show that the combined approach improves supplier management.
KW - best worst method (BWM)
KW - Purchasing portfolio matrix
KW - supplier potential matrix
KW - supplier segmentation
UR - http://www.scopus.com/inward/record.url?scp=85055173204&partnerID=8YFLogxK
U2 - 10.1080/13675567.2018.1535649
DO - 10.1080/13675567.2018.1535649
M3 - Article
AN - SCOPUS:85055173204
SN - 1367-5567
JO - International Journal of Logistics Research and Applications
JF - International Journal of Logistics Research and Applications
ER -