Purchasing category management: Portfolio management, sourcing levers and strategy formulation

This paper provides a comprehensive review and benchmark of category management in procurement. Despite its widespread use as a strategic sourcing approach, the theoretical foundation and real-world application of category management remain insufficiently aligned. The study first reviews the existing literature on category strategy formation, purchasing portfolio models, and sourcing levers. It then compares these concepts to practice applications, based on an analysis of the category management processes of 17 leading firms. The findings confirm the continued dominance of the Kraljič matrix but also reveal a growing interest in systematic lever frameworks as an emerging best practice, bridging the gap between category strategy formulation and implementation in supplier selection and contracting. Conceptually, the distinction between category strategy (and sourcing category portfolios), sourcing levers (and systematic lever analysis models) and supplier tactics (and supplier portfolio models) as distinct but interconnected elements of category management is emphasised. By synthesizing theory and practice, this study identifies a generic category strategy process, outlines key tools, and highlights emerging best practices, thereby bridging the gap between strategic intent and execution in category management.