International Journal of Information Management 54 (2020) 102167

Contents lists available at ScienceDirect

International Journal of Information Management

journal homepage: www.elsevier.com/locate/ijinfomgt

Research Article

A data science and open source software approach to analytics for strategic T
sourcing
Brad Boehmkea, Benjamin Hazenb, Christopher A. Boonec,*, Jessica L. Robinsond
a
Data Science, 84.51°, United States
b
Logistikum, University of Applied Sciences Upper Austria, Austria
c
Mississippi State University, United States
d
California State University Long Beach, United States

ARTICLE INFO ABSTRACT

Keywords: Data science has emerged as a significant capability upon which firms compete. Although many data scientists
Data science and the high-performing companies that employ them seem to have developed robust methods to employ data
Strategic sourcing sciences practices to achieve competitive advantages, there have been few attempts at defining and explaining
Purchasing portfolio how and why data science helps firms to achieve desired outcomes. In this paper, we describe how data science,
Supply chain management
which combines computer programming, domain knowledge, and analytic skillsets to scientifically extract in-
Open source
R programming
sights from data, can be used to help meet the growing demand of analytic needs across an organization’s value
Decision support chain. This is done through the illustration of an applied data science initiative to a strategic sourcing problem
via the use of open-source technology. In doing so, we contribute to the growing data science literature by
demonstrating the application of unique data science capabilities. Moreover, the paper provides a tutorial on
how to use a specific R package along with an actual case in which that package use used.

1. Introduction
Supply chain analytics are not new (Chae, Olson, & Sheu, 2014;
Davenport & O’dwyer, 2011; Souza, 2014). There is, however, an in-
creased recognition of the potential for advanced analytic methods to
improve supply chain decision making, provide actionable insights, and
create competitive advantages (Leventhal & Langdell, 2013; Sivarajah,
Kamal, Irani, & Weerakkody, 2017; Vanpoucke, Vereecke, & Muylle,
2017; Waller & Fawcett, 2013a; Wamba & Akter, 2019; Wamba, Dubey,
Gunasekaran, & Akter, 2019). As a result, many leading firms are em-
bracing analytics to transform their operations and supply chains
(Albergaria & Jabbour, 2020; Kiron, Prentice, & Ferguson, 2014; Liu,
Soroka, Han, Jian, & Tang, 2020; Srinivasan & Swink, 2018; Wamba &
Akter, 2019). In fact, in its 2019 study of global supply chains, Gartner
Inc. found that companies with the top performing supply chains
tended to be early adopters and investors in advanced analytics and
other digital innovations (Gartner, Inc., 2019).
Despite the potential benefits of data-driven analytics, many firms
remain skeptical (Dubey et al., 2019) or are reluctant to invest in the
capabilities (Arunachalam, Kumar, & Kawalek, 2018). The apprehen-
sion is attributed to a variety of challenges including insufficient re-
sources, availability of technologies & tools and a lack of skills
(Arunachalam et al., 2018; Boehmke & Hazen, 2017; Davenport & Patil,
2012; Sivarajah et al., 2017). There is also concern regarding the po-
tential return on investment since not all organizations appear to ex-
perience the promised impact and improvements (Akter, Wamba,
Gunasekaran, Dubey, & Childe, 2016).
In the past, organizations could employ statisticians and operations
researchers to explore datasets manually. However, the volume of data
and the increasing need for analytics across all supply chain processes
has far outstripped the capacity of individual analysts (Provost &
Fawcett, 2013). This is not to say statistician and operations research
analysts are under performing. Rather, in today’s data driven environ-
ment, organizations are demanding more from their analysts than can
be supplied. In sum, organizations have a need to integrate low-cost,
high-level analytics that provide measurable results and can be carried
out in a timely manner – all while using the minimum amount of expert
human capital.
Extant literature investigates this need to understand how organi-
zations can better integrate and leverage advanced analytics
(Schoenherr & Speier-Pero, 2015). Researchers are actively building a
robust body of knowledge in areas such as:
(1) Current analytics environment (i.e. McAfee & Brynjolfsson, 2012;

⁎
Corresponding author.
E-mail address: cboone@business.msstate.edu (C.A. Boone).

https://doi.org/10.1016/j.ijinfomgt.2020.102167
Received 23 July 2019; Received in revised form 13 May 2020; Accepted 31 May 2020
Available online 18 June 2020
0268-4012/ © 2020 Elsevier Ltd. All rights reserved.
B. Boehmke, et al. International Journal of Information Management 54 (2020) 102167

Oh, Teo, & Sambamurthy, 2012; Wang, Gunasekaran, Ngai, &

Papadopoulos., 2016),
(2) How data management is changing with today’s “big” data en-
vironment (i.e. Chen & Zhang, 2014; Wamba, Akter, Edwards,
Chopin, & Gnanzou., 2015; Richey, Morgan, Hall, & Adams, 2016),
(3) How analytic techniques are advancing in conjunction with current
technology (i.e. Hazen, Skipper, Boone, & Hill, 2016; Waller &
Fawcett, 2013b; Gupta, Drave, Dwivedi, Baabdullah, & Ismagilova,
2019),
(4) How education is changing to accommodate the age of big data and
data science (i.e. Schoenherr & Speier-Pero, 2015; Dubey &
Gunasekaran, 2015; Gorman & Klimberg, 2014).

Despite this significant increase, supply chain analytics research is

still in its early stages (Chae et al., 2014) and lacks the practical
knowledge and usable applications needed to inform today’s managers
and organizations (Hazen et al., 2016). Additional literature discusses
the lack of exemplar case studies to illustrate how organizations can
deploy analytic applications to turn data assets into insights to gain
competitive advantages (George & Haas, 2014; Power, 2014; Wang
et al., 2016). Empirical and theory-driven explanations are needed that
help businesses identify which available technologies are best suited for Fig. 1. Components of Data Science.
their business (Lepenioti, Bousdekis, Apostolou, & Mentzas, 2020); how
analytics are operationalized (Akter et al., 2019); and how analytics can
small, into decision-making insights. Data science is considered an in-
impact operational performance (Ashrafi, Ravasan, Trkman, & Afshari,
terdisciplinary field focused on the application of quantitative and
2019; Wamba, Gunasekaran, Dubey, & Ngai, 2018). Without practical
qualitative methods to provide insights from various forms of data and
applications, the gap between research, practice, and impact will only
solve relevant problems (Larson & Chang, 2016; Waller & Fawcett,
widen (Richey et al., 2016).
2013b). Interest in data continues to grow with the emergence of in-
This paper seeks to address this gap between research and practice
dustry initiatives and a variety of new academic program offerings
by illustrating how advancements in analytic approaches can become
(Donoho, 2015; Schoenherr & Speier-Pero, 2015). Data science has a
more practical by leveraging open-source technology. In particular, we
strong reliance on programming and analytical skills; nonetheless, ro-
demonstrate how data science, an interdisciplinary field that combines
bust domain knowledge is equally important (Waller & Fawcett,
computer programming, domain knowledge, and analytic skillsets to
2013b). As illustrated by Simpson et al. (2015, 95), “… coming up with
develop, automate, and deploy scientific methods to extract insights
a good algorithm involves both code and context, a mingling of the
from data, can be used to help meet the growing demand of analytic
complementary strengths of computer scientists and humanists.” Fig. 1
needs across an organization’s value chain. This demonstration of data
illustrates how these three primary skillsets converge to make data
science capabilities has largely remained absent in the literature and is
science.
therefore the primary contribution of this paper. Specifically, this paper
Although simplified, this figure points out that to understand the
demonstrates the efficacy of a theory driven data science method in a
impact of data science, research must illustrate how programming and
practical setting and then makes the tool available to other users via
analytic skills integrate with domain expertise to provide viable solu-
open source software. In the sections that follow, we introduce the
tions to well-defined problems. The application of such analytics to
novel analytic approach originally developed as part of an effort to
domain problems is not new, in fact, application of OR dates back to
support the analysis of a government organization’s purchasing port-
pre-World War II (Larnder, 1984). However, what is new is a significant
folio. While aspects of this larger effort have been included in previous
increase that computer programming is playing in modern analytics. As
research efforts, this paper’s focus on the use of open source R pro-
stated by Davenport & Patil (2012, 74), the “data scientist’s most basic,
gramming language is unique and highlights how this analytic frame-
universal skill is the ability to write code.” As such, this has driven
work is practical to deploy and can be used by analyst to easily and
advancements in the types of analytic techniques applied (i.e. machine
quickly quantify and analyse their organization’s purchasing portfolio.
learning, natural language processing) as well as how software is le-
veraged to produce analytic products, providing organizations greater
2. Data science and open source software
analytic capabilities.

Organizations that can leverage the deluge of data are proving to be

more dynamic and competitive than organizations that do not have this
ability (Davenport & Harris, 2007; McAfee & Brynjolfsson, 2012). In
fact, there is a noticeable positive correlation between top performing
organizations and data-driven decisions (McAfee & Brynjolfsson, 2012).
Specifically, organizations can gain a competitive advantage via im-
proved efficiency, productivity, profitability, and real-time knowledge
(Manyika et al., 2011; Trkman, McCormack, de Oliveira, & Ladeira,
2010).
2.1. Data science
Data in a vacuum are effectively worthless (Gandomi & Murtaza,
2015), which necessitates the ability to employ the information pro-
cessing capability known as ‘data science’ to turn data, both big and
2.2. Open source software
Historically, organizations have relied on proprietary software
technologies for their analytic capabilities (Gutierrez et al., 2018), but
these technologies often lack the necessary level of innovation, inter-
operability, and transparency (Doig, 2017). This, in-part, helps explain
the recent shift towards open source software. Open source software, as
the name suggests, is voluntarily developed and freely available (i.e.
open) to all (O’Mahony, 2003). This open source approach represents a
cultural and economic phenomenon (Lerner & Tirole, 2002) and a trend
toward user developed analytic capabilities (Von Hippel, 2009). This
could potentially revolutionize how many organizations, especially
those with constrained resources, encourage innovation and adopt
technology (Huizingh, 2011).

2
B. Boehmke, et al.
This transition towards open source software also provides an
avenue for academia and industry to become better aligned and to help
improve business processes and decision making by incorporating
analytics into operational processes (Gutierrez et al., 2018; Leventhal &
Langdell, 2013). Not only does open source software enable faster
technology transfer and easier integration, but also, resource-con-
strained organizations of all sizes can use open source software to de-
velop additional analytic capabilities at lower costs. Unfortunately,
research investigating the use of open source software for analytic and
decision-making purposes is lacking (Boehmke & Hazen, 2017).
2.3. Open source for data science
During the last decade, free and open source programming languages
such as R and Python have emerged as the most common analytics and data
science tools (Wickham, 2014). Their applications run the gamut between
data preprocessing, cleaning, visualization, and Internet data extraction as
well as a wide range of analytical tasks including econometrics, statistics,
optimization, and natural language processing (Boehmke, 2016). Due to
their popularity, flexibility, and open source form, both R and Python have
become essential analytic software tools now commonly used by some of
the world’s most recognized company’s (Boehmke, 2016).
A key reason for the success of these analytic programming languages is
the packaging system they provide (R Core Team, 2017). These packages
are a way to exchange and maintain collections of functions, data sets, in-
teractive applications, and user documentation. Similar to peer-reviewed
journal articles disseminating scientific knowledge to others, a package
distributes mathematical and statistical methods to others. These packages
allow users to extend and modify the analytic functionality (Boehmke,
2016) for organizations’ and communities’ needs while still enforcing pro-
gramming and quality standards (Boehmke & Jackson, 2016). This provides
a convenient way to develop and to maintain analytic functions that may be
shared with colleagues and organizations as well as other analysts and
supply chain community members. Additionally, this capability offers an
opportunity to transfer analytic functionalities that are developed by the
research community to targeted practitioners as quickly as (and in some
cases even quicker than) ideas and methodologies that are transferred
through our peer-reviewed academic journals.
Many government and defense organizations rely largely on Excel
for decision analysis modelling. Unfortunately, Excel provides a very
limited environment for developing and sharing analytic functionality.
Thus, each analyst is left to their own devices to create and implement
analytic techniques. This creates several limitations such as consistency
and validity of implemented functions and can greatly impede the im-
plementation of newly established analytic techniques. In some cases,
proprietary software is relied on; however, proprietary software re-
stricts access to the underlying functions, eliminating the ability to
customize the software’s capabilities to their organizational needs
(Boehmke & Jackson, 2016). Consequently, organizations will often pay
excessive licensing fees for analytic software that does not provide the
outputs desired. It is only realistic that these same challenges exist in
most firms performing analytic activities as well.
Open source programming languages and their packaging ecosystem
provide the SCM community a free alternative to develop, customize and
extend analytic functionality for our organizations and communities with
consistent, valid, and swift implementation. Due to its open source nature, it
is readily available for use by organizations across industries. Accordingly,
this collective action capability is primed for implementation within and
across the SCM community. To illustrate, we demonstrate a data science
approach to address a strategic sourcing problem.
3. Domain problem: purchasing portfolios for strategic sourcing
Business leaders are increasingly reliant upon new forms of data and
analytics to gain greater visibility into important SCM activities.
Opportunities to apply analytics exist across supply chain activities
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International Journal of Information Management 54 (2020) 102167
including marketing, logistics, purchasing, operations, and product
development (Chen, Preston, & Swink, 2015; Hazen, Boone, Ezell, &
Jones-Farmer, 2014; Sanders, 2016; Souza, 2014). The application
domain of the larger effort, of which this project supported, was pur-
chasing and strategic sourcing.
The focus on purchasing and strategic sourcing is noteworthy given its
importance (Landale, Apte, Rendon, & Salmerón, 2017; Luzzini & Ronchi,
2016) and the lack of research related to the use of strategic sourcing fo-
cused analytics in practice (Souza, 2014). Strategic sourcing is considered
critical to firm success (Chen, Paulraj, & Lado, 2004; Dyer, Cho, & Chu,
1998; Padhi, Wagner, & Aggarwal, 2012) and an imperative for modern
firms (Talluri, DeCampos, & Hult, 2013; Montgomery, Ogden, & Boehmke,
2018). According to Sanders (2016), sourcing related spending may equate
to 50–90 % of a manufacture’s revenue, making sourcing focused analytics
and applications increasingly important.
Purchasing portfolio models are recognized by scholars and practi-
tioners (Gelderman & Van Weele, 2003) as useful tools for improving pur-
chasing and strategic sourcing (Montgomery, Ogden, & Boehmke, 2018) by
enabling organizations to classify commodities (Olsen & Ellram, 1997;
Nellore & Söderquist, 2000) and differentiate suppliers (Buvik & Reve,
2001; Mota & de Castro, 2005; Padhi et al., 2012). The first comprehensive
portfolio model was introduced by Peter Kraljic in the 1983 Harvard Busi-
ness Review article, “Purchasing Must Become Supply Management” (Kraljic,
1983).
The Kraljic Portfolio Matrix (Kraljic, 1983) classifies products along
external and internal dimensions. The external dimension considers
supplier and supply market related factors (i.e., supply risk) while the
internal dimension considers the importance and profitability of a given
product (i.e., profit impact) (Dubois & Pederson, 2002). By scoring items
as low or high on each of the two dimensions, organizations can classify
products (Fig. 2) and develop strategic sourcing strategies that seek to
minimize supply risk and maximize purchasing power and profits
(Padhi et al., 2012; Montgomery et al., 2018).
While there are now other purchasing portfolio models available (i.e.,
Tryggvason & Johansen, 1996; Olsen & Ellram, 1997; Dubois & Pederson,
2002; Kamann, 2007), the Kraljic Portfolio Matrix (KPM) is considered the
seminal work (Padhi et al., 2012) and remains the most recognized strategic
purchasing portfolio model by both scholars and practitioners (Gelderman &
Van Weele, 2003; Lamming, Caldwell, Harrison, & Phillips., 2001). How-
ever, there are several critiques of the KPM. For example, several suggest
that the postioning of commodoties in the KPM is subjective and lacks
analytical rigor (Knight, Tu, & Preston., 2014; Lee & Drake, 2010; Olsen &
Ellram, 1997; Padhi et al., 2012; Ramsay, 1994). Others highlight the lack
of research available demonstrating how firms can succesfully implement
KPM and other purchasing portfolio models (Formentini, Ellram, Boem, &
Da Re, 2019; Wagner & Johnson, 2004).
Accordingly, we introduce a quantitative approach to position and
analyse an organization’s purchasing portfolio as well as apply the R
open source programming language to package and deploy the
Fig. 2. Kraljic Portfolio Matrix.
(From "Purchasing Must Become Supply Management" by Peter Kraljic, Harvard
Business Review, Sept. 1983.).
B. Boehmke, et al.
technique to ease implementation.
4. The KraljicMatrix package: data science solution
KraljicMatrix (Boehmke, Montgomery, Ogden, & Freels, 2017) is an
R package developed by the authors that provides an efficient and re-
producible quantitative framework to position and analyze an organi-
zation’s purchasing portfolio. It was designed to allow organizations to
leverage their growing supply chain data and quickly implement pur-
chasing portfolio analysis which, historically, has been a time-con-
suming task considering the lack of quantitative methods previously
discussed. The package was developed as part of a collaborative re-
search effort with a large government purchasing organization. This
research effort has been referenced by Montgomery (2016) and
Montgomery et al. (2018). However, the focus of the prior works was
on the use of multi-objective decisions analysis (MODA) and addressing
the lack of quantitative and objective methods for positioning items in
the Kraljic Portfolio Matrix (Montgomery, 2016; Montgomery et al.,
2018). The focus here is on functionality of the data science solution and
the value of it being available via an open source software solution. This
approach distinguishes this work from prior efforts, provides added
insights for readers and potential users, and helps answer calls for ex-
emplar cases illustrating how organizations can operationalize and
implement analytic applications (Akter et al., 2019; George & Haas,
2014; Lepenioti et al., 2020; Power, 2014; Wang et al., 2016).
As an open source software solution, the KraljicMatrix package is
available to download from the Comprehensive R Archive Network
(CRAN; https://cran.r-project.org) or from GitHub (https://github.
com/afit-r/KraljicMatrix). In addition to the package, potential users
can also access a KraljicMatirx reference manual (Boehmke, Greenwell,
McCarthy, & Montgomery, 2018) and a vignette (Boehmke, 2018).
The vignette (Boehmke, 2018) provides users background and
context for the problem addressed by the KraljicMatrix package along
with steps for using the package and interpreting its results. Portions of
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International Journal of Information Management 54 (2020) 102167
the Vignette, along with some additional supporting discussion are in-
cluded here.
4.1. KraljicMatrix: Vignette (Boehmke, 2018)
The KraljicMatrix package has eight functions to aid analysts in
performing a KPM analysis: (Table 1)
An example dataset psc is provided in the KraljicMatrix package.
This data contains 200 product and service contracts (PSCs). Each PSC
has an x attribute (i.e., supply risk) score from 1 (worst) to 5 (best) and
y attribute (i.e., profit impact) score from 1 (worst) to 10 (best). Herein,
we utilize this dataset to illustrate the functionality of the KraljicMatrix
package.
Note that the KPM merely plots products and services on an x–y axis
coordinate system. The x and y attributes are simply evaluation mea-
sures. They enable each product and service to obtain a score for each
dimension being measured. For instance, the x attribute score could be
the IBISWorld Buyer Power Score that measures supply market com-
plexity (1–5 in 0.01 increments). In order to plot the attributes on the
KPM matrix, one must normalize the values scores such that (1) the
values represent the decision makers’ preferences; and (2) the values
are standardized. To do this, use an exponential single attribute value
function (SAVF). For example, let 0 ≤ vx (x) ≤ 1 represent the nor-
malized value of the x attribute such that x0 and x* are the lowest and
highest preferred value of attribute x, respectively. Thus, vx (x0) = 0
and vx (x*) = 1. As such, let vx (xi) be the SAVF of exponential form and
each xi is an input and ρx is the exponential constant for vx (xi):
(xi x 0)/ x ]
vx (x i ) =
1 e[
i A
1 e[ (x * x 0)/ x ] (1)
After solving the single attribute value function for both x and y
attributes, we acquire a [vx (xi),vy (yi)] ordered pair for each service or
product to be plotted in the KPM. However, prior to applying the SAVF
to our x and y attributes, we must first identify the appropriate ρ value.
B. Boehmke, et al. International Journal of Information Management 54 (2020) 102167

Table 1
Analytic Functions Provided by the KraljicMatrix Package.
Function Purpose

SAVF_score Computes a utility score based on an exponential single attribute value function.
SAVF_preferred_rho Computes the preferred rho that minimizes the squared error between subject matter inputs and exponentially fitted utility scores.
SAVF_plot_rho_error Plots the squared error terms for the rho search space to illustrate the preferred rho that minimizes the squared error between subject matter desired values
and exponentially fitted scores.
SAVF_plot Plots the single attribute utility curve along with the subject matter desired values for comparison.
MAVF_score Computes the multi-attribute value score based on x an y attribute utility scores and their respective weights.
MAVF_sensitivity Computes summary statistics for multi-attribute value scores for x and y given a range of swing weights for each attribute.
kraljic_quadrant Identifies the Kraljic purchasing matrix quadrant for each product or service based on the attribute utility scores of x and y.
kraljic_matrix Plots each product or service in the Kraljic purchasing matrix based on the attribute value score of x and y.

Fig. 3. Single Attribute Utility Curve.

The benefit of applying an exponential SAVF is it can take on several We can also visualize the errors of the ρ search space with
forms of increasing rates, along with aligning to a linear value function. SAVF_plot_rho_error, which plots the squared error terms for all ρ values
Accordingly, if certain x attribute values are valued more than other within the ρ search space to illustrate the preferred ρ that minimize the
values an exponential SAVF will capture this utility curve. To identify squared error between subject matter desired values and exponentially
the appropriate exponential rate, subject matter expert (SME) inputs fitted scores (Fig. 3).
are often evaluated and an exponential rate that most closely matches
the preferred values provided by the SMEs is chosen. Thus, assuming
our given x attribute the SME inputs suggest that x attribute values of 3,
4, and 5 provide a utility score of .80, .90 and 1.0 respectively (i.e.,
representing a decreasing rate of return utility curve). Knowing that our
x attribute is bounded between 1 and 5 we can search for a ρ value
between 0–1 that provides the best-fit utility function using the
SAVF_preferred_rho function. Best-fit is measured by minimizing the
n
sum of squared residuals (S = i = 1 ri2 ).

Accordingly, we can see that ρ = 0.6531 provides the best-fit ex-

ponential SAVF. We can illustrate this two ways. The first is to use
SAVF_plot to plot the single attribute utility curve compared to the
subject matter desired values.

5
B. Boehmke, et al. International Journal of Information Management 54 (2020) 102167

Once the preferred ρ value is identified, we can apply the ex-

ponential SAVF with SAVF_score to normalize our attributes based on This illustrates that most of the PSCs fall in the Leverage quadrant
our utility curve. Here, we assume that the optimal ρ value for the x and (upper left) while only a few fall in the Strategic (upper right) and Non-
y attributes are 0.653 and 0.70 respectively (Fig. 4). Critical (lower left) quadrants. However, none of the PSCs fall in the

Bottleneck quadrant. Keep in mind that each category benefits from a

Now that the normalized x and y attribute utility scores are align different strategic sourcing approach. Decision-makers will benefit from
with the leadership’s preference structure, we may plot each PSC within understanding specifically which products and services align to each so
the KraljicMatrix with the kraljic_matrix function.

Fig. 4. Single Attribute Utility Error Curve.

6
B. Boehmke, et al.
Fig. 5. Kraljic_Matrix Function Output.
that they can coordinate the appropriate sourcing strategy for particular
product or service. This can be easily done with the kraljic_quadrant
function (Fig. 5).
An analyst can now easily filter for those PSCs that fall into a spe-
cific quadrant. Finally, it is important to keep in mind that decision-
makers may weight the importance of each attribute differently. Due to
certain market environments, decision-makers may weight the x attri-
bute (i.e., supply risk) of greater importance than the y attribute (i.e.,
profit impact) or vice versa. As such, one approach used in the extant
literature is importance weighting (see Olsen & Ellram, 1997; Liu & Xu,
2008; Padhi et al., 2012). Nonetheless, importance weights do not
consider the range between the least- and most-preferred options on
each attribute (see Von Winterfeldt & Edwards, 1986). As an alter-
native, swing weighting has become a common approach to more ac-
curately capture the importance trade-space of given attributes
(Parnell, Bresnick, Tani, & Johnson, 2013). There is a unique difference
between importance weighting and swing weighting. “Importance
weights are used to reflect the general importance of one attribute over
another…without regard to…the difference between the worst and the
best value points of each attribute” (Watson & Buede, 1987, 200).
Watson and Buede further state “when this difference from worst to
best is not explicitly referenced in assessing weights, we obtain some
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International Journal of Information Management 54 (2020) 102167
general notion of importance, which is subject to great variation and
argument among decision-makers” (1987, 200). Dillon-Merrill, Parnell,
Buckshaw, Hensley, and Caswell (2008) argue that “importance
weights do not take into account the range between the lowest and the
highest levels of the value measures” resulting in the potential for im-
portant measures to not be important to the decision. However, the use
of swing weighting ensures we capture the full value preference
structure rather than simply an arbitrary score or at best a hierarchy of
importance. Swing weighting also protects against the potential for loss
of information, misunderstanding of decision-maker belief, and even
loss of trade-offs between values. Thus, we can prioritize PSCs based on
this preference by applying a multi-attribute value function (MAVF)
with swing weights. Swing weight values for x and y attributes (wx and
wy respectively) are typically elicited from SMEs (for a detailed de-
scription of this process see Von Winterfeldt & Edwards, 1986). This
allows for calculation of the interaction swing weight (wxy = 1 – wx –
wy). Thus, we can calculate the MAVF as outlined by Keeney and Raiffa
(1993):
V (x , y ) = wx vx (x ) + wy vy (y ) + wxy vx (x ) vy (y ) (2)
We apply the MAVF_score function in order to compute the multi-
attribute value score based on x and y attribute utility scores and their
respective swing weights. As such, if through discussions with decision-
B. Boehmke, et al.
makers we identify swing weight values of 0.65 and 0.35 for the x and y
attributes, respectively, we can obtain the computed MAVF score for
each PSC:
This allows us to quickly dissect the PSCs. For example, if decision-
makers are most concerned with the Leverage quadrant but want to
evaluate the top 10 PSCs based on the decision-makers preferences of
the attributes, we can efficiently make this assessment with the fol-
lowing code. This identifies the top 10 PSCs that are most likely to
benefit from a strategic sourcing approach specifically designed for
Leverage PSCs.
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International Journal of Information Management 54 (2020) 102167
Finally, since swing weight inputs are subjective in nature, one may
wish to perform a sensitivity analysis on these swing weights to assess
their impact on MAVF scores. The MAVF_sensitivity function executes a
sensitivity analysis by performing a Monte Carlo simulation with 1000
trials for each product or service (i.e., row). Specifically, each trial
randomly selects a weight from a uniform distribution between lower
and upper bound swing weight parameters and calculates the multi-
attribute utility score. From these trials, summary statistics for each
product or service are calculated and reported for the final output.
B. Boehmke, et al.
Although this offers basic understanding of each KraljicMatrix
function, additional information can be found for each function via
running? function (i.e.? SAVF_score).
5. Discussion
5.1. Implications for practice
Facing increased scrutiny by the Government Accountability Office
(GAO, 2012, GAO, 2015) to reduce costs, the Air Force Installation
Contracting Agency (AFICA) needed tools to help improve strategic
sourcing. Unfortunately, AFICA was fiscally constrained and had lim-
ited internal analytic resources. At the time of this research effort,
AFICA had only one operations research analyst that was responsible
for all of the agency’s analysis and modelling requirements. Thus, the
KraljicMatrix package was developed to provide the AFICA analyst with
an efficient and quantitatively rigorous method to implement the KPM.
AFICA accepted that the data science approach to implement this
objective and quantitative approach was superior to approaches used in
the past. Previous iterations of subjective assessments required 30–90
days to complete. With the KraljicMatrix package, the single Operations
Research Analyst stated this quantitative approach took him less than
an hour to perform. Accounting for data gathering and subjective
measure inputs, this time increases to a week; however, the operations
research analyst stated it reduced his analysis time by more than 75 %
and was more agile than previous AFICA approaches. In addition to the
time reductions, the Director of AFICA indicated the approach provided
higher quality results and more insightful results. Moreover, these in-
sights are far more reproducible when delivered in an objective and
programmatic way as provided by the KraljicMatrix package. Without
this approach being deployed in an open source capability such as R,
both the operations research analyst and the Director indicated that
their limited analytic resources would have likely constrained them
from implementing the solution. The added analytic capability is now
considered a necessity to provide a reliable, objective, and consistent
approach to quantitatively analyse strategic sourcing.
As described above, this research provides a simple approach to
position and analyse an organization’s purchasing portfolio. Moreover,
by deploying this quantitative framework within an R package en-
vironment, the distribution and the implementation of the approach is
efficient, effective, and practical. This generalizability is demonstrated
by the fact that the software has been downloaded, on average, 300
times per month equating to nearly 10,000 total downloads. Moreover,
the streamlined implementation allows organizations with limited re-
sources like AFICA to reduce the time to perform a purchasing portfolio
analysis by over 75 %. In sum, when combined, this research illustrates
how data science can be used to support sourcing and other supply
chain related challenges as well as suggest how it might be used to
deploy them across other academic and industry organizations.
5.2. Research contributions
This research provides important contributions for advanced supply
chain analytics research and practice. First, extant literature has largely
focused on advancements in large/complex data, emerging analytic
techniques, and the impact of big data on organizations and educa-
tional. Thus, there is a need to improve the practicality of related SCM
research (Hazen et al., 2016) and demonstrate how academics and or-
ganizations can deploy analytic applications (George & Haas, 2014;
Power, 2014; Wang et al., 2016). Despite the call for research that
explains data science capabilities in a supply chain context (Waller &
Fawcett, 2013b), research exhibiting this aptitude remains limited. Our
research addresses this void by demonstrating how data science and
open source technology can be exploited to develop, automate, and
deploy analytic techniques to enable data-driven decisions across or-
ganizational processes.
9
International Journal of Information Management 54 (2020) 102167
Second, past research has identified a lack of quantitative ap-
proaches to position items in the Kraljic Matrix (Knight et al., 2014;
Padhi et al., 2012; Wagner & Johnson, 2004). Moreover, the few
quantitative approaches that have been proposed were difficult, lim-
ited, and of little practical use (Dillon-Merrill et al., 2008; Montgomery
et al., 2018; Parnell et al., 2013). This research fills this gap by devel-
oping and illustrating a reliable and repeatable quantitative approach
for establishing strategic supplier management with the Kraljic Matrix.
Third, it is hoped that the novel form and function of this research
and resultant report can be used as a benchmark of sorts for further
academic research at the intersection of data science and supply chain
management. Many analytics tools are developed and deposited in open
source or proprietary repositories, and some are published in technical
journals. Although useful in many ways, this standard approach serves
to create a wider gap between state-of-the-art analytics approaches and
the needs of strategic supply chain managers and supporting re-
searchers in that analytics features are discussed separately from
management needs. Our unique approach of developing a tool based on
management theory and literature, demonstrating its efficacy in a
practical setting, and then making the tool available to others via open
source is one that we hope can be more widely adopted in the academic
management literature.
5.3. Limitations and future research
This study has several limitations. First, the specific data science
approach presented uses a single attribute value function (SAVF).
Future research should expand this to account for multi-attribute value
functions (MAVFs). This research also focused on only one aspect of
supply chain management (strategic sourcing). Future research should
explore applications of R to other areas within the supply chain (e.g.
inventory, operations, etc.). Future research could also examine op-
portunities to utilize other types of open source software besides R.
Finally, future researchers should seek to contribute additional ex-
emplars to the body of knowledge to further demonstrate the impact of
data science and advanced analytics on supply chain performance.
6. Conclusion
The intersection of data science and supply chain management is
receiving increased attention across the globe. This research presented
an open-source analytical tool that can be used to quantitatively po-
pulate a Kraljic Matrix, thus providing organizations with a standard
and robust method for enabling strategic supplier management. By
demonstrating a real-world application of the tool, we also hope this
research (and others like it) can be used by practitioners and re-
searchers to develop and execute data science functions in support of
supply chain management.
CRediT authorship contribution statement
Brad Boehmke: Writing - original draft, Writing - review & editing,
Conceptualization, Methodology, Software, Investigation. Benjamin
Hazen: Writing - original draft, Writing - review & editing,
Conceptualization, Methodology, Investigation. Christopher A. Boone:
Writing - original draft, Writing - review & editing. Jessica L.
Robinson: Writing - original draft, Writing - review & editing.
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