The Influence of Inventory Management on Supplier Portfolios – A Case Study in the Social Sector

This dissertation seeks to identify the influence that inventory management has on supplier portfolios, considering procurement strategies, supplier selection processes, and buyer-supplier relationships. With this aim, a case study was developed within a social sector context using an institutional entity, namely Santa Casa da Misericórdia de Albufeira. A seven-step framework is proposed, comprising phases for both the implementation of innovative inventory management strategies and the optimisation of purchase processes and the current supplier portfolio, emphasising the need for efficiency gains and cost savings. The identification of consumption rates and the consequent implementation of inventory optimisation strategies that leverage higher control and expenditure efficiency is heavily influential on a company’s supplier portfolio. Centralisation and standardisation are commonly implemented inventory management strategies that generate a restructuring of the consumption framework, which must be accompanied by an adjustment of the supplier base. Other inventory-related ideologies, such as regularity in purchase orders and reduced unnecessary interactions with suppliers, can improve buyer-supplier relationships. Furthermore, insights generated by effective inventory management processes influence supplier criteria that consequently dictate future restructures in supplier portfolios.