The Kraljic Matrix helps us develop a purchasing strategy for the products and services our organization consumes. It aims to remove supply vulnerability as. Kraljic Matrix, also known as Purchasing Portfolio Matrix or Supply Chain Portfolio Matrix, is a method developed by Peter Kraljic in It is used to create a. The Purchasing Portfolio Matrix [Kraljic ] Rys. 2. Key words: Purchasing, Kraljic-matrix, purchasing strategies, new concepts based on.

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The Kraljic Matrix | How to Optimize Purchasing Costs and Risks

This matrix helps a company gain an insight into the working methods of the purchasing department mwtrix how they spend their time on various products. The result is that purchasing professionals can prioritize buying activities based on profit impact and level of risks involved.

World Customs Journal, 1 2 Subsequently, it can be concluded whether a product is in the right quadrant or whether it would be better to move it to another quadrant. If you liked this article, then please subscribe to our Free Newsletter for the latest posts on Management models and methods.

There are only two ways to make money: Harvard business review, 61 5 To what extent are the materials up-to-date and have the latest technology and materials substitutions been used?

It is used to create a purchasing portfolio by segmenting items products or services into 4 dimensions. The Kraljic matrix helps us in the first step of supplier management — identifying important suppliers.

Mintzberg Managerial Roles December 29, The karljic strategies we would typically use for these types of items include collaboration and strategic partnerships. The International Journal of Logistics Management, 17 2 Using the Kraljic portfolio purchasing model, an organization can professionalize and improve its purchasing performance which may produce considerable cost savings. Leverage Items Just like strategic items, these items have a large financial impact on our organization, however, the item is in abundant supply.


Ericsson’s proactive supply chain risk management approach after a serious sub-supplier accident. Kraljic Portfolio Purchasing Model4. The kraljlc strategies we would typically use for these types of items include tendering and competitive bidding.

Share Tweet Share Share Pin. By creating buffer stock of these scarce items and by finding alternative suppliers, a company can undermine this position.

The Kraljic Matrix | How to Optimize Purchasing Costs and Risks

Most raw materials and substances fall into this category. How you then actually krzljic those suppliers is up to you. His 2×2 matrix is set out to provide companies with a way to distinguish kaljic different types of purchasing strategies which maximise buying power while minimising supply risks. A taxonomy for selecting global supply chain strategies. It does this by helping us determine, on a per product or per supplier basis, the type of relationship we should be fostering with each of our suppliers.

Bottleneck Items These are items that have a low financial impact on our organization, however, there is a high supply risk. This prevents obsolescent stock and excess supplies and this leads to cost reduction. In kralkic balance of power between the company and the supplier, the company is the dominant factor.

Henry Mintzberg Organizational Configurations December 18, After reading you will kralmic the basics of this powerful purchasing strategy tool. In order to avoid unnecessary risks, it is important to spread the goods across the four quadrants. There is an imbalance of power between the company and the supplier, in which the supplier is the dominant factor. Secondly, we need to develop plans to reduce our dependence on this supplier, by adapting our products and investigating alternative products and suppliers.


Thriving in a turbulent world: The purchasing strategy we would typically use for these types of items is twofold. There may be a balance of power between the company and the supplier, but when this supplier ceases to deliver, purchasing stagnates. Save my name, email, and website in this browser for the next time I comment.

Kraljic Portfolio Purchasing Model, a purchase strategy tool | ToolsHero

Your rating is more than welcome or share this article via Social media! If you truly want to develop a comprehensive supplier management strategy, then this is the area you should focus iraljic first. These are items that have a low financial impact on our organization and are also in abundant supply, such as office supplies.

You have entered an incorrect email address! With strategic suppliers, thinking about how we are perceived to them is important, and based on our answer to this question, we may want matgix approach how we build a relationship with that supplier in a different manner.