What are the four 4 key quadrants in the Kraljic matrix?

Kraljic Matrix is divided into 4 quadrants showing the profit impact on one axis and supply risk on the other side of the axis. The matrix four quadrants are: Strategic, Leverage, Bottleneck and Non-Critical.

What is the Kraljic matrix used for?

The Kraljic Matrix is a strategic tool used by procurement and supply chain professionals to identify and minimise supply risks. Using the tool to classify the importance of suppliers’ products and services can highlight supply chain weaknesses, support strategy development and minimise supply disruption.

How can you use Kraljic matrix in determining your shopping preferences?

Kraljic recommends the following purchasing approaches for each of the four quadrants:

Strategic items (high profit impact, high supply risk).
Leverage items (high profit impact, low supply risk).
Bottleneck items (low profit impact, high supply risk).
Non-critical items (low profit impact, low supply risk).

What is a bottleneck supplier in Kraljic matrix?

Bottleneck items: components with a low business impact in economic terms but where supply continuity is at risk. The management of these components should be aimed at creating relationships of collaboration in the medium-long term between customer and supplier to guarantee the supply, with less emphasis on the cost.

What is Kraljic portfolio matrix?

The Kraljic matrix is a method for classifying and analysing the purchasing portfolio in order to guide the procurement strategy of companies. It is a tool for managing item categories for a company in relation to the market.

What are strategic items in Kraljic Matrix?

Strategic Items These are the products and services you need that are critical to your business, because these products may be difficult to find, expensive, difficult to deliver, or directly affect the company’s profit.

What are bottleneck items?

Bottleneck products/services are items that represent a relative limited value in terms of money but they are vulnerable with regard to their supply. Often bottleneck products/services can only be obtained from one supplier.

What are non critical items Kraljic?

Non-Critical Items Those products that have a low impact on costs, and the supply of these is low in complexity. A good example would be, for example, standard screws in a computer factory.

Who invented Kraljic Matrix?

Peter Kraljic
The Kraljic Matrix is one of the most effective ways to deliver accurate supplier segmentation. In 1983, Peter Kraljic devised a means to segment the supplier base in the article in HBR. In this, he argued that supply items should be mapped against two key dimensions: risk and profitability.

What is criterions of profit impact and supply risk?

The “profit impact”, which is the volume of purchase, the percentage of total purchase cost, the impact on product quality or the growth of the company. The “supply risk”, which concerns the availability of products, the number of suppliers or the competitiveness of the demand.

What is the Kraljic portfolio matrix?

What is the Kraljic matrix?

What is Kraljic’s segmentation theory?

In 1983, Peter Kraljic devised a means to segment the supplier base in the article in HBR. In this, he argued that supply items should be mapped against two key dimensions: risk and profitability. Risk relates to the likelihood for an unexpected event in the supply chains to disrupt operations.

What is the Kraljic portfolio purchasing model?

The Kraljic portfolio purchasing model also clarifies which material sourcing can be subcontracted and therefore does not have to be ordered again and which level of risk materials are involved. The matrix consists of two dimensions. These are the

When was the Kraljic model first used?

The model was first published in the Harvard Business Review in an article titled ‘Purchasing Must Become Supply Management’ in 1983 by Peter Kraljic. However, it was already in use at BASF at this time.