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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These are products that are essential for the production process but they are difficult kraljix obtain. Ericsson’s proactive supply chain risk management approach after a serious sub-supplier accident.

What are the logistics costs and are there monopoly or oligopoly conditions? By creating buffer stock of these scarce items and by finding alternative suppliers, a company can undermine this position. Your rating is more than welcome or share this article via Social media!

It aims to remove supply vulnerability as much as possible and iraljic our potential buying power. The International Journal of Logistics Management, 17 2 Peter Kraljic recommends the following steps in the entire purchasing process:. Preferably, a product is placed only in one of the quadrants.

After reading you will understand the basics of this powerful purchasing strategy tool.

The Kraljic Matrix | How to Optimize Purchasing Costs and Risks

Related concepts Supplier Segmentation The idea of supplier segmentation is pretty simple – grouping suppliers in a supply base kralkic their impact on the business Rogers, Harvard Business Review, 3, If you truly want to develop a comprehensive supplier management strategy, then this is the area you should focus on first. This is defined from low to high.

What is the strategic importance of the purchase of certain materials? Harvard business review, 61 5 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.


Although these products are low impact and have an abundant supply, kraljlc are nevertheless interesting, because the cost of handling them can often outweigh the cost of the product itself. A taxonomy for selecting global supply chain strategies.

Strategic Items These items have a large financial impact on our organization. Such products represent a low value krajlic they can be purchased in different varieties and from different suppliers.

Raw materials determine to a large extent the value of the cost price of the finished product. Kraljic portfolio purchasing model. How you then actually manage those suppliers is up to you. Henry Mintzberg Organizational Configurations December 18, Firstly, we need to ensure continuity of supply.

Kraljic Matrix

Please enter your name here. How to cite this article: In the balance of power between the company and the mafrix, the company is the dominant factor. Using the Kraljic portfolio purchasing model, an organization can professionalize and improve its purchasing performance which may produce considerable cost savings.

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. Retrieved [insert date] from ToolsHero: Leverage Items Just like strategic items, these items have a large financial impact on our organization, however, the item is in abundant supply.

The Kraljic Matrix | How to Optimize Purchasing Costs and Risks

To what extent is supply complex; is there abundance or scarcity? This enables us to see which relationships are important so we can focus on strengthing these, as well as identifying less important relationships where we might employ traditional supplier management techniques such as offshoring.

The power of supply chain segmentation. This article explains the kraljic portfolio purchasing model in a practical way. Secondly, we need to develop plans to reduce our dependence on this supplier, by adapting our products and investigating alternative products and suppliers.


Kraljic Portfolio Purchasing Model4. This prevents obsolescent stock and excess supplies and this leads to cost reduction. There are only two ways to make money: Add a link to this page on your website: These are items that have a low financial impact on our organization, however, there is a high supply risk. The Kraljic matrix helps us in the first step of supplier management — identifying important suppliers.

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No company kraljjc allow purchasing to lag behind other departments in acknowledging and adjusting to worldwide environmental and economic changes. If you liked this article, then please subscribe to our Free Newsletter for the latest posts on Management models and methods.

Kraljic Matrix – The Chartered Institute of Procurement and Supply

Mintzberg Managerial Roles December 29, In that case, discussions must be had with the supplier and new supply terms and conditions should be drawn up. Newer Post Older Post Home. Voluntary supply chain security program impacts: Just like strategic items, these items krzljic a large financial impact on our organization, however, the item is in abundant supply.

World Customs Journal, 1 2 Because of their large financial impact, these items are important to the organization. His 2×2 matrix is set out to provide companies with a way to distinguish between different types of purchasing strategies which maximise buying power while minimising supply risks.