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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Newer Post Older Post Home. The power of supply chain segmentation. These are items that have a low financial impact on our organization, however, there is a high supply risk. It aims to remove supply vulnerability as much as possible and maximize our potential buying power.

What is Kraljic Matrix or Supply Chain Portfolio Matrix?

There is a balance of power between the company and the supplier. In the balance of power between kraljuc company and the supplier, the company is the dominant factor.

We will explain what the Kraljic Matrix or the supply chain portfolio matrix is and how to use 7 Kraljic Models to improve various functions across the supply chain. How you then actually manage those suppliers is up to you. Thus, the purchasing strategies we would normally use for these types of items focus around reducing administrative costs and logistical complexity.


Because of their large financial impact, these items are important to the organization. Your rating is more than welcome or share this article via Social media! Henry Mintzberg Organizational Configurations December 18, He holds an M. Mintzberg Managerial Roles December 29, Kraljic Portfolio Purchasing Model4. There is an imbalance of power between the company and the supplier, in which the supplier is the dominant factor.

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. Please enter your comment! Peter Kraljic distinguishes four types of product categories in these two dimensions:.

Always up-to-date with our latest practical posts and updates? You have entered an incorrect email address! Secondly, we need to develop plans to reduce our dependence on this supplier, by adapting our products and investigating alternative products and suppliers.

Related concepts Supplier Segmentation The idea of supplier segmentation is pretty simple – grouping suppliers in a supply base by their impact on the business Rogers, Such products represent a low value and they can be purchased in different varieties and from different suppliers.

The result is that purchasing professionals can prioritize buying activities based on profit impact and level of risks involved.


Please enter your name here. Share Tweet Share Share Pin. These types of products cause the least problems with respect to purchasing performance. Raw materials determine to a large extent the value of the cost price of the finished product.

What are your success factors for the good purchase strategy? This article explains the kraljic portfolio purchasing model in a practical way. Voluntary supply chain security program impacts: This prevents obsolescent stock and excess supplies and this leads to cost reduction.

The Kraljic Matrix | How to Optimize Purchasing Costs and Risks

Ericsson’s proactive supply chain risk management approach after a serious sub-supplier accident. A supplier should not have the upper hand nor have power over an organization. This step-by-step makes it easier to control stock management. In that case, discussions must be had with the supplier and new supply terms and conditions should be drawn up. Although these products are low impact and have an abundant supply, they are nevertheless interesting, because the cost of handling them can often outweigh the cost of the product itself.