The Kraljic Matrix is a procurement tool that can be used to help organizations make better sourcing decisions. It provides a framework for assessing the relativeimportance of different factors when making these decisions. The matrix can be applied in both strategic and tactical situations, and can be used to assess both supplier performance and potential new suppliers. In this article, we will discuss what the Kraljic Matrix is, how to use it, and the benefits of usingit!
The Kraljic Matrix was developed by Slovenian Peter Kraljic in 1983. It is a simple yet powerful tool that can be used to assess the relative importance of different factors when making sourcing decisions. The matrix has two dimensions:
The Kraljic Matrix can be applied in both strategic and tactical situations. In strategic situations, it can be used to assess the relative importance of different factors when making decisions about which suppliers to partner with. In tactical situations, it can be used to assess the relative importance of different factors when deciding whether or not to source a particular product or service from a particular supplier.
There arefour quadrants in the Kraljic Matrix:
The Kraljic Matrix is a valuable tool for managing risk in complex sourcing decisions. By assessing the relative importance of different factors, it can help buyers identify which suppliers they should partner with and which products or services they should source from those suppliers. In addition, the matrix can be used to assess the impact of changes in supplier power or procurement vulnerability on the buyer's exposure to risk.
Five examples of profit impact:
Five examples of procurement vulnerability:
The Kraljic Matrix is a valuable tool for managing risk in complex sourcing decisions. However, there are some practical problems with using the matrix:
There are a few different strategies that can be derived from the Kraljic Matrix:
This example of the Kraljic Matrix is based on product categories. Another variant of the Kraljic Matrix is to plot the suppliers in the matrix. This example is created by our algorithmwhich makes use of a quantitative framework. Want to know more, go to:
Quantative Kraljic Matrix