The Kraljic matrix (also known as Purchasing strategies matrix) helps us develop purchasing strategies for the products and services used by the organization. It aims to minimize supply vulnerabilities and maximize our potential purchasing power. It helps with supplier inventory management and makes it easier for you to manage supplier relationships. With its help, we can more easily negotiate with strategic partners, the most important long-term contract for your business.
The Elements of Kraljic matrix
Kraljic matrix can be used to prioritise purchases and sort them into four main categories:
Non-critical items - These purchases have little impact on business activities. They have enough supplies, such as office supplies and stationary
Leverage items - These purchases have had a significant impact on the company's business, but they are also well supplied.
Bottleneck items - The commercial risk of these purchases is low, but the supply is limited
Strategic items - Business activities depend on these items. These are often rare or unique resources.
On the horizontal axis, your supply risk goes from low to high. On the vertical axis, you will have a profit impact, running from low to high.
