KRALJIC MATRIX PDF

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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What are your success factors for the good purchase strategy?

The Kraljic Matrix | How to Optimize Purchasing Costs and Risks

Harvard Business Review, 3, No company can allow purchasing to lag behind other departments in acknowledging and adjusting to worldwide environmental and economic changes. Peter Kraljic recommends the following steps in the entire purchasing process:.

Please login here to Download PDF kb. Supply risk This is also defined from high to low. Harvard business review, 61 5 Because of their large financial impact, these items are important to the organization.

Kraljic suggested that purchasing in many companies is based on routine, transactional activities that afford little strategic consideration to potential economic krlajic political disruptions to materials supplies.

Preferably, a product is placed only in one of the quadrants. Most raw materials and substances fall into this category. In that case, discussions must be had with the supplier and new supply terms and conditions should be drawn up. How to cite this article: Although kgaljic 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. How you then actually manage those suppliers is up to you.

These types of products are purchased from one supplier. 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.

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The Kraljic Matrix | How to Optimize Purchasing Costs and Risks

There is a balance of power between the company and the supplier. These types of products cause the least problems with respect to purchasing performance. Voluntary supply chain security program impacts: Activity Log December 29, After reading you will understand the basics of this powerful purchasing strategy tool. Using the Kraljic portfolio purchasing model, an organization can professionalize and improve its purchasing performance which may produce considerable cost savings.

Such an attitude is not only obsolete but also costly Kraljic.

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.

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, Please enter your name here.

The purchasing strategy we would typically use for these types of items is twofold. Retrieved [insert date] from ToolsHero: There is an imbalance of power between the company and the supplier, in which the supplier is the dominant factor. The idea of supplier segmentation is pretty simple – grouping suppliers in a supply base by their impact on the business Rogers, Secondly, we need to develop plans to reduce our dependence on this supplier, by adapting our products and investigating alternative products and suppliers.

This is defined from low to high. Did you find this article interesting? The result is that purchasing professionals can prioritize buying activities based on profit impact and level of risks involved.

The Kraljic Matrix helps us develop a purchasing strategy for the products and services our organization consumes. Kraljic portfolio purchasing model. Such products represent a low value and they can be purchased in different varieties and from different suppliers.

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Kraljic Matrix

Raw materials determine to a large extent the value of the cost price of the finished product. Not a CIPS member? These items do not represent a high value but they are a vulnerable factor in the entire supply chain. Purchasing must become supply management. It represents ‘supply risk’ horizontal axis and ‘profit impact’ vertical axis and offers four product classification quadrants Caniels and Gelderman, A simple framework can help you figure out the answer.

If you truly want to develop a comprehensive supplier management strategy, then this is the area you should focus on first. Newer Post Older Post Home. Strategic Items These items have a large financial impact on our organization.

Share Tweet Share Share Pin. Do you recognize the practical explanation or do you have more suggestions? By concluding good framework agreements and drawing up targeted pricing, the relationship between the company and the supplier continues to be in harmony. There may be a balance of power between the company and the supplier, but when this supplier ceases to deliver, purchasing stagnates.

Bottleneck Items These are items that have a low financial impact on our organization, however, there is a high supply risk. To what extent are the materials up-to-date and have the latest technology and materials substitutions been used?

Non-critical Items These are items that have a low financial impact on our organization and are also in abundant supply, such as office supplies. These are products that are essential for the production process but they are difficult to obtain.

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