Describe Kraljic's Portfolio Matrix and explain its purpose, please consider the mentioned below
and give an example Procurement managers must continually be aware of the supply and
demand characteristics of the raw materials, component parts, and supplies they purchase.
Kraljics Portfolio Matrix is used by many managers to classify corporate purchases in terms of
their importance and supply complexity with a goal of minimizing supply vulnerability and
getting the most out of the firms purchasing power. The matrix delineates four categories: 1.
Non-Critical (low importance, low complexity), 2. Leverage (high importance, low complexity),
3. Strategic (high importance, high complexity), and 4. Bottleneck (low importance, high
complexity). The key will be for procurement to work with other functional areas to identify the
most appropriate segmentation dimensions for their firm. This segmentation should also be
reviewed and updated on a regular basis..
Kraljic's Portfolio Matrix: Classifying Purchases by Importance and Complexity
1. Describe Kraljic's Portfolio Matrix and explain its purpose, please consider the mentioned below
and give an example Procurement managers must continually be aware of the supply and
demand characteristics of the raw materials, component parts, and supplies they purchase.
Kraljics Portfolio Matrix is used by many managers to classify corporate purchases in terms of
their importance and supply complexity with a goal of minimizing supply vulnerability and
getting the most out of the firms purchasing power. The matrix delineates four categories: 1.
Non-Critical (low importance, low complexity), 2. Leverage (high importance, low complexity),
3. Strategic (high importance, high complexity), and 4. Bottleneck (low importance, high
complexity). The key will be for procurement to work with other functional areas to identify the
most appropriate segmentation dimensions for their firm. This segmentation should also be
reviewed and updated on a regular basis.
