The kraljic matrix helps us develop a purchasing strategy for the products and services our organization consumes. Jul 11, 2019 the kraljic matrix helps us develop a purchasing strategy for the products and services our organization consumes. In 1983 kraljic write that purchasing as it was known then and not procurement was carrying out activities routinely. Apr 30, 2019 the kraljic matrix helps us develop a purchasing strategy for the products and services our organization consumes. Ignoring or accepting countless economic and political disruptions to their supply of materials. This matrix helps a company gain an insight into the working methods of the purchasing department and how they spend their time on various products this tool shouldnt be used just for the. Subsequently, it can be concluded whether a product is in the right quadrant or whether it would be better to move it to another quadrant. It aims to remove supply vulnerability as much as possible and maximize our potential buying power. The kraljic matrix is an influential strategic tool to guide managers so that they can recognise the weakness of their organisation and formulate strategies for guarding against supplies disruption lysons and farrington, 2006. The complete kraljic matrix excel file posted by haroun on february 4, 2018 april 1, 2018 we have already shared a matrix file to be used for the visualization of the kraljic portfolio purchasing model that was created by peter kraljic.
This is an evergreen article mainly used by professionals in procurement and supply chain to classify their suppliers and then use this. Peter kraljics matrix is an analysis tool that seeks to map the importance to an organisation of the item being purchased against the complexity of the market that supplies it. Virtually all textbooks teach that the gold standard for a sourcing strategy is the kraljic matrix. His 2x2 matrix is set out to provide companies with a way to distinguish between different types of purchasing strategies which.
One of the most famous portfolio models was introduced. May 23, 2018 the kraljic matrix facilitates the management of a companys inventory. The kraljic model is considered an important reference of the development of the theory in the supply managements area. Fuzzy multiattribute decision making assigns weights to supply risk and profit impact. Purchasing strategies are a significant contributing factor to the overall performance of a firm. In his seminal paper he called attention to the need for companies to attain more effective supply management. There is an imbalance of power between the company and the supplier, in which the supplier is the dominant factor. Commodities are positioned through multidimensional scaling mds. Feb 28, 2017 the kraljic matrix is one of the most effective ways to deliver accurate supplier segmentation. This is a video presentation of the solution that allows to easily create a kraljic matrix and then build a kraljic diagram. Markets have become more dynamic, and the supply situation can change significantly in short time periods.
The kraljic model can be used to analyze the purchasing portfolio of a firm and to support corresponding decisions and actions regarding purchasing of commodities, products or a company. Use pdf export for high quality prints and svg export for large sharp images or embed your diagrams anywhere with the creately viewer. The result is a traditional 2 x 2 matrix the creates quadrants that position a supplier and define a companys strategic approach to that supplier kraljic later made enhancements to the model, including a 3 x 3 version, and there have been many refinements of this by others over the years. Kraljic matrix is divided into 4 quadrants that will show the potential result of the profits that a certain business can have when it is on one axis and see how vulnerable the business will be, with the suppliers disappearance from the other side of the axis. Vlerick sales center article summary series purchasing must. Pdf purchasing strategies in the kraljic matrix a power. The kraljic matrix will work, if we take into account both a buyer and supplier perspective. Using the kraljic matrix doesnt mean that we need to do all the things manually. In supply chain management, the kraljic matrix or kraljic model is a method used to segment the purchases or suppliers of a company by dividing them into four classes, based on the complexity or risk of the supply market such as monopoly situations, barriers to entry, technological innovation and the importance of the purchases or suppliers determined by the. In supply chain management, the kraljic matrix or kraljic model is a method used to segment the purchases or suppliers of a company by dividing them into four classes, based on the complexity or risk of the supply market such as monopoly situations, barriers to entry, technological innovation and the importance of the purchases or suppliers determined by the impact that they have on the. The kraljic was first introduced in 1983, peter kraljic created a matrix called kraljic portfolio purchasing model that could be used to analyse the purchasing portfolio of a company. Kraljic matrix 1 kraljic 1983 suggested that all commodities and all buyer supplier relationships are not to be managed in the same way. Although other models have been developed, kraljics kpm approach has become the dominant methodology built upon in literature and the foundation for purchasing strategies for many organizations.
The famous and well known portfolio model of peter kraljic will be used as starting position. Hence, an increased understanding will be obtained in the differentiation of purchasing strategies of different products. Positioning of commodities using the kraljic portfolio matrix. Application of kraljics purchasing portfolio matrix in. How purchasing practitioners use the kraljic matrix stockholm. Too often purchasing is seen as just an improved operational task. Its purpose is to help purchasers maximize supply security and reduce costs, by making the most of their purchasing power. In 1983, peter kraljic devised a means to segment the supplier base in the article in hbr. Bensaou, 1999 are still referenced on the kraljic model. The kraljic matrix for procurement bellwether software. It identifies the two variables of risk and spend as determining the type of commercial relationships that should be formed for supply agreements. Highlights the kraljic portfolio matrix kpm supports firms in developing purchasing strategies.
Unpicking the kraljic matrix for procurement blog procurious. Pdf application of kraljic s purchasing portfolio matrix in. Apply single and multiattribute utility functions to rankorder products and services based on managerial preferences. The purpose is to investigate how the kraljic model 1983 can be applied in an industrialized housing factory. Kraljics purchasing portfolio model aims at developing differentiated purchasing and supplier strategies through classifying commodities on the basis of two dimensions. Kraljic 1983 suggested that purchasing in many companies is based on routine, transactional activities that afford little strategic consideration to potential economic and political disruptions to materials supplies. 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. Box 2960, 6401 dl heerlen, the netherlands received 2 may 2005. The kraljic matrix is one of the most effective ways to deliver accurate supplier segmentation. Kraljicmatrix is an r package for implementing kraljics 1983kraljic approach to strategically analyze a firms purchasing portfolio. Kraljic 1983 introduced the first comprehensive portfolio approach for purchasing and supply management. Creately diagrams can be exported and added to word, ppt powerpoint, excel, visio or any other document. Being able to adapt to these changes is a critical success factor for procurement.
In 1983, peter kraljic created a matrix called kraljic portfolio purchasing model that could be used to analyse the purchasing portfolio of a company. In 1983, peter kraljic devised a means to segment the supplier base in. This matrix helps a company gain an insight into the working methods of the purchasing department and how they spend their time on various products. Adjusting kraljic tool for construction industry required specific keyfactor selection, then ahp technique for factor prioritization. How purchasing practitioners use the kraljic matrix a relative comparative case study with four big swedish industrial manufacturing companies many manufacturing companies spend more than half o was the kraljic 1983 comprehensive portfolio appr that the supplier side is disregarded. A search after the core concepts of purchasing by raf verheyden with the help of professor dr. Vlerick sales center article summary series purchasing. Purchasing strategies in the kraljic matrixa power and dependence perspective marjolein c.
Supply risk level of rarity and financial risk cost items that are the hardest to attain are those that are of a high supply risk and a high financial risk. The kraljic purchasing portfolio matrix kraljic 1983 advised managers to guard their. After reading you will understand the basics of this powerful purchasing strategy tool. A more objective approach for positioning commodities in the kpm is proposed. Kraljics approach leverages a portfolio matrix that classifies products on the basis of two dimensions. This paper describes the application of kraljic matrix on a large construction industry multinational group, identifying the necessary adaptations of the tool. Kharlamov department of management, economics and industrial engineering, university of aveiro, campus of santiago, 3810193 aveiro. Purchasing strategies in the kraljic matrixa power and. The kraljic matrix facilitates the management of a companys inventory. Keywords business, strategic management, supply chain, supply management, kraljic. Due to this a lot of possibilities to use purchasing as a strategic tool for the organization are.
Pdf purchasing strategies in the kraljic matrix a power and. Feb 04, 2018 the complete kraljic matrix excel file posted by haroun on february 4, 2018 april 1, 2018 we have already shared a matrix file to be used for the visualization of the kraljic portfolio purchasing model that was created by peter kraljic. In many companies, purchasing is relegated to the routine function of an organization and not much attention is paid by. Package kraljicmatrix march 6, 2018 type package title a quanti. This article explains the kraljic portfolio purchasing model in a practical way. Jun 02, 2019 the kraljic matrix helps us develop a purchasing strategy for the products and services our organization consumes. This article will show that purchasing could be more. This is an evergreen article mainly used by professionals in procurement and supply chain to classify their suppliers and then use this classification to manage the relationship with their suppliers. Kraljic matrix of procurement 20022015 vlerick business school. How purchasing practitioners use the kraljic matrix. Despite its age, its a popular and useful model used in companies worldwide. Kraljic portfolio purchasing model, a purchase strategy tool. Pdf positioning of commodities using the kraljic portfolio matrix.
Kharlamov department of management, economics and industrial engineering, university of aveiro, campus of santiago, 3810193 aveiro, portugal email. Not only has it been argued that transitioning purchasing from a tactical to a strategic role provides sustainable competitive advantage, compelling evidence supports the relationship. The kraljic matrix is a strategic tool coin by peter kraljic in 1983 that was intended to guide purchasing managers to recognize here strength and weaknesses of their respective purchasing strategies kralijc 1983. Kraljic matrix is divided into 4 quadrants that will show the potential result of the profits that a certain business can have when it is on one axis and see how vulnerable the business will be, with the suppliers disappearance from the other side of. Gelderman faculty of management sciences mw, open university of the netherlands ounl, p. The complete kraljic matrix excel file the smart manager. In many companies, purchasing, perhaps more than any other business function, is wedded to routine. Application of kraljics purchasing portfolio matrix. The kraljic model is considered an important reference of the development of the. The kraljic matrix has been largely used in many different industries as an efficient tool for developing differentiated purchasing strategies. The kraljic matrix is an extremely valuable tool which allows to look at the procurement holistically.
594 1005 1597 167 216 262 988 1325 678 667 970 1306 448 1137 29 1406 181 108 922 743 1529 332 1464 1546 136 903 1131 314 405 1440 1382 965 1279 20 13 63