Kraljic Matrix

The Kraljic Matrix is a tool used by procurement professionals to categorize and prioritize spend under their control. The matrix was developed by Peter Kraljic, a professor at the University of Cologne, and first published in 1983.

There are four quadrants in the matrix, which are defined by the interaction of two factors: supply risk and buying power. Spend that is considered high risk and high buying power is classified as ‘key spend.’ This type of spend requires close management by procurement, as it can have a large impact on the company’s bottom line.

Spend that is considered low risk and high buying power is classified as ‘volume buy.’ This type of spend can be managed with lower levels of involvement from procurement, as it is not as likely to have a large impact on the company’s bottom line.

Spend that is considered high risk and low buying power is classified as ‘strategic.’ This type of spend should be closely managed by procurement, as it can have a significant impact on the company’s competitive position.

Finally, spend that is considered low risk and low buying power is classified as ‘commodity.’ This type of spend can be managed with lower levels of involvement from procurement, as it is not likely to have a large impact on the company’s bottom line.