Procurement Maturity Model Definition

The term “Procurement Maturity Model” (PMM) was first coined by Dr. Peter Kraljic in a 1983 Harvard Business Review article. Kraljic described a model for categorizing procurement strategies based on the relative maturity of the market for a given product or service. The PMM has since been expanded upon and is now widely used as a tool for assessing and improving procurement performance.

There are four categories in the PMM:

– Category I: Commodities

– Category II: Strategic Sourcing

– Category III: Spend Analysis and Optimization

– Category IV: Supplier Relationship Management

Each category is further divided into three levels of maturity, with Level 1 being the lowest and Level 3 the highest. The level of maturity is determined by the sophistication of the procurement strategies employed in each category.