ABSTRACT
Dr Peter Kraljic was the first academic to bring portfolio models into the procurement arena. He developed his matrix in the early 1980s, with the aim of demonstrating how much time buyers should focus on managing different categories of expenditure within an organisation. The matrix is based on two dimensions; a simplified classification of an organisation’s expenditure on goods and services in terms of the profit impact and supply risk. Kraljic’s Matrix is used extensively within the procurement and supply chain arena. It is often carried out at the planning stages when developing a sourcing strategy for either the function or individual categories of expenditure. Many consulting firms have adapted and/or oversimplified Kraljic’s Matrix in an attempt to pass off the model as their own. Kraljic’s Matrix has generated much discussion and debate with some claiming it a panacea and others considering it to be extremely limited in application.
