Kraljic Matrix: Categorizing Procurement Strategies PPT

The Kraljic Matrix is a strategic tool designed to enhance procurement processes by classifying purchases based on 2 key dimensions: profit impact and risk/complexity. This PPT slide, part of the 29-slide Kraljic Matrix PowerPoint presentation, outlines 4 distinct categories of purchases, each requiring tailored strategies to optimize procurement effectiveness.

At the top left, "Leveraged Purchases" are characterized by high profit impact, but low risk. These items typically have multiple suppliers, allowing organizations to negotiate favorable terms. The focus here is on maximizing value through effective supplier management and cost reduction strategies.

Moving to the top right, "Strategic Purchases" represent high profit impact and high risk. These purchases are critical to the organization’s success and often involve few suppliers. Companies must develop strong relationships and strategic partnerships to mitigate risks and ensure supply continuity.

On the bottom left, "Non-critical Purchases" are low in both profit impact and risk. These items can be procured with minimal effort and are often standardized. The strategy here is to streamline processes and reduce administrative costs, allowing resources to be allocated to more critical areas.

Lastly, "Bottleneck Purchases" occupy the bottom right quadrant, indicating high risk, but low profit impact. These items may have limited suppliers, which can create vulnerabilities. Organizations need to focus on risk management strategies to secure supply and avoid disruptions.

Overall, the Kraljic Matrix serves as a framework for organizations to categorize their procurement items effectively, enabling more informed decision-making and resource allocation. Understanding these categories is crucial for developing robust procurement strategies that align with organizational goals.

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