Developing a Procurement Strategy - Krajlic Matrix (PowerPoint PPTX)

Organizations need to understand the difference between procurement and purchasing.

While purchasing relates to ordering the goods from some vendors, procurement is more of a strategic approach, creating the foundation and the guidelines for the purchasing officer or purchaser to know how to order the products the organization needs.

Indeed, depending on the part/product profile and its use as well as its supply risk, the procurement strategy will be different and will need a different approach.

In this presentation, we give you a high-level understanding of how to develop and design a procurement strategy using the Kraljic matric. This model is an easy-to-use model allowing for a quick review of the organization's part list and categorizes them clearly into the best way to handle the procurement.
Once developed, purchasers will only have to follow the strategy to get things done and manage their vendors accordingly.

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This PPT delves into the intricacies of vendor management, guiding you through the stages of developing a strategic procurement choice and supplier management. It emphasizes the importance of preparing for future needs and establishing robust contractual agreements with suppliers. The focus is on performance management and governance principles, ensuring that your procurement strategy is not only effective, but also sustainable.

The Kraljic Matrix is presented as a tool for categorizing items based on their profit impact and supply risk. This segmentation allows for tailored strategies for non-critical items, leverage items, and strategic items. The document outlines practical steps for defining your procurement strategy, including product categorization, supplier listing, and information collection. It also explores different typologies of inter-organizational relationships, from adversarial to collaborative, providing a comprehensive approach to procurement strategy development.