Kraljic matrix

In the Kraljic matrix, all products supplied to your organization are categorized using the Kraljic matrix. It sets off product groups on two axes: supply and financial risk. This provides insight into for which products your might want to find a  better supplier. It also makes clear what product groups are most important to your business operations. Based on this analysis, you can thus review your procurement strategy.

To utilize this analysis, product groups need to be set up. Application administrators can do this through Application Management / Analysis / Product Groups.

After selecting a date and administration on the left side, the different product groups will be classified into one of the four quadrants. The x-axis represents the procurement risk (Complexity), and the y-axis represents the impact on the business result (total amount).

1. Strategic products have a high impact on the business result. These are often essential products in the production process. The procurement risk for these products is also high, meaning they are not readily available.
   

1. Leverage products also have a high impact on the business result. However, the procurement risk for these products is low. They can be easily replaced by other comparable products, allowing the purchaser to negotiate the price.

1. Bottleneck products have a low impact on the business result with a high procurement risk. These products have a high procurement risk because there may be few suppliers for them.

1. Routine products have a low impact on the business result and a low procurement risk. These may include office supplies and groceries.
   

By selecting at least a date and administration, you can generate an overview. You can further specify this overview using the other selection fields.

• Related Articles

• How does the Analysis module within the Spend Cloud work?

  With the Analysis module, you have the ability to gain control over expenses and processes using various analyses. We have developed the spend analyses in collaboration with the procurement consultancy firm Het NIC. The graphs are compiled based on ...

• The ABC Analysis

  The ABC analysis examines the purchasing volume at the relationship level. Using the ABC analysis, you can estimate whether there is an excessively large (or, in some cases, too small) number of relationships responsible for a percentage of the ...

• Creditor overview

  In the Creditor Overview, you can view the average processing costs per invoice per creditor. This is based on the number of invoices and the number of invoice lines processed for the respective creditor within the specified period. The total and ...

• Product group overview

  In order to use this analysis, you must set up product groups. Application managers can set this up via Application Management > Analysis > Product Groups At ‘Product group overview’ you will find an overview of relevant information for a specific ...

• Growth of relations

  In the analysis 'Relation Growth,' you can see how many new relationships and/or suppliers have been added from a specific period. This helps you maintain an overview and prevent an excessive growth of relations and suppliers. By doing so, you can ...