Kraljic Matrix

The Kraljic Matrix is a widely used procurement model that classifies an organisation's purchases (or categories) along two dimensions — profit impact (importance/spend) and supply risk (complexity/scarcity of the supply market) — to determine the appropriate sourcing strategy for each. Introduced by Peter Kraljic in 1983, it plots spend into four quadrants.

The quadrants call for different approaches: Leverage items (high impact, low risk) — use buying power and competition to drive price; Strategic items (high impact, high risk) — build close partnerships and manage the relationship carefully; Bottleneck items (low impact, high risk) — secure supply and reduce dependence; and Routine/non-critical items (low impact, low risk) — simplify and automate to cut process cost. By mapping spend this way, the matrix helps procurement focus effort where it matters, choose the right tactics for each category, and manage supply risk deliberately. It is a foundational tool of category management and strategic sourcing, giving a simple, powerful framework for prioritising the procurement portfolio.