Peter Kraljic proposed in 1983 that you should not manage every purchase the same way. His matrix sorts what you buy by two questions: how much it affects your results, and how risky its supply is.
The four segments
- Strategic (high impact, high risk): partner closely, plan jointly, secure supply.
- Leverage (high impact, low risk): use competition; run RFQs and auctions.
- Bottleneck (low impact, high risk): secure supply, find alternatives, hold safety stock.
- Routine (low impact, low risk): simplify and automate; reduce the effort spent.
How to score
For impact, look at spend, share of cost of goods and effect on quality. For risk, look at the number of alternatives, switching cost, supplier concentration and market volatility. A simple 1 to 5 score on each axis is enough to start.
What it changes in practice
The segment sets how often you review a supplier, how deep the audit is, and how much attention the relationship gets. Strategic suppliers are re-qualified often. Routine ones should cost you almost no management time.
Common mistakes
- Doing it once and never updating it.
- Scoring by gut feel without recording why.
- Treating the matrix as the answer rather than a starting point for discussion.