The Kraljic Portfolio Purchasing Model

The Kraljic Portfolio Purchasing Model helps companies manage their purchasing strategies by dividing procurement items into four categories based on risk and profit impact. Items are classified as leverage, strategic, non-critical, or bottleneck. Leverage items have high profit impact but low supply risk, allowing companies to negotiate better deals. Strategic items are critical for the business and have high supply risk, requiring strong supplier relationships. Non-critical items are low impact and supply risk, so simple procurement suffices. Bottleneck items are high risk but low impact; ensuring supply continuity is essential. This model guides companies to prioritize resources for different types of purchases effectively.