Kraljic Matrix

The Kraljic Matrix facilitates the management of a company's inventory. The matrix relies on two factors when considering items needed: "Supply Risk" (level of rarity) and "Financial Risk" (cost) Items that are the hardest to attain are those that are of a high supply risk and a high financial risk; those that are easiest to obtain are those that are of a low supply risk and low financial risk.

At a very high level, the Kraljic Matrix is used in the context of business.

Kraljic Matrix

What is the Kraljic Matrix?

A visual explanation is shown in the image above. The Kraljic Matrix can be described as a matrix with the following quadrants:

  1. High Supply Risk; Low Financial Risk: Contains the items that are scarce but not financially burdensome to the company.
  2. High Supply Risk; High Financial Risk: Contains the items that are scarce and financially burdensome to the company.
  3. Low Supply Risk; Low Financial Risk: Contains the items that are easy to come by and not financially burdensome to the company.
  4. Low Supply Risk; High Financial Risk: Contains the items that are easy to come by but financially burdensome to the company.

What is the purpose of the Kraljic Matrix?

When certain items are needed for a company to successfully operate, a method is needed to manage the inventory. Some items are easy to acquire, but sometimes it is necessary to search for a rare item and spend an excessive amount of money for its attainment. The Kraljic Matrix takes these factors into consideration and supplies the user with a helpful method of categorizing needed items.

Items that involve high supply risk and low financial risk are those that are hard to attain, but not expensive. These may include specialized items that are not manufactured in a large volume or items that are extremely popular, thus hard to come by.

Items that involve high supply risk and high financial risk are those that are hard to attain and expensive. These may include items such as gold or other precious metals- these are the hardest to obtain. Items that involve low supply risk and low financial risk are those that are easy to attain and not expensive. These items are in high supply and fairly cheap- they are the easiest to obtain. Items that involve low supply risk and high financial risk are those that are easy to attain and expensive. These may include machines and equipment.


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What templates are related to Kraljic Matrix?

The following templates are categorized as business and are therefore related to Kraljic Matrix: Gap Analysis Matrix, Risk Analysis Matrix, Risk Value Matrix, TOWS Analysis Matrix, Innovation Management Matrix, PESTLE Analysis Template, Stakeholder Analysis Grid, Customer Satisfaction Matrix. You can browse them using the menu above.

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