How purchasing practitioners use the Kraljic matrix

Abstract: Many manufacturing companies spend more than half of their sales turnover on purchased parts and services. A number of articles have been written and it has increased the interest and enhanced the understanding of how purchasing improvements can contribute to a company’s competitive advantage. The major breakthrough in this area was the Kraljic (1983) comprehensive portfolio approach. No major academic breakthrough has really replaced the model, why it is still seen as relevant. Though there are some aspects of the Kraljic matrix that have been more questioned than others. This concerns for example measurement, lack of guidelines for movements in the matrix and that the supplier side is disregarded. With an explanatory approach we highlight current practices of the Kraljic purchasing portfolio model and how it is used to manage strategic change for critical items. We are using four different but significant purchasing companies – Astra Zeneca, Scania, Skanska and Volvo Penta. We analyse the different case companies based on a relative analysis between the different categories we have choosen to examine. This means that if all categories are graded as balanced (no relative difference), it does not signify how much on an absolute scale the categories are being used. The study reveals a lack of awareness of Kraljic’s working method presented in his article. The four case companies focus on the matrix without explicitly mentioning the general ideas related to the four phases of Kraljic’s working method. With the help of the findings in this study we present a normative working method to deal with earlier critique against the matrix.