SC QUALITY GUILDKraljic portfolio matrix
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Score each purchased item or category on supply risk and profit impact. The matrix places it in one of four quadrants (strategic, leverage, bottleneck or non-critical) and shows the purchasing strategy and the supplier quality effort that fits each.
ON THE EXAM · CSQP II.A.4, I.B.4, I.C.2 · FREE · NOTHING YOU TYPE LEAVES YOUR BROWSER
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The model
Peter Kraljic's portfolio model (1983) sorts purchases on two axes. Profit impact is how much the item matters to the business: its share of spend, and its effect on product quality, safety, performance or revenue. Supply risk is how hard it would be to keep getting it: the number of qualified sources, the cost and time of switching, scarcity, lead time, and geographic or regulatory exposure. Splitting each axis into high and low gives four quadrants, and each calls for a different approach.
The four quadrants
- Strategic (high impact, high risk): a custom controller from the only qualified source. Build a partnership: long-term agreements, joint development, shared improvement targets, and a contingency plan. These suppliers get the most supplier quality attention.
- Leverage (high impact, low risk): steel, standard molded parts. Many capable suppliers compete, so use the buying power: bids, volume consolidation, target pricing. Keep quality requirements in every tender, because a price squeeze is often followed by quality slipping.
- Bottleneck (low impact, high risk): a cheap proprietary part with one source. It can stop the line even though it costs little. Secure supply: safety stock, longer contracts, a second source, or a redesign onto a standard part.
- Non-critical (low impact, low risk): packaging, fasteners, office supplies. Simplify: catalogs, blanket orders, fewer suppliers, light-touch verification.
How the tool scores
Each factor is scored 1 to 5. Supply risk is the average of the three supply risk factors that are scored; profit impact is the average of the two profit impact factors. An item at or above the dividing line (3 by default) on an axis counts as high. The bubble area shows the annual spend, so a large bubble in the bottleneck quadrant stands out. The share of spend by quadrant is shown under the chart.
The quadrant is a starting point, not a verdict. Items near a dividing line move with a one-point change in a score, so the tool lists them. And low spend is not the same as low importance: a label that carries a regulatory warning has a small spend but a large effect on the product. Score that under impact, and do not cut its controls because it lands in non-critical.
Using it with the other supplier tools
The quadrant sets how much effort each supplier relationship deserves. Strategic suppliers are candidates for preferred, certified and partnership status in the classification system; bottleneck items need a contingency entry in the risk register; leverage items are where a selection matrix and competitive bids pay off.
On the exam
The CSQP Body of Knowledge names the Kraljic portfolio segmentation model as a tool for identifying and categorizing supplier risk (II.A.4). It also supports deciding where to develop partnerships and alliances (I.B.4) and how to rationalize the supply base (I.C.2). Expect to place an item in the right quadrant from a short description, and to choose the strategy that fits it: partner, leverage, secure supply, or simplify.