Here you find two connected cases to be used in buyer training, Kraljic Matrix Positioning and Risk analysis with development of risk reduction plan.
Content…
Case: Kraljic Matrix Positioning of Top Suppliers
Read and answer the questions.
Background & Reading Material (15 min)
Following a comprehensive spend analysis of all procurement categories—direct and indirect—Acme Manufacturing reviewed 450 active suppliers with a total annual spend of SEK 800 million. The spend analysis highlighted that the top 20 suppliers account for 75% of the total value (SEK 600 million), while the remaining 430 suppliers represent the other 25% (SEK 200 million). The analysis also revealed that 60% of total spend is concentrated in just 10 direct-material categories, and that supplier lead-time variability ranges from 1 day to 30 days across geographies.
Acme’s procurement team now needs to position each of these top 20 suppliers in a Kraljic Portfolio Matrix—assessing Purchase Complexity (supply risk) against Profit Impact (spend volume and criticality).
Below is the spend analysis summary for the top 20 suppliers: The procurement leadership now needs to position each supplier in a Kraljic Portfolio Matrix—assessing Purchase Complexity (supply risk) against Profit Impact (spend volume and criticality).
Acme categorizes Purchase Complexity by factors such as supplier market complexity, number of competitors, lead-time variability, and quality risk. Profit Impact is measured by annual spend share and the strategic importance of the supplied category to Acme’s core operations.
Below is the spend analysis summary for the top 20 suppliers supporting Kraljic Matrix Positioning:
| # | Supplier Name | Annual Spend (SEK m) | Product/Service | Competitors Present | Category Strategy Fit |
|---|---|---|---|---|---|
| 1 | Svensk Bearings AB | 120 | Bearings (standard) | Yes (2 other regional) | Leverage volume discounts; ensure deep strategic partnership |
| 2 | Global SealCo | 95 | Seals & gaskets | Yes (3) | Ensure supply continuity; explore secondary sources |
| 3 | Nordisk Steel | 85 | Raw steel sheets | Few (1 major) | Critical; secure long-term contract with price escalators |
| 4 | Baltic Fasteners | 75 | Bolts & fasteners | Many (5 local) | Tactical; consider alternative low-cost sources |
| 5 | ElectroMotion Inc | 60 | Electric actuators | Few (2) | Leverage for innovation; joint development possible |
| 6 | Plastic Solutions | 55 | Plastic housings | Yes (4) | Balance cost vs. risk; monitor quality closely |
| 7 | PneumaTech | 50 | Pneumatic valves | Few (2) | Strategic; evaluate dual-sourcing |
| 8 | Fast Flow Fluids | 45 | Hydraulic fluids | Yes (3) | Routine; consider vendor-managed inventory |
| 9 | TechChem Supplies | 40 | Specialty chemicals | Few (2) | High risk; develop rigorous quality audits |
| 10 | Nordic Cables | 38 | Cable assemblies | Many (4) | Tactical; rotate suppliers based on performance |
| 11 | Secure IT Services | 35 | IT infrastructure support | Yes (3) | Leverage for strategic digital initiatives |
| 12 | OfficePro Sweden | 30 | Office supplies | Many (10+) | Routine; implement catalog-based procurement |
| 13 | GreenEnergy Partners | 28 | Utility and energy contracts | Few (2) | Strategic; long-term green energy commitment |
| 14 | TravelEase | 25 | Corporate travel services | Many (8) | Tactical; enforce policy compliance |
| 15 | MedTech Equip | 22 | Safety & protective gear | Few (2) | Critical; ensure certification and audit frequency |
| 16 | PaperWorks | 20 | Printing & packaging | Yes (5) | Routine; explore digital alternatives |
| 17 | CleanSite Services | 18 | Facility cleaning services | Many (6) | Tactical; consolidate contracts regionally |
| 18 | LogisticChain | 15 | Freight forwarding | Few (3) | Strategic; critical for lead-time stability |
| 19 | SpareParts Direct | 12 | Maintenance spare parts | Many (7) | Tactical; consider emergency stocking with local partners |
| 20 | Custom Software Dev | 10 | Tailored procurement systems | Few (1) | Strategic; integrate and scale custom modules |
Kraljic Matrix Positioning: Students should use the above summary to place each supplier in one of the four quadrants of the Kraljic Matrix:
- Leverage Items (High profit impact, low supply risk)
- Strategic Items (High profit impact, high supply risk)
- Bottleneck Items (Low profit impact, high supply risk)
- Non-Critical Items (Low profit impact, low supply risk)
Group Discussion Questions (30 min)
- Position each of the 20 suppliers in the appropriate Kraljic quadrant and justify your placement based on spend impact and supply risk.
- For suppliers in the Strategic quadrant, propose relationship management tactics (e.g., joint development, strategic partnerships).
- For Bottleneck items, suggest risk mitigation actions (e.g., safety stock, dual-sourcing, capacity contracts).
- How can Acme optimize its approach to Leverage items to maximize cost savings while maintaining quality?
- What process controls or automation could be applied to manage Non-Critical items more efficiently?
Class Debrief & Reflection (30–40 min)
- Groups present their mapping of suppliers onto the Kraljic Matrix (5 min per group).
- Compare and discuss differences in quadrant placements and rationale.
- Identify key strategic actions for each quadrant and draft an action plan.
- Summarize how this exercise informs category strategy and risk management for Acme.
Reflection: Positioning the Offering, Not Just the Supplier
While this exercise asks you to map suppliers, remember that the Kraljic Matrix fundamentally positions the products or services those suppliers deliver. A single supplier may span multiple quadrants if it provides several categories with differing risk profiles and profit impacts. Conversely, similar products from different suppliers should occupy the same quadrant based on their market complexity and strategic importance.
Key takeaways:
- Product vs. Supplier Focus: Always analyze the characteristics of each product or service (e.g., critical bearings versus routine fasteners), then associate that positioning back to the supplier relationship.
- Multiple Quadrants: A supplier like ElectroMotion Inc. may deliver high-value electric actuators (Strategic quadrant) and lower-value ancillary parts (Leverage quadrant). Your strategy should tailor engagement per product line.
- Dynamic Reassessment: As spend volumes, market conditions and supply risks evolve, product positioning may shift. Revisit the matrix periodically and adjust supplier strategies accordingly.
- Integrated Strategy: Use quadrant-based tactics—partnering closely on Strategic items, leveraging volume on Leverage items, ensuring backup plans for Bottleneck items, and streamlining processes for Non-Critical items—to build a cohesive category management approach.
By focusing on the offering—and not just the supplier—you can develop nuanced, category-specific strategies that balance cost optimization, risk mitigation, and long-term value creation hence Kraljic Matrix Positioning is part of a Buyers every day activities.
Case : Supply Chain Risk Assessment & Mitigation
Read and answer the questions.
Background & Reading Material (15 min)
In global procurement, various risk factors can threaten supply continuity, increase costs, or damage reputation. Common risks include:
- Geographic Concentration: Dependence on suppliers in a single region exposes Acme to political instability, natural disasters, or regional infrastructure failures.
- Single Sourcing: Relying on one supplier for a critical item creates vulnerability if that supplier faces capacity constraints, quality issues, or insolvency.
- Technology/Equipment Dependency: If a supplier uses proprietary tools or unique production equipment, switching to alternatives becomes difficult and costly.
- Supply Chain Disruptions: Events like shipping port closures, customs delays, or logistics bottlenecks can delay deliveries and require expensive expedited shipments.
- Supplier Relationship Weakness: Poor communication, lack of performance visibility, or misaligned incentives can erode trust and slow issue resolution.
- Regulatory and Compliance Risk: Changes in trade policies, tariffs, or environmental regulations may suddenly make a supplier non-compliant or uncompetitive.
- Financial Instability: Suppliers with weak balance sheets or cash-flow issues may fail to invest in quality, sustainability, or capacity expansions.
From the previous spend analysis, 10 suppliers are selected that illustrate a range of these risks. The suppliers covered in this risk assessment case are:
- Nordisk Steel (Raw steel sheets) – Geographic concentration in one European mill; exposed to EU energy cost fluctuations.
- Jiangsu Precision Parts (Machined components) – Single-source dependency from China; risk of geopolitical tariffs and customs delays.
- Supplier A (Bearings) – Proprietary bearing design requiring a single specialized production line; switching costs are high.
- Global SealCo (Seals & gaskets) – High logistics risk due to factory location near congested port.
- ElectroMotion Inc (Electric actuators) – Complex technology dependency; limited alternative suppliers.
- Plastic Solutions (Plastic housings) – Financial instability warnings from credit agencies; recent payment delays recorded.
- Fast Flow Fluids (Hydraulic fluids) – Environmental compliance risk; chemical formulations subject to new regulatory restrictions.
- TravelEase (Corporate travel services) – Service quality risk and limited alternatives in remote regions.
- CleanSite Services (Facility cleaning) – Single regional provider; no backup in certain geographies.
- SpareParts Direct (Maintenance spare parts) – High emergency order rate; poor order accuracy and delivery reliability.
For each supplier, the following risk factors should be considered:
- Risk Type(s): Geographic, single-source, technology, logistics, financial, compliance, relationship.
- Impact Severity: High / Medium / Low, based on potential cost or downtime implications.
- Likelihood: High / Medium / Low, based on historical performance and external environment.
Use these factors to calculate a composite risk score (e.g., weighted sum or risk matrix).
Group Discussion Questions (30 min)
- For each of the 10 suppliers, outline the key risk factors and assign an Impact Severity and Likelihood rating.
- Calculate a composite risk score for each supplier and rank them from highest to lowest risk.
- Propose specific mitigation strategies for the top 3 highest-risk suppliers (e.g., dual-sourcing plans, inventory buffers, contractual clauses).
- How would you integrate ongoing risk monitoring into Acme’s procurement processes?
- Discuss governance and escalation paths for when a supplier’s risk score crosses critical thresholds.
Class Debrief & Reflection (30–40 min)
- Groups present their risk scoring approach and prioritized mitigation plans (5 min per group).
- Compare scoring methodologies and debate weighting choices.
- Review proposed monitoring mechanisms and escalation protocols.
- Summarize how proactive risk management supports Acme’s procurement resilience and strategic goals.
Reflection: Embedding Risk Management into Procurement Strategy
Effective risk management is not a standalone activity but an integral part of category management and every sourcing event. While tools like the Kraljic Matrix help visualize risk versus profit impact at a portfolio level, day-to-day procurement decisions—from sourcing to contract negotiations—must incorporate dynamic risk assessments. The COVID-19 pandemic, global transport disruptions, and rapidly changing tariff environments have underscored how interdependent and fragile global supply chains can be. Many companies are now questioning whether unfettered globalization is the optimal path forward.
Key considerations:
- Holistic Category Management: Risk assessments should feed directly into category strategies, influencing supplier selection, negotiation tactics, and inventory policies.
- Sourcing Event Integration: Each RFx and contract renewal should include a standardized risk check—covering geographic, supplier, technology, compliance, and relationship factors.
- Supply Chain Visibility: Investing in analytics and real-time monitoring platforms helps identify emerging disruptions early, allowing for swift mitigation.
- Resilience over Cost: Balancing cost optimization with resilience—through dual sourcing, nearshoring, or strategic stock buffers—builds a more agile and robust supply chain.
- Governance & Escalation: Establish clear ownership of risk metrics and escalation paths, ensuring that high-risk alerts trigger cross-functional response teams.
By weaving risk management into every layer of procurement, Acme can transform reactive firefighting into proactive resilience building—preparing not just for the next disruption, but for long-term sustainable growth.
Courses and blogpost supporting cases
These recommended courses and reading support both Kraljic Matrix Positioning and Risk management.
- Online course:
- Blog posts:
Note: Illustration to Cases: Kraljic Matrix Positioning and Risk Management was created by SORA on May 18, 2025.