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- SRM Tribe - Matt
- Jul 27, 2025
- 4 min read
If you're managing hundreds, or even thousands of suppliers, and your inbox is overflowing with noise, how do you know where to focus? Which suppliers deserve strategic time and energy, and which ones need a slick, low-touch process?
Enter the Kraljic Matrix.
Originally developed by Peter Kraljic back in 1983, this classic procurement tool helps organisations segment their supplier base and prioritise their supplier management efforts. And while the world’s changed a lot since the ‘80s, the logic behind the matrix still holds strong, especially when paired with modern SRM thinking.
What is the Kraljic Matrix?
The Kraljic Matrix is a simple 2x2 model that segments suppliers (or categories) based on:
Business Impact (i.e. how important the supplier or category is to your operations)
Supply Risk (i.e. how risky it would be if the supply was disrupted or the supplier failed)
By scoring suppliers across these two dimensions, you end up with four quadrants:
🟦 Leverage Suppliers
High business impact, low supply riskThese are suppliers where you spend a lot, but you’ve got plenty of alternatives in the market. Think commoditised materials, packaging, or logistics partners.
✅ Your move: Use your buying power. Competitive tension works well here.
🟥 Bottleneck Suppliers
Low business impact, high supply riskThey don’t drive the top line, but if they disappeared, you’d feel it. Maybe it’s a niche part, a specialist repair service, or a tiny supplier with a unique licence.
✅ Your move: Secure the supply. Explore buffers, dual sourcing or closer monitoring.
🟩 Strategic Suppliers
High business impact, high supply riskThis is your core. The suppliers that make your product possible or break it. Few alternatives, high collaboration potential, shared risk and value.
✅ Your move: Partner up. These are the relationships where SRM earns its keep.
🟨 Routine (or Non-Critical) Suppliers
Low business impact, low supply riskThink stationery, PPE, or general services. Useful, but not something to lose sleep over.
✅ Your move: Automate and streamline. Think catalogues, low admin, minimal oversight.
Why It Still Matters
The Kraljic Matrix might be decades old, but it’s still the most practical way to cut through complexity and start thinking intentionally about your supplier base. It’s not about boxing suppliers in permanently, it’s about deciding where to invest your limited time, effort, and governance.
It also pairs beautifully with SRM. Want to know where to build strategic relationships? Where to deploy relationship managers? Where to embed innovation pathways? Kraljic points the way.
A Word of Caution
It’s tempting to score suppliers once and move on. But risk changes. Business models evolve. Supplier relationships mature.
Make the Kraljic Matrix part of a living segmentation model, updated at least annually, and adapted to your supply strategy. And if you’re really serious? Use it alongside other lenses like ESG risk, innovation potential, or digital maturity.
Ready to Make It Practical?
At SRM Tribe, we’ve built a simplified segmentation tool that brings the Kraljic Matrix to life, complete with automated scoring, dropdowns, and segment recommendations. It’s designed to give you a quick, practical starting point to cut through the noise and get clarity.
But let’s be clear:👉 This isn’t a comprehensive supplier segmentation template.
It’s a foundation. A framework. Something you can build on using your own criteria, like ESG performance, supplier innovation potential, contractual complexity, or digital integration levels.
Your business is unique. Your supply base is complex. So your segmentation approach should reflect that. The Kraljic Matrix is a smart place to start, but the real value comes when you adapt it to suit your reality.
How to Use the Kraljic Matrix Supplier Segmentation Tool
This guide helps you segment suppliers into Strategic, Leverage, Bottleneck, or Routine based on their supply risk and business impact.
✅ STEP 1: Enter Supplier Information
In the Excel sheet:
Supplier Name – Type the supplier's name.
Category – State what goods or services they supply.
Annual Spend (£) – Add your annual spend with this supplier.
✅ STEP 2: Score the Supplier (Dropdowns)
Use the dropdowns in columns D to F to rate each supplier:
Column | What to Score | Options |
D | Spend Score | 1 = Low, 2 = Medium, 3 = High |
E | Supply Risk | 1 = Low, 2 = Medium, 3 = High |
F | Business Criticality | 1 = Low, 2 = Medium, 3 = High |
👉 Tip: Use your judgment based on how important and replaceable the supplier is.
✅ STEP 3: Review the Results
The tool automatically calculates:
Column | What It Tells You |
G | Total Score – Weighted score based on your inputs |
H | Segment – Suggests a relationship model (e.g. Strategic, Preferred) |
I | Kraljic Quadrant – Suggests your strategic approach |
🔲 Kraljic Quadrants Explained
Quadrant | What it Means | Your Approach |
Strategic | High risk, high importance – critical for success | Build partnerships, joint innovation, SRM |
Leverage | Low risk, high importance – high spend, many suppliers | Use your buying power, competitive sourcing |
Bottleneck | High risk, low importance – niche supply, potentially disruptive | Secure supply, manage risk carefully |
Routine | Low risk, low importance – easy to buy, little impact | Streamline processes, automate ordering |
📌 Optional Tips:
You can sort or filter suppliers by Segment or Kraljic Quadrant to prioritise actions.
Update scores quarterly or annually as supplier importance and risks change.
If you’d like to talk through what SRM could look like for you what’s realistic, what’s impactful, and what steps to take first, just reach out. We’re always up for a conversation.
📩 Drop us a message. No pressure. Just a practical chat.