Here is a supply chain word that you might not know: Kraljic.

Definition: It is a method used to segment the purchases or suppliers by dividing them into four classes, based on the complexity (or risk) of the supply market (such as monopoly situations, barriers to entry, technological innovation) and the importance of the purchases or suppliers (determined by the impact that they have on the profitability of the company).

I enjoy this type of chart because it shows me what I should be looking at next. Most of the time, we all spend a lot of effort on either a few commodities or supplies. These tend to be either strategic or bottleneck. When looking at this chart is easier to determine which of the categories or suppliers listed may drift into either of these sectors.

The next step would be to assess the risk and create a plan.



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