Analysis of Material Project Purchasing Strategy Using Kraljic’s Method

The world has seen dramatic changes in the business environment recently. The level of competition between each other is also getting tighter. This competition leads to two factors, which are Customer Relationship Management (CRM) and Supplier Relationship Management (SRM). One of the key components in Supply Chain Management (SCM) is the management of the Supplier Relationship Management (SRM). The construction industry tends to be late in adopting SCM into their management strategies. Contractors are also aware that the key to applying SCM in the construction industry is through proper production planning and purchasing. With these conditions, it is necessary for the company to implement an effective and efficient model of purchasing in order to achieve the expected conditions. A popular purchasing model portfolio used by academics and practitioners is the Kraljic Model, which was found by Peter Kraljic in 1983 and has been used by professionals to analyze purchasing strategies. PT. X is one of the private construction companies in Indonesia that participates in strategic national projects. To limit the quantity of commodity type, spending analysis is performed to discover which commodities give the largest value contribution to the company’s total expenditure in 2015-2017. These commodities are mapped on Kraljic’s matrix based on the supply risk and profit impact factor of each commodity. Based on the analysis results of using the Kraljic’s matrix, PT. X can implement a better purchasing strategy that can maximize the company’s performance, while the company’s Supply Chain Management Division can perform more effectively and efficiently.