A car manufacturer orders engine components from a supplier.

Using Kraljic’s Portfolio Matrix, CIPS classifies items based on:

Financial impact

Supply risk

Engines have:

High financial value

High supply risk, as production cannot proceed without them

This places the supplier firmly in the strategic quadrant, requiring close relationship management, risk mitigation, and long-term collaboration.

L4M6 Reference:

Learning Outcome 2: Understand supply positioning and risk

Topic: Kraljic portfolio analysis

CIPS L4M6 Study Guide – Strategic items and supplier relationships