SIS Matrix

Strategic Importance of Supply (Value vs. Importance)

What is the SIS Matrix. It is derived from the Kraljic Matrix?
Kraljic Matrix, also known as Purchasing Portfolio Matrix or Supply Chain Portfolio Matrix, is a method developed by Peter Kraljic in 1983. It is used to create a purchasing portfolio by segmenting items (products or inventory or services) into 4 dimensions. The result is that purchasing professionals can prioritize buying activities based on profit impact and level of risks involved.

  • High Value/ High Importance – Strategic item (strategic bid or tender)… go for it!
  • High Value/ Low Importance – Leverage.. Invest or not to invest time/ resources, change strategic direction?
  • Low value/ High Importance – Bottleneck (may link to the strategy but low value (low profit but may have another form of value!)
  • Low value/ Low Importance – No reason for going forward – doesn’t fit with strategic direction and offers no value

Over the years, the Kraljic model was extended and other dimensions are used to segment various issues under the supply chain environment. The Kraljic model can be applied to the bidding and tendering process as is the case here.