What quadrant of the Kraljic matrix is characterized by low profit margins and high supply risk?

The quadrant of the Kraljic matrix that is characterized by low profit margins and high supply risk is the Bottleneck quadrant. In this area, organizations face significant supply constraints and reliance on specific suppliers. Although these items may not contribute significantly to overall profit margins, their critical nature means that any disruptions or shortages can have a substantial impact on production and operations.

The key feature of the Bottleneck quadrant is the challenging balance between managing supplier relationships and ensuring consistent supply, which can be complicated by potential market volatility or limited supplier options. Companies must find ways to mitigate risks associated with these suppliers to safeguard their supply chain, even though the financial contribution from these items is comparatively low. This focus helps businesses strategically navigate challenges associated with high operational dependency on these procurement categories.