Procurement Glossary
Material classes: Systematic categorization for strategic Procurement
November 19, 2025
Material classes form the foundation of a structured procurement strategy and enable the systematic categorization of goods according to various criteria. This classification helps purchasing organizations to develop specific procurement strategies and allocate resources optimally. Find out below what material classes are, which classification methods exist and how you can use them strategically in Procurement .
Key Facts
- Material classes structure the entire procurement portfolio according to strategic aspects
- Classic categories include A, B and C materials as well as strategic, leverage, bottleneck and non-critical materials
- Classification is based on criteria such as procurement volume, market risk and security of supply
- Each material class requires specific procurement strategies and supplier management approaches
- Today, digital tools enable automated and data-based classification
Contents
Definition: Material classes
Material classes are systematic categorizations of procurement objects that enable strategic control of purchasing.
Basic classification approaches
The ABC analysis is the classic approach to material classification. Materials are categorized according to their value share of the total procurement volume:
- A-materials: 70-80% of the procurement value for 10-20% of the items
- B materials: 15-25% of the value for 20-30% of the positions
- C materials: 5-10% of the value for 50-70% of the positions
Material classes vs. material groups
While material groups are primarily differentiated according to functional or technical properties, material classes focus on strategic procurement aspects. Materials management uses both approaches in a complementary manner for holistic control.
Importance of material classes in Procurement
Material classes enable a differentiated procurement strategy and optimize the use of resources. They form the basis for strategic decisions in supplier selection and contract design.
Methods and procedures
Materials are classified using various proven methods that can be combined depending on the company strategy.
Kraljic portfolio matrix
This method classifies materials on the basis of two dimensions: Procurement volume and supply risk. This results in four strategic material classes:
- Strategic materials: high value, high risk
- Leverage materials: high value, low risk
- Bottleneck materials: low value, high risk
- Non-critical materials: low value, low risk
Multi-criteria analysis
Modern approaches take into account additional factors such as technology complexity, supplier availability and sustainability aspects. The requirements analysis provides important basic data for the classification.
Data-based classification
Digital systems enable continuous re-evaluation based on current market data and consumption patterns. The market analysis supports the dynamic adjustment of the classification.
Tacto Intelligence
Combines deep procurement knowledge with the most powerful AI agents for strong Procurement.
Key figures for controlling material classes
Effective key figures enable continuous monitoring and optimization of material classification.
Classification accuracy
The accuracy of the classification is measured by the proportion of correctly classified materials. This key figure should be checked regularly and corrected in the event of deviations:
- Target value: >95% correct classification
- Measuring interval: Quarterly review
- Corrective measures in the event of undercutting
Strategy conformity according to material classes
The proportion of procurement activities that correspond to the defined class strategy shows the quality of implementation. A high level of compliance with Procurement guidelines is crucial for success.
Cost efficiency per material class
The development of procurement costs per material class compared over time shows the effectiveness of the class-specific strategies. Benchmarking in Procurement supports the evaluation of performance.
Risk factors and controls for material classes
Inadequate or outdated material classification can lead to suboptimal procurement decisions and increased costs.
Misclassification and consequences
Incorrect classifications lead to inadequate procurement strategies and can cause both oversupply and undersupply. Regular reviews of the classification are therefore essential for effective security of supply.
Static classification models
Outdated classifications do not take into account market changes or new risk factors. Continuous market monitoring is necessary to ensure that the material classes are up to date.
Complexity risks
Classification systems that are too detailed can make operational handling more difficult and lead to inefficiencies. A balance between the level of detail and practical applicability is crucial for the success of the purchasing organization.
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Practical example
An automotive supplier reclassifies its 15,000 procurement items: electronic components (A material, strategic) are given intensive supplier partnerships, standard screws (C material, non-critical) are procured automatically via e-catalogs. Special alloys are identified as bottleneck materials and secured through dual sourcing. The result: 12% cost savings and 30% fewer delivery failures within a year.
- Systematic re-evaluation of all materials according to the Kraljic matrix
- Development of class-specific procurement strategies
- Implementation of automated procurement processes for C-materials
Current developments and effects
The classification of materials is constantly evolving due to technological innovations and changing market conditions.
AI-supported classification
Artificial intelligence is revolutionizing material classification through automated pattern recognition and predictive analytics. AI in Procurement enables dynamic adaptation of classification based on real-time data and market changes.
Sustainability criteria
ESG factors (environmental, social, governance) are increasingly being integrated into material classification. The Supply Chain Act reinforces this development and makes sustainability aspects a strategic classification criterion.
Supply Chain Resilience
Geopolitical uncertainties and supply chain disruptions are leading to a reassessment of traditional classification approaches. Supply chain resilience management is becoming a central criterion for material classification.
Conclusion
Material classes are an indispensable tool for strategic procurement management and enable a differentiated approach to various procurement objects. Continuous further development through digital technologies and the integration of sustainability criteria make them a dynamic management tool. Successful companies use material classes as the basis for data-based decisions, thereby optimizing both costs and security of supply in the long term.
FAQ
How often should material classes be checked?
An annual basic review is recommended, or quarterly in the case of volatile markets or strategic materials. Automated systems can enable continuous monitoring and adjustments in order to react promptly to market changes.
Which criteria are most important for classification?
Procurement volume, supply risk and strategic importance form the cornerstones. In addition, sustainability aspects, technology complexity and supplier availability are becoming increasingly important for a future-oriented classification.
How many material classes are optimal?
Four to six main classes have proven their worth in practice, as they offer sufficient differentiation with manageable complexity. Too many classes make operational implementation more difficult, too few reduce the strategic control options.
What are typical errors in material classification?
Common mistakes include focusing exclusively on volume, neglecting market risks and static classifications without regular updates. The lack of coordination between Procurement and specialist departments also often leads to suboptimal results.
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