Description

Supplier segmentation categorizes suppliers based on their impact on a business to optimize relationship management and resource allocation. By classifying suppliers into strategic, important, and transactional categories, companies can prioritize partnerships, mitigate risks, and improve supply chain efficiency.

• Strategic Suppliers: Critical to a company’s success, these suppliers provide high-value, unique, or hard-to-replace products or services. Companies develop long-term partnerships with them to ensure supply chain stability, innovation, and competitive advantage.
• Important Suppliers: Significant to operations but not as critical as strategic suppliers, these suppliers may offer specialized goods or services, but alternatives exist. This allows companies to maintain performance and efficiency while retaining flexibility.
• Transactional Suppliers: Providing standard, easily replaceable goods or services, these suppliers pose minimal risk or impact on operations. Relationships are typically price-driven and short-term, with a focus on cost efficiency rather than collaboration or innovation.