Supplier Segmentation is the segmenting of suppliers into categories, to separate strategic from non-strategic suppliers and apply different management approaches to them. 

 

Our approach balances current spending, business value from the supplier, costs and risks associated with changing suppliers, and the level of intended future spending or investment when categorising them.

 

Most organisations find that there are usually only one or two handfuls of suppliers that are considered true strategic suppliers or suppliers that are critical to their business.