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

 

Our approach balances current spending, business value from the vendor, costs and risks associated with changing vendors, 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 vendors or vendors that are critical to their business.