Classifying suppliers into strategic tiers based on spend volume, criticality, risk profile, and performance to allocate management effort proportionally.
Supplier segmentation is the process of classifying suppliers into strategic tiers based on criteria such as spend volume, business criticality, risk profile, and performance history. It enables organizations to allocate management effort and resources proportionally.
Common segmentation models include the Kraljic Matrix, which categorizes suppliers along dimensions of supply risk and profit impact. Strategic suppliers receive the most attention through joint business reviews, innovation partnerships, and dedicated relationship managers. Supplier segmentation insights inform sourcing strategies when selecting manufacturers on FindMyFactory.