Good relationships with suppliers are essential for running successful businesses. Managing supplier relationships can be a challenging and resource intensive operation. It would also require time and energy to be invested. Hence, it is important that the management identifies priorities in this area and focus their attention there. Segmenting the vendor base is one practical way of accomplishing this task. That is, instead of treating all vendors in equal footing, giving preferential treatment to key vendors is the right way to go. This is especially valid when the business enterprise is fairly large.
The management needs to assess supplier relationships in terms of their complexity and criticality and then prioritize. In order to ascertain how complex the relationship with a particular supplier is, the following factors should be considered: “1.Number of individual relationships (contracts) your organization has with the vendor. 2. Variety of information . . . Read MoreContinue Reading