Relationship Segmentation Procurement Template10 Jun 2017
Segment Key Suppliers During Strategy Development
This is the tenth procurement template, in our blog series 10 free procurement templates in 10 weeks. Procurement uses the relationship segmentation Excel template to segment buying categories and suppliers.
Suppliers are Segmented into Three Tiers
The procurement sourcing team scores economic and compatibility criteria on a scale of one through five. In all, there are 10 criteria for evaluation on the Excel template. The rating scale for determining each tier is as follows;
- Tier 1 Strategic Relationship - score greater than 20 points
- Tier 2 Preferred Relationship - score greater than 15 and less than 20
- Tier 3 Transactional Relationship - score less than 15
Putting suppliers in the correct tier will drive purchasing power for your organization.
Economic Drivers for Relationship Assessment
The five economic areas evaluated by the procurement sourcing team are:
- Buyer View of Category - buying category assessment from transactional (low value) to strategic (high value)
- Supply Chain Impact - the probability that supplier will partner to significantly optimize total cost and value.
- Innovation Potential - supplier’s capability to increase innovation for our organization
- Profit Stability/Growth - the financial and economic strength of supplier’s company
- Supplier View of Buyer - the relative importance of our company and organization to the supplier
Compatibility Drivers for Relationship assessment
The five compatibility areas evaluation by the procurement sourcing team are:
- Strategic Fit - overall fit of business strategies of the supplier
- Processes & Technology - compatibility of supplier’s business processes and technology
- Close Proximity - supplier participates in similar or compatible market
- Assets & Resources - degree to which a supplier partnership can share assets and resources
- Corporate Compatibility - commitment and support to partnering for achievement of long-term goals
Understanding Compatibility Drivers Increases Purchasing Power
Matching category needs with supplier capabilities will increase purchasing power. For example, a procurement category that drives significant value for the organization should not be supported by a supplier with only transactional capabilities. Procurement will drive purchasing power by developing suppliers that can achieve strategic value.
Here is a screenshot of the relationship segmentation assessment template.
If you have questions or comments please contact me through this link: http://purchasingtoolpak.com/#contact
Here is a list of all of the free procurement templates that help drive purchasing power for weeks one through ten.
Week 1: sourcing strategy template
Week 2: request for quotation template
Week 9: stakeholder-feedback-template
Week 10: relationship segmentation template