How do you communicate and collaborate with your suppliers based on their segmentation and categorization?

1 Segment your suppliers

The first step is to segment your suppliers into different groups based on criteria such as spend, value, criticality, complexity, and dependency. You can use various tools and frameworks, such as the Kraljic matrix, the supplier preferencing model, or the supplier relationship management (SRM) matrix, to help you classify your suppliers into categories such as strategic, leverage, bottleneck, or non-critical. The purpose of segmentation is to understand the relative importance and risk of each supplier and to allocate your resources and attention accordingly.

2 Categorize your suppliers

The next step is to categorize your suppliers based on their performance, risk, and potential. You can use metrics such as quality, delivery, cost, innovation, sustainability, and compliance to evaluate your suppliers and compare them with your expectations and benchmarks. You can also use tools such as the supplier performance index (SPI), the supplier risk index (SRI), or the supplier potential index (SPI) to score and rank your suppliers and to identify gaps and opportunities for improvement. The purpose of categorization is to recognize the strengths and weaknesses of each supplier and to plan your actions and interventions accordingly.

3 Communicate with your suppliers

The third step is to communicate with your suppliers based on their segmentation and categorization. You should communicate with your suppliers regularly and transparently, using appropriate channels and methods, such as email, phone, video conference, or face-to-face meetings. You should also communicate with your suppliers based on their level of importance, risk, and potential, using different communication styles and frequencies, such as strategic, tactical, operational, or transactional. The purpose of communication is to build trust and rapport with your suppliers, to share information and feedback, and to align your goals and expectations.

5 Monitor and review your suppliers

The fifth step is to monitor and review your suppliers based on their segmentation and categorization. You should monitor and review your suppliers periodically and systematically, using relevant data and indicators, such as key performance indicators (KPIs), service level agreements (SLAs), or balanced scorecards (BSCs). You should also monitor and review your suppliers based on their level of importance, risk, and potential, using different evaluation methods and criteria, such as scorecards, audits, surveys, or reviews. The purpose of monitoring and reviewing is to measure and improve your supplier performance, risk, and potential, and to adjust your communication and collaboration strategies accordingly.

6 Update your suppliers

The sixth step is to update your suppliers based on their segmentation and categorization. You should update your suppliers regularly and proactively, using clear and consistent messages and feedback, such as recognition, appreciation, reward, or correction. You should also update your suppliers based on their level of importance, risk, and potential, using different update modes and frequencies, such as formal, informal, frequent, or occasional. The purpose of updating is to reinforce and enhance your supplier relationships, to motivate and incentivize your suppliers, and to ensure your supply chain alignment and adaptation.