Supplier Stratification & The Dominick Matrix<\/h3><\/div><\/div><\/div>PurchTips edition #292<\/p>\n<\/div>
Does Supplier Stratification Have To Be Difficult?<\/h4><\/div><\/div><\/div>Supplier management. Supplier collaboration. Supplier development. The way that these terms are used to describe procurement best practices, you might assume that you should be using all of these techniques with each of your suppliers. That is not the case!<\/p>\n
There are two variables that should influence which relationship management approach you should take with a supplier: (1) level of sophistication of that supplier, and (2) the supplier’s materiality to your business. A supplier’s level of sophistication can be either sophisticated or unsophisticated and its materiality to your business can be either tactical or strategic.<\/p>\n
Sophisticated suppliers are those that possess the human talent, technology, resources, effective management, and desire to improve that manifest themselves in continual enhancements in business results for themselves and their customers. Unsophisticated suppliers are those that do not possess those characteristics.<\/p>\n
Tactical suppliers are those that provide a product or service that does not directly affect your organization’s customers’ experience with your organization. Strategic suppliers are those that provide a product or service that does directly affect your organization’s customers’ experience with your organization.<\/p>\n
That leaves four possible combinations to form a supplier stratification model. And, for each combination, there is a different relationship management approach you should take:<\/p>\n
\n- For sophisticated strategic suppliers, use supplier collaboration<\/li>\n
- For unsophisticated strategic suppliers, use supplier development<\/li>\n
- For sophisticated tactical suppliers, use supplier management<\/li>\n
- For unsophisticated tactical suppliers, use supplier rationalization<\/li>\n<\/ul>\n<\/div><\/div><\/div><\/div><\/div>
Do You Want a More Rewarding Procurement Career?<\/h5><\/div>![](\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2020\/12\/spsm_verify.jpg\" "\\"spsm_verify\\"")
<\/span><\/div>Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.<\/p>\n
Earning your SPSM Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!<\/p>\n<\/div>
Download<\/span><\/a><\/div><\/div><\/div>Need Better Performance From Your Procurement Team?<\/h5><\/div>![](\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2020\/12\/services.jpg\" "\\"services\\"")
<\/span><\/div>Are you a procurement leader whose team isn\u2019t achieving the results you know are possible? Maybe it\u2019s not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.<\/p>\n
You need a performance improvement plan that\u2019s easy to implement and quick to produce results. The NLPA can help.<\/p>\n
Download our whitepaper \u201cThe Procurement Leader\u2019s Guide To A More Successful Team.\u201d You\u2019ll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.<\/p>\n<\/div>
PurchTips edition #292<\/p>\n<\/div>
Does Supplier Stratification Have To Be Difficult?<\/h4><\/div><\/div><\/div>Supplier management. Supplier collaboration. Supplier development. The way that these terms are used to describe procurement best practices, you might assume that you should be using all of these techniques with each of your suppliers. That is not the case!<\/p>\n
There are two variables that should influence which relationship management approach you should take with a supplier: (1) level of sophistication of that supplier, and (2) the supplier’s materiality to your business. A supplier’s level of sophistication can be either sophisticated or unsophisticated and its materiality to your business can be either tactical or strategic.<\/p>\n
Sophisticated suppliers are those that possess the human talent, technology, resources, effective management, and desire to improve that manifest themselves in continual enhancements in business results for themselves and their customers. Unsophisticated suppliers are those that do not possess those characteristics.<\/p>\n
Tactical suppliers are those that provide a product or service that does not directly affect your organization’s customers’ experience with your organization. Strategic suppliers are those that provide a product or service that does directly affect your organization’s customers’ experience with your organization.<\/p>\n
That leaves four possible combinations to form a supplier stratification model. And, for each combination, there is a different relationship management approach you should take:<\/p>\n
\n- For sophisticated strategic suppliers, use supplier collaboration<\/li>\n
- For unsophisticated strategic suppliers, use supplier development<\/li>\n
- For sophisticated tactical suppliers, use supplier management<\/li>\n
- For unsophisticated tactical suppliers, use supplier rationalization<\/li>\n<\/ul>\n<\/div><\/div><\/div><\/div><\/div>
Do You Want a More Rewarding Procurement Career?<\/h5><\/div><\/span><\/div>Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.<\/p>\n
Earning your SPSM Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!<\/p>\n<\/div>
Download<\/span><\/a><\/div><\/div><\/div>Need Better Performance From Your Procurement Team?<\/h5><\/div><\/span><\/div>Are you a procurement leader whose team isn\u2019t achieving the results you know are possible? Maybe it\u2019s not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.<\/p>\n
You need a performance improvement plan that\u2019s easy to implement and quick to produce results. The NLPA can help.<\/p>\n
Download our whitepaper \u201cThe Procurement Leader\u2019s Guide To A More Successful Team.\u201d You\u2019ll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.<\/p>\n<\/div>
Supplier management. Supplier collaboration. Supplier development. The way that these terms are used to describe procurement best practices, you might assume that you should be using all of these techniques with each of your suppliers. That is not the case!<\/p>\n
There are two variables that should influence which relationship management approach you should take with a supplier: (1) level of sophistication of that supplier, and (2) the supplier’s materiality to your business. A supplier’s level of sophistication can be either sophisticated or unsophisticated and its materiality to your business can be either tactical or strategic.<\/p>\n
Sophisticated suppliers are those that possess the human talent, technology, resources, effective management, and desire to improve that manifest themselves in continual enhancements in business results for themselves and their customers. Unsophisticated suppliers are those that do not possess those characteristics.<\/p>\n
Tactical suppliers are those that provide a product or service that does not directly affect your organization’s customers’ experience with your organization. Strategic suppliers are those that provide a product or service that does directly affect your organization’s customers’ experience with your organization.<\/p>\n
That leaves four possible combinations to form a supplier stratification model. And, for each combination, there is a different relationship management approach you should take:<\/p>\n
- \n
- For sophisticated strategic suppliers, use supplier collaboration<\/li>\n
- For unsophisticated strategic suppliers, use supplier development<\/li>\n
- For sophisticated tactical suppliers, use supplier management<\/li>\n
- For unsophisticated tactical suppliers, use supplier rationalization<\/li>\n<\/ul>\n<\/div><\/div><\/div><\/div><\/div>
Do You Want a More Rewarding Procurement Career?<\/h5><\/div>
<\/span><\/div>Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.<\/p>\n
Earning your SPSM Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!<\/p>\n<\/div>
Download<\/span><\/a><\/div><\/div><\/div>Need Better Performance From Your Procurement Team?<\/h5><\/div>
<\/span><\/div>Are you a procurement leader whose team isn\u2019t achieving the results you know are possible? Maybe it\u2019s not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.<\/p>\n
You need a performance improvement plan that\u2019s easy to implement and quick to produce results. The NLPA can help.<\/p>\n
Download our whitepaper \u201cThe Procurement Leader\u2019s Guide To A More Successful Team.\u201d You\u2019ll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.<\/p>\n<\/div>
![](\"https:\/\/www.certitrek.com\/nlpa\/wp-content\/uploads\/sites\/5\/2020\/12\/services-contracting.jpg\" "\\"services-contracting\\"")
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