Suppliers’ Segmentation: Analysis of Current Tools and Development of New Approach to Problem Solution

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MAGAZINE  №5 (94) October 2019


CATEGORY  Analysis in logistics and SCM Logistic integration and coordination Sourcing Modern concepts and technologies in logistics and SCM



The article provides an overview of approaches for supplier segmentation: in particular, different matrices for evaluation (standard and modified) as well as maturity models and questionnaires. Therefore, the analysis of the advantages and disadvantages of these methods is carried out. It is concluded that most methods give only general recommendations that do not allow to make a decision on specific tools to improve relationships.
The authors develop a two-stage procedure for the suppliers' classification. The first stage is carried out based on ABC analysis and the second takes into account two synthesized criteria for evaluating purchased resources and suppliers, which, in particular, include the costs of switching to other resources, the product differentiation level and meeting planning key performance indicators by suppliers. A matrix for tool selection to improve suppliers' relationships in accordance with the results of their segmentation is developed.
This procedure is also tested on the example of a telecommunications company and some effects of implementing the selected tool are shown. The limitations associated with the use of the developed tool in practice are determined.

 Electronic version

 Keywords:  supplier procurement purchasing Supplier Relationship Management supplier selection VMI EDI

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