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4 different suppliers profiles - Infographic

Posted by Bertrand Duteil on 25/02/2016

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There are four different suppliers profiles, depending on the quality and the type of cooperation businesses have together. Let's have a look at the different profiles and check a couple of tips on how to improve your partnerships.

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4 different suppliers profiles

We can distinguish four different suppliers profiles, depending on the quality and the type of cooperation businesses have together. Here are the different profiles and tips on how to improve your partnerships.

#1 Basic Supplier:

  • Relationship: Product or service as commodity
  • Capability: Meet deal requirements
  • Information Sharing: limited
  • Pricing: Commit to competitive pricing
  • Risk Sharing: Minimal – based on contract
  • Planning horizon: Current deal

#2 Value added Supplier:

  • Relationship: Impacts operational efficiency
  • Capability: Offers improvement suggestions
  • Information Sharing: limited - Tactical
  • Pricing: Contract with fixed terms & options to extend / Audit possible
  • Risk Sharing: Modest – allow incentives & penalties
  • Planning horizon: Ongoing, near-term

#3 Preferred Supplier:

  • Relationship: Process expertise valued
  • Capability: Commit to cost improvement / E-procurement
  • Information Sharing: 2-way controlled dialogue
  • Pricing: Multi-year options with price guarantees / Audit possible
  • Risk Sharing: Moderate – significant incentives
  • Planning horizon: Joint planning with end-point

#4 Strategic Supplier:

  • Relationship: Unique advantage through expertise valued
  • Capability: Ability to assist with market changes & demands
  • Information Sharing: Direct linkage access to parts of company database
  • Pricing: Most favored customer commitment shares pricing model to establish profit margin
  • Risk Sharing: Compensation tied to buying firm’s success / makes joint investments
  • Planning horizon: No end point, joint strategic planning

Tags: Tipps, for supplier manager