Supplier Classification

For categorization of suppliers into strategically important suppliers and critical suppliers that have a say in your business, you need to make the difference evident and have to state them in formal terms. The classification adds to the proper allocation of the appropriate resources that further lead to development and management of your business relationship. The supplier classification is an ongoing process under which people assess and classify the suppliers at regular time intervals. Classifying suppliers in turn helps in classification of business.

An organization can classify the suppliers on the basis of the following:

  • Based on a fixed set of classification attributes which is usually global classification.
  • Based on the varied attributes and certain validity criteria that is a flexible mode of classification.
  • A combination of the above two techniques is used in supplier classification

Procedure for supplier classification and its role in business classification:

Under flexible mode of supplier classification, the profile of the supplier is divided on the basis of validity criteria that are defined by the organization say as in form or region or purchasing category. Under the classification profile, the supplier is identified and categorized on the basis of attributes as qualification levels, strategic importance or ABC rating. One can also further define a personal set of attributes for classifying the suppliers of the respective company which are then made available to the organization as added variables for supplier classification profiles. Based on the output results, the organization can move ahead by taking initiating measures either for supplier developments or phasing out suppliers.

SoftNis is an industry leading data management organization which takes into consideration the emerging requirements and customer trends in the market. SoftNis treats data collection and management as major work areas.  Our growth chart is advancing in double figures as we have gained industry wide acceptance for the leading data collection service providers. This has only been possible due to quality work performance, value for price experience and professional management. We have evolved as an organization that caters to customer requirements in accordance with the supplier classification and ensure the adherence to all the detailed rules and regulations laid down by the industry experts. We believe in serving the valuable client base with an excellent tailor made service experience. We would be obliged to serve you with the best of our services.
Supplier Classification Example using UNSPSC

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