70
Segmentation and spend As segmentation has developed, so too has the realisation that the outcome has to be something that will enable effort and resource to be directed where it will make the most difference to the business. This requires the number of suppliers segmented as stra- tegic or critical to be carefully considered relative to the treatment strategies to be adopted. The number of suppliers classified as strategic or critical has stabilised over the last two years, at a number of up to 25 for over 60% of respondents .
Figure 3.4. Number of suppliers classified as strategic – buy side
30%
10 OR LESS
1
32%
11 25
15%
26 50
7%
51 75
5%
76 100
7%
MORE THAN 100
3%
DON'T KNOW
While spend is by no means the only criteria to determine if a supplier is strategic or critical, it can be considered a reasonable indicator. We therefore asked organisations what proportion of their third party spend is accounted for by the group of suppliers they had segmented as strategic. We find that 59% of respondents have more than half of their third party spend accounted for by their strategic suppliers, with 18% of those reporting it to be more than 80% .
Figure 3.5. Proportion of spend with segmented strategic suppliers – buy side
1
41%
18%
18%
15%
8%
MORE THAN 80%
51 80%
25 50%
DON'T KNOW LESS THAN 25%
Powered by FlippingBook