SUPPLIER SEGMENTATION

WWA’s customer profiling and segmentation process captures those factors that can influence the level and results of collaboration. This provides the basis for applying our unique approach to determining the probability of entering into a collaborative relationship between trading partners. The probability process, combined with other segmentation metrics, guides customer categorization and the selection of collaboration candidates.

Our Profiling and Segmentation Philosophy

  • No two suppliers are the same
  • Supplier segmentation is required to provide the appropriate level of resources that will maximize your return on investment in retail customer-specific support
  • There is no segmentation structure that works for all companies. The best segmentation scheme is proprietary and non-replicable because a single retail customer should be viewed differently by its various suppliers
  • Segmentation structures become more valuable as you add critical components that “define” the structure relative to strategic intent of the organization . . . However, they cannot be over-structured as to become non-operational

Creating a Meaningful Supplier Segmentation

We segmented suppliers based on a number of quantitative and qualitative measures that drive resource investment. Each measure is distinct and mutually exclusive of the others

Quantitative measures based on performance

  • Growth (in dollars)
  • Contribution (gross profit plus marketing funds)
  • Sales (in dollars)
  • Performance (service level)
  • Investment (in marketing support dollars)

Qualitative measures based on alignment with supplier

  • Importance to the category
  • Ability to influence category performance
  • Ability to provide resources to support analysis and planning
  • Ability to provide category expertise
  • Ability to provide sales building and cost reduction opportunities
  • Willingness and commitment to establish partnering relationship

What We Do

  • Segment suppliers into one of three segments based on a number of qualitative and quantitative measures
  • Develop a weighted performance index for the Supplier Size and Performance segment; conduct assessment
  • Develop a weighted performance index for the Supplier Readiness and Receptivity segment; conduct assessment
  • Develop a weighted performance index for Importance of Supplier to Category; conduct assessment
  • Categorize suppliers into four groups designed to guide the allocation of resources to achieve the organizations strategic intent.
  • Prepare the resource allocation guidelines for each of the four groups.