Supplier
Definition:
A supplier, also known as a vendor, is a company or individual that provides goods or services to another organization. Suppliers can range from manufacturers and distributors to service providers and contractors. They play a critical role in the supply chain by providing the inputs and expertise needed to support an organization's operations and goals.
Example:
Acme Corporation relies on a diverse network of suppliers to support its business. For example, it works with raw material suppliers to obtain the metals, plastics, and chemicals needed for its manufacturing processes. It engages with logistics providers to transport finished goods to its customers. It also works with service suppliers, such as IT consultants, marketing agencies, and facilities management companies, to support its various business functions. Each supplier is selected based on their ability to meet Acme Corporation's specific needs in terms of quality, cost, delivery, and innovation.
Why are Suppliers important to Procurement?
Effective supplier management is a key priority for procurement teams, as suppliers have a direct impact on an organization's ability to operate efficiently, meet customer needs, and achieve its strategic objectives. Procurement teams are responsible for identifying, selecting, and managing suppliers to ensure a reliable, high-quality, and cost-effective supply of goods and services. This involves building strong, collaborative relationships with suppliers, while also ensuring that they meet the organization's standards for performance, compliance, and risk management. By working closely with suppliers to drive continuous improvement, innovation, and value creation, procurement teams can help their organizations achieve a competitive advantage in the marketplace.