Supplier Base Definition
As the world of business becomes more globalized, the definition of a supplier base becomes more complex. A supplier base is defined as the set of all suppliers that provide goods or services to a company. This can include direct suppliers, indirect suppliers, and even potential future suppliers. The size and composition of a company’s supplier base can have a significant impact on its business operations and bottom line.
A company’s supplier base can be divided into three categories: direct suppliers, indirect suppliers, and potential future suppliers.
Direct suppliers are those that provide goods or services directly to the company. These are typically the most important suppliers, as they have the greatest impact on the company’s operations. Indirect suppliers are those that provide goods or services to direct suppliers. These suppliers may not have as much direct contact with the company, but their products or services are essential to the operation of the company’s direct suppliers. Potential future suppliers are those that could become direct or indirect suppliers in the future. These companies may not currently do business with the company, but they have the potential to become important partners in the future.
The size and composition of a company’s supplier base can have a significant impact on its business operations and bottom line. A large, diversified supplier base provides greater security and flexibility for a company, while a small, focused supplier base can lead to lower costs and improved quality control. The right mix of supplier types will vary from company to company, depending on factors such as