A Supplier Segmentation Matrix is a strategic tool used to divide suppliers into distinct categories or segments. It provides decision-makers with an organized structure for evaluating the total cost of ownership (TCO) for each supplier and identifying the best value supplier. The matrix also enables organizations to prioritize different aspects of their supply chain management activities by segmenting suppliers according to type and purpose, along with any other relevant criteria. By optimizing TCO and developing customized strategies for each supplier segment, businesses can maximize their overall savings and optimize their operations.