Suppliers

"Our suppliers are our partners." Disney

An organization may need many suppliers of items and services, some of which become part of the delivered product or service while others are needed to enable the organization to operate successfully. There are two main categories of suppliers:

Primary suppliers provide raw materials, products, services or information, which eventually find their way to the customer, client, consumer, or user.
Secondary suppliers help the organization be more effective or efficient. They may provide tools, equipment, consumables and finance to help produce the organization's goods or services; or information, training, and services to support the staff.

Who are critical? Organizations should differentiate between major suppliers who are critical to their operation and with whom they must maintain a good relationship (the supplier of tail fins to an aircraft manufacturer) and non-critical suppliers (of screws, copier machines, stationery, carpets, etc.). The trend is to rely more and more on suppliers, some of which are taking an increasingly important and sometimes vital part in the organization’s operation. Major car manufacturers such as Ford, are even subcontracting the final assembly of some of their models to external companies which then 'supply' Ford with the finished car.

Services: These include traditional services such as security, catering, and maintenance, but also newer services such as the supply of information. Services to customers are often supplied externally on behalf of the organization - a local government contracting out its garbage collection to a private company, which then has to be monitored and controlled.

A network of suppliers:  Large organizations have many suppliers. For a car factory of 10,000 workers there could be another 40,000 jobs which depend upon it. These include jobs at component suppliers, such as those supplying mechanical and electrical items; their suppliers, such as cable and light manufacturers; service providers such as IT, cleaning and security; and local stores and supermarkets, taxi firms and cafes, depending on the custom of the factory employees. >>>