Segment and prioritise among your value chain partners
Determine which suppliers to engage and the level of engagement by segmenting them intro groups. Segmentation helps you focus your resources on the most strategic suppliers or supply categories. And it allows you to adopt more standardised and resource-efficient approaches for lower-priority segments.1
Start by narrowing down your highest priority groups based on how strategically relevant they are to your organisation. A common way to do this is to begin where you have the highest procurement spend or procurement volume. You may also include suppliers that are most irreplaceable due to their unique capabilities (e.g. sole sourcing). You can further refine your supply segments by assessing the severity of unmitigated sustainability risks. Pay particular attention to suppliers and production sites located in high-risk geographies or industries. And make sure to consider the full range of relevant sustainability issues. Then try to categorise suppliers based on the severity of current and potential sustainability impacts. Finally, your segmentation should also consider the supplier’s potential to collaborate for positive sustainability impact.
