In too many companies today, procurement is a highly complex business activity that involves numerous employees in many divisions and departments of a company purchasing goods and services from a wide range of suppliers. Seldom are procurement tasks in one part of a company coordinated with tasks in another. For instance, many purchasers are left to their own devices in finding, evaluating, engaging and retaining suppliers. This reality usually stems from the fact that the company does not provide its purchasers with information about suppliers – drawn from across the enterprise, as well as from external sources – that can enlighten decisions about which suppliers to use for which business situations.

THE HURWITZ TAKE: For a company to make effective decisions about how to best use suppliers, it needs an information system that quantifies and manages its relationships with its suppliers. Supplier relationships are defined by several attributes that depend on internal information, external information and standards for classifying suppliers.

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