supplier

A supplier is an entity that provides goods or services to another organization. Suppliers can supply raw materials, components, finished products, or services used in operations. They may act as direct suppliers to manufacturers, or indirect suppliers for maintenance, office supplies, or professional services. Suppliers can operate locally or globally and include manufacturers, distributors, wholesalers, and service providers.

The procurement process typically includes identifying potential suppliers, evaluating capabilities and risks, onboarding, and negotiating contracts. Ongoing supplier management tracks performance against agreed standards and key performance indicators such as on-time delivery, quality, and cost competitiveness. Regular supplier audits, financial risk assessments, and compliance checks help ensure quality and continuity. Many organizations use supplier portals, e-procurement systems, or ERP integrations to manage sourcing, orders, and invoicing.

Suppliers differ by relationship and role. Direct suppliers provide inputs used in production; indirect suppliers support non-production needs. Strategic or preferred suppliers are engaged for long-term value and collaborative improvement, while transactional suppliers are engaged for routine, short-term purchases. Global sourcing can lower costs but adds currency, political, and logistics risks; local or regional sourcing can improve responsiveness. Programs to promote supplier diversity aim to include historically underrepresented businesses.

Benefits of strong supplier relationships include reliable supply, higher quality, and opportunities for innovation and cost savings through collaboration. Risks include supply disruptions, price volatility, quality failures, counterfeit or non-compliant products, and regulatory or reputational risk. Responsible procurement emphasizes ethics, labor standards, environmental sustainability, and transparency in supplier operations.