Book contents
2 - Supplier Normalisation
Published online by Cambridge University Press: 09 November 2021
Summary
What is supplier normalisation?
Let's start with why I’m referring to ‘supplier normalisation’ and not ‘vendor normalisation’. I work with companies all over the world and I see the use of ‘supplier’ a lot in the UK and Europe, but ‘vendor’ occurs more frequently in the US. In my day to day, I alternate between supplier and vendor and use them interchangeably.
I created a poll on LinkedIn and asked my network what their preferred terminology is. I had no idea that it would cause such a debate! 1,184 people voted, over 200 commented and the final result was: 65% voted ‘supplier’ and 35% voted ‘vendor’. I had some great comments for justification of each, including:
‘I say vendor, but I believe supplier is correct, but “partner” is where we should strive to be.’
‘Worth thinking about “third-party” too which is increasingly the terminology in Financial Services.’
‘I use vendor because that's what I started with academically and how it's been referred to in my last three jobs.’
‘Both supply goods and/or services. Vendors: B2C and B2B relationships. Suppliers: only B2B relationships.’
‘I just had this conversation with a colleague … from my perspective it's most definitely “supplier”. I haven't used the term “vendor” since the 90s.’
‘Vendors are the people who sell hot dogs at a baseball game.’
‘Supplier for sure. Vendor sounds non-important.’
‘I had a supplier say to me one time, “We are not a vending machine”. It stuck with me. I use the words interchangeably, sometimes it depends on the audience, but I think supplier sounds more professional.’
As you can see, it's not clear cut and both terms are widely accepted. For the purpose of this book, I will use supplier, which will also encompass anything vendor related.
Supplier normalisation can also be referred to as ‘standardisation’. Normalisation is giving your existing suppliers a common name or grouping so that you can see how much you are truly spending with them or selling to them. When you are doing this for the first time, I would always recommend adding a new column to your spreadsheet. I would not recommend overwriting your existing suppliers as you may need this information in the future, and it will definitely help for classification, which I’ll cover in Chapter 4.
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- Between the SpreadsheetsClassifying and Fixing Dirty Data, pp. 37 - 60Publisher: FacetPrint publication year: 2021