Managing your suppliers effectively is essential to any business. Procurement and your business overall need to understand whether your suppliers are delivering the services agreed in the contract. Knowing which suppliers you are most dependent on and mitigating any associated risks is also a key element of supplier management.

Your organisation may have to manage large numbers of suppliers meaning controlling spend, negotiating the best deals, and mitigating risk can be time-consuming and complicated. Maintaining a preferred supplier list will help make this process efficient and straightforward.

What is a preferred supplier list?

Essentially, a preferred supplier or vendor list is a register of pre-assessed, agreed suppliers that your business will use to purchase goods and services from. The assessment process will ensure your preferred suppliers will support your organisation’s goals and objectives for growth and success.

The benefits of having a preferred supplier list
Improved decision making

Effective procurement decision making is data-driven, and putting together a preferred supplier list is no exception. Your list should improve access to supplier information for your business and make purchasing easier for them. The easiest way to do this is to use a digital e-sourcing system which connects internal and external parties and provides up-to-date and relevant data for decision making.

Ensures best value and cost savings

A preferred supplier list will ensure your suppliers deliver the best value for your organisation in terms of price, quality, financial stability and contract performance. As you’ll be buying more from preferred suppliers, your purchasing power will be greater, and you will be able to negotiate better prices and save money.


Procuring goods and services can be time-consuming, especially when you need to undergo a tender process, collect bids from potential suppliers and negotiate contract terms. Buying goods and services is therefore much quicker and easier for business departments, as these steps have already been carried out centrally. Departments can instead focus on their primary purpose rather than administrative procurement tasks.

Reduces risk

There are several risks relating to suppliers that can be mitigated by using a preferred supplier list when managing your supply chain. Your list will identify your critical suppliers whose goods or services are essential to your organisation. You can then monitor their performance closely to ensure they are delivering on their contractual obligations. Your critical suppliers should provide higher service levels as their commitment to your business will be greater, and they will have a better understanding of it.

If you decide your reliance on certain suppliers is too great, you can look to diversify and spread the risk across several suppliers. If your due diligence unearths issues with suppliers’ financial stability, you can replace them with more stable organisations.

Better control

Having a preferred suppliers list increases the control you have over procurement. Building relationships with these suppliers increases accountability, and you’re more likely to receive an improved quality of service. Communication will also be optimised, reducing the chance of misunderstandings occurring.

Putting your list together

When putting a preferred supplier list together, start by assessing your current suppliers and identifying your most significant spend areas. Define your requirements and take into account both your overall business and individual departments’ needs so you can find the correct suppliers. You also need to be mindful of overlooking smaller organisations and your diversity obligations.

Managing your preferred suppliers using a digital e-sourcing system ensures you have access to accurate supplier data so you can make informed decisions to maximise ROI. Contact Atamis today to find out how our scalable solution can help you understand your supplier requirements and support and drive your procurement strategy.