supplier

1. General: External entity that supplies relatively common, off the shelf, or standard goods or services, as opposed to a contractor or subcontractor who commonly adds specialized input to deliverables. Also called vendor.

2. Quality control: Internal or external entity that provides inputs to jobs or tasks of an organization's internal customers. Efficient interactive relationship between a supplier and a customer is a critical component of quality management.

Convincing customers to buy your products is tough enough without suppliers giving you a hard time. Basic rule of thumb: The fewer the number of suppliers, the more sway they have. Take the steel industry, which relies on a handful of companies for its iron feedstock. If two of those big guys should get together--as BHP Billton and Rio Tinto have been discussing--they would have significant pricing power, potentially crimping steel producers' margins. On the flipside, beware getting hooked on low-cost providers who don't keep an eye on quality. ("Lead-laced" Barbie, anyone?)

• How much power do your buyers have?
• Locking In Customers
• Suppliers and Customers as a Competitor