This purpose of this thesis is to investigate existing frameworks for supplier segmentation and the Sales & Operations Planning (S&OP) Process. Given the shift toward outsourced production, supplier relationship management is critical to manage risk in a supply chain. While supplier capacity is traditionally considered during the supply review, most companies have not fully integrated suppliers into their S&OP process. Since all suppliers are not created equally, Caterpillar wanted to know how to determine which suppliers were worth extra attention within the S&OP supply review and what other companies were doing. In order to supply this information, a literature review and interviews were conducted. Through these methods, a recommendation for a framework to segment suppliers for Caterpillar was developed based on the lessons learned and best practices in other industries.
