Procurement performance is a key concern for large corporations. Procurement departments are constantly seeking to reduce costs, improve service quality, and accelerate time-to-fill, especially when it comes to professional services.
In this context, dynamic supplier listing, also known as a Dynamic Purchasing System (DPS), is emerging as a modern complement to traditional framework agreements.
In its standard definition, it allows suppliers to join or leave the panel of approved providers at any time, as long as they meet objective criteria.
In practice, large organizations often use it as a flexible ranking system, where providers stay on the panel but move up or down in rank depending on their performance.
Thanks to this agility, dynamic supplier listing is being adopted by public and private organizations alike, becoming a real accelerator for procurement performance: optimized sourcing, cost control, improved supplier quality. All concrete benefits we’ll explore in this article.
What is dynamic supplier listing?
Dynamic supplier listing is a digitized procurement process that enables flexible and scalable supplier panel management.
Unlike a traditional framework agreement, where the supplier list is fixed for the contract’s duration, dynamic listing introduces continuous evolution.
In the standard model, suppliers can join the panel at any time or be removed if they no longer meet the criteria.
Operationally, many procurement departments prefer to organize the panel into different tiers. The top-performing suppliers (competitive pricing, strong responsiveness, high satisfaction) are in the upper ranks, while the less efficient ones are ranked lower.
Concrete example: In a purchasing category such as professional services, a department might structure its panel by market (e.g. IT), lots (e.g. Back-end Development), and profile codes (e.g. Senior Java Developer). For each profile code, suppliers are compared based on their rate cards and KPIs, and ranked from best to lowest.
This hierarchy directly impacts how RFPs are distributed. In many cases, buyers send requests in sequence: the first tier gets the RFP first. If no provider responds or if the proposals are unsatisfactory, it is then sent to the second tier, then the third, and so on.
The panel continuously reflects market shifts, available skills, and client needs. It is this ongoing movement, entries, exits, or rank changes, that makes the listing “dynamic.”
How does dynamic supplier listing work?
Dynamic listing relies on a digital process to select, evaluate, and update suppliers. Here's how it works in practice:
1. System setup
The buyer defines the scope of services based on purchasing categories, markets, and lots.
Selection criteria are set in line with the procurement strategy (economic, quality, financial stability).
A platform (such as a VMS or e-procurement tool) centralizes the data.
2. Continuous supplier listing
If suppliers meet the set conditions, they enter or move up in the panel.
The panel is therefore living and evolving, unlike a fixed framework agreement.
3. Performance monitoring
Suppliers must meet KPIs to remain listed. Common criteria include:
Economic: average daily rate (TJM), adherence to rate cards.
Quality: response rate, conversion rate, internal client satisfaction.
Financial stability: business health, absence of major risks (monitored via financial tools or tailored grids).
4. Regular panel reviews
In the standard model, while the model allows for continuous updates, in reality buyers often conduct annual or semi-annual reviews due to process complexity.
Operationally, reviews result in rank adjustments. Some providers drop from first to second tier, others move up based on recent performance. This logic maintains competition and encourages suppliers to stay high-performing.
What are the benefits of dynamic supplier listing?
Dynamic supplier listing isn’t just a technical evolution. It’s a true performance lever for both clients and suppliers.
For procurement departments, the first benefit is optimized sourcing. The evolving panel makes it easier to access better-suited providers and reduces reliance on a few historical players.
Cost control is strengthened by ongoing competition, encouraging providers to stay competitive. Challengers invigorate the market and give buyers more negotiation power.
Service quality also improves. Thanks to KPIs (response rate, conversion, satisfaction), buyers easily identify top providers and can downgrade the underperforming ones.
Finally, dynamic listing shortens time-to-fill. An up-to-date panel enables faster responses to needs, since RFPs go to the most relevant suppliers by category, market, and lot.
On the supplier side, this model offers more transparency. Selection and evaluation criteria are known and monitored objectively. Providers know what levers to act on to improve.
What are the prerequisites for successful dynamic listing?
Certain conditions are required to successfully implement dynamic listing.
The first is procurement maturity. Dynamic listing involves active supplier panel management: defining objective criteria, monitoring performance, and regularly updating the panel. This demands an organized team ready to invest time in implementation.
The second is clarity in qualification criteria. An optimal panel relies on measurable indicators shared across all stakeholders: economic criteria (TJM, rate card compliance), quality indicators (response rate, internal satisfaction), and financial stability.
Success also depends on having the right tools. A centralized dashboard like those in Vendor Management Systems is key to track KPIs and update the panel. Without tech support, the process becomes too manual and unsustainable.
Lastly, the update rhythm should match the maturity of each organization and its volume of purchasing categories, markets, and lots.
One final consideration: dynamic listing puts pressure on pricing. While this benefits clients in the short term, it can hurt supplier margins and impact service quality. In a market where trust matters, it’s crucial to strike a balance between competitiveness and long-term partnership.
Dynamic listing with Eleven VMS: how it works
At Eleven VMS, dynamic supplier listing is central to managing professional services procurement. The platform provides a dedicated dashboard to track key KPIs in real time: response rate, conversion rate, adherence to rate cards, and TJM trends.
Customer Success Managers (CSMs) support the panel analysis and updates. They interpret the data, suggest adjustments, and guide clients through Quarterly Business Reviews (QBRs), even for organizations with less mature procurement functions.
Dynamic supplier listing: a long-term performance lever
Dynamic supplier listing offers a flexible, high-performing alternative to rigid framework agreements. It helps procurement teams keep an up-to-date panel, speed up sourcing, and improve service quality.
For suppliers, it provides ongoing market access with clear rules and transparent criteria.
With Eleven VMS, this approach becomes easy to manage. Request a free and personalized demo of our platform.
