As Jim commented my organization uses a risk based approach.
the first cut is based on their ability to shut us down or harm our customer in some way. (COST is not a risk item). This includes material used in the product; material used to manufacture, ship or service the product; any service necessary to manufacture, ship or service the product (this includes electricity, data and phone)
Next we look at the stability of the supplier and the difficulty of getting a second supplier should the primary go down (thru financial, environmental or political reasons). So a sole source supplier in outside the US in on a fault line, hurricane/flood zone or politically unstable region is a critical supplier. A supplier of a commodity part such as paper towels in a moderate climate, non earthquake zone is a non critical supplier.
We are moving to NOT physically auditing even our critical suppliers after the initial selection process. We don't physically audit our non critical suppliers at all. We do monitor performance and finacial stability. We also take mitigation action for really critical high risk suppliers...we have found this to be a musch more effective approach to supplier management...