Relationship Between Buyers And Suppliers Essay

A supplier can get the raw materials for manufacture of the goods as also the finished product/imports

Suppliers want steady orders and prompt payment, they also want to feel valued by the company that they supply.

In this way, when suppliers see that the purchasing department of an organization understand their business and value, and work well together with their Sales & Marketing department, they will be more inclined to work with the organization. This means that all parties can gain both in terms of increased value and respect towards each other.

Bargaining Power of Suppliers: A producing industry requires raw materials - labour, components, and other supplies. This requirement leads to buyer-supplier relationships between the industry and the firms that provide it the raw materials used to create products. Suppliers, if powerful, can exert an influence on the producing industry, such as selling raw materials at a high price to capture some of the industry's profits. Tesco maintains direct professional business relationships with all their suppliers of organic food and non-food product worldwide. They also conduct supplier viewpoint surveys to find out what their suppliers think of Tesco.

Blanchard  (2009), “successful supplier relationships require two-way information, recommendations, metrics and incentives. Riordan Manufacturing must understand the cost and value of their entire supply chain. Without a detailed understanding of all costs, from raw materials through the end product or service, and the value provided by its supplier in the process, a supplier cannot be evaluated. Therefore, there are several things Riordan Manufacturing can do to improve their relationship with it suppliers. They can incorporate appropriate service levels and metrics into agreement, share critical information as early as possible, plan for major contingencies, expect and reward honesty and finally, make relationship meetings meaningful” (10 Strategies for Managing Suppliers).

Having worked in supply management for the past seven years, Nolan was well aware of the general principle of involving suppliers in product development and manufacturing decisions and the frequently touted benefits of lower costs structures, faster product

The manufacturers, distributors, and suppliers are all streams that contribute to the presence and quality of products. In the business world they function in a business to business market because their products are not directly available to consumers. Understanding the role that each of the links play is integral to viewing the supply chain as a system.

A buyer should be ultimately striving to maintain a dominant power leverage position over their supply base. It is never wise to allow a supplier to have more power or the dominance position. It is possible to maintain a buyer dominant power position and simultaneously build a collaborative alliance with a supplier. This is shown in the end of the case when VW builds the factory in Brazil. VW is still in the dominant power position and they are working side-by-side with suppliers in the factory building alliances and stronger relationships. By working together, on the same factory floor, VW is able to learn a great deal about how the suppliers do their work and give VW a chance to meet and know the actual employees of the supplier.

Suppliers want to be treated fairly and honestly because they think that is what is right. They also enjoy Long-term relationships because it will bring them more and better business and opportunities for growth and shared customer insight.

Suppliers want steady orders and prompt payments. They also like to be valued by the company they supply for instead of their ‘last resort’.

The Company’s supplier base includes domestic and foreign suppliers, and the Company has a small number of licensed stores in foreign countries. Accordingly, political or financial instability in these foreign countries, changes in U.S. and foreign relationships, laws and regulations affecting the importation and taxation of goods, including duties, tariffs and quotas, or changes in the enforcement of those laws and regulations could adversely impact the Company’s financial condition and results of operations.

(Frohlich and Westbrook, 2001) demonstrates the effects of supplier–customer integration on the performance of the organization. OBB purchase processing can become efficient with multi-pronged interactions.

The article discussed is written by Lisa Arnseth: “Sharing Value with Suppliers,” Inside Supply Management Vol. 23, No. 4. The article begins by talking about the economic downtown was hard on everyone and when things started looking up in 2009, that some suppliers could still not recover. Suppliers were forced to make cutbacks which made it very difficult for them to stay in business. Some of the larger manufacturers decided to help their suppliers by sharing their financial expertise, capital, and their lean manufacturing knowledge to help pull them out of the rut. In today’s world, a shared value approach is beginning to take course. The article begins discussing Toyota, Hyundai Motor Company and Samsung. These companies are looked at

According to our class text Supply Chain Management’s goal is to create fast, efficient, and low-cost network of business relationships to get a company’s product from concept to market. In order to understand the goal we must know that the supply chain is the process the raw materials of a product go through in order to be available to the consumer. The relationships that the business creates are needed in order to create the product, each process the product goes through creates value, the supply chain is often called the value chain. Internet technologies are increasingly making the supply chain management process much more efficient and worth the initial investment. The supply chain management life

Suppliers are integral elements of Toyota. They are geographically located within 56 miles radius. A security of guaranteed order is given which enables them to produce the best quality raw materials at cheapest cost achieving economies of scale. Toyota does not believe in choosing supplier as a lowest bidder. But it believes in gradual mutual improvement. It believes in "vendor creation and development". As an initiative in this direction it trains its suppliers as per required.