Resolving Issues in Managing Supplier Relationships
In my interview with Elly Cipto, I learned a lot about what she does as a business owner of Computech International Technology, a small company that resells machinery parts. When discussing some of the challenges that she faces, she identified managing supplier relationships to be one of the biggest issues when working in international business. The issue with having to manage supplier relationships is the difficulty of finding suppliers that carry the correct parts, minimizing the cost of purchasing from the suppliers as a small business, and having to track costs with so many different suppliers. I chose to study this issue further because I think it is really interesting to try and understand the complexity of having to find different suppliers, maintain relationships with various people, and minimize costs. I also believe that as the main driver of the costs in Elly’s business, solving this issue could potentially have the most impact in increasing the profitability of her company.
Managing supplier relationships is a big issue for Elly’s international business since it directly affects the costs that her business incurs and is caused by many things. First of all, some suppliers are not willing to sell to smaller business owners. Many suppliers prefer to sell machinery parts in bulk to larger customers, so even having access to a consistent supply is difficult for Elly. Secondly, many of the parts that her clients
In relation to this research, the global procurement co-pack team plays an important role to drive cost savings and efficiency by finding the most suitable and profitable contract manufacturers that can meet the products’ requirements and capacity from the company. This includes creating and implementing the best strategy in relation with where the products are being sold, the
Westminster Company is a giant Global manufacturer of health products whose brand has been recognized by the world. As the company they have three different operations which produce and distribute different product lines. Their main strategy on which they are working and which is a major success for them is decentralized management. Now they are re-evaluating their traditional supply chain strategy because the company is getting too much pressure from their large domestic’s customers and global customers. Now the company has to study on
The Bargaining Power of Suppliers (Moderate): Most of the industry’s products are sourced and manufactured by a network of third parties. The supplier group is diluted compared to the industry; KMD alone has over 45 suppliers. There is credible threat of suppliers adopting forward integration resulting in loss of major suppliers and emergence of new competitors for the industry. Highly effective and specialised products will pose high supplier switching costs for industry firms.
Suppliers: The possible pressure on BMW by its suppliers means they are very powerful and play a key role in BMW’s business model; this is because it is the parts fabricators that ultimately assume and absorb some of the rising costs of the raw materials. Even though BMW is the dominant part of the relation, the supplier´s individual power is not reduced by this because of the high extent of specialisation of each producer, and to find new suppliers that meet BMW quality requirements. Taking as an example the parts supplier list for a single model comprises 70 companies including the likes
| A company 's suppliers, their supplier 's suppliers, and the processes for managing relationships with them constitute
Supply chain management is a practice that involves the planning, supervision, and implementation of strategies and controls to direct the movement of goods and services provided to customers. The intent of this essay is to incorporate a synopsis of existing literature and to provide the reader with a general understanding of how supply chain management correlates with the organizational design and structure of modern firms. The essay comprehensively reviews the components of supply chain management and their integration with functional areas within an organization. The information presented in this essay
People: The emergence of the triple bottom line has led to companies becoming more aware of how their decisions affect not only employees and customers but those within the community they operate in. To achieve this in an ever changing global world a company needs to create policies and guidelines on how to select suppliers and evaluate performance.
As an example, Tombow’s supply chain set up used for Object EO can be analyzed. To produce it, Tombow coordinates six vendors. Two of them - Kantoh and Nagano - are the main suppliers. Kantoh produces components and Nagano, besides production of components, is also responsible for the assembly work. In practice, Nagano outsources assembly work to residents near Nagano´s factory. There are currently challenges with supply
Global business environment has become more unstable, supplier negotiations have taken important new role on helping improve corporate competitiveness. The goal of most supplier negotiations today is no longer just to get the lowest price. It is also to find new and innovative ways to meet a wide variety of business challenges, often by tapping into the knowledge and expertise of the supplier community and a good relationship.
The bargaining power of suppliers is medium. Since corporates conditions vary, whether the power of suppliers is strong should be determined accordingly. But to survive in the online retailing industry, keeping a close relationship with the suppliers is imperative. Many of the multi-national companies in the industry is depending on limited numbers of suppliers that are concentrated in production, differentiated in products, and not heavily relied on a single industry, which give them great bargaining power and can better facilitate the corporations’ success. Small companies may not have established such strong alliance with its vendors.
Some of these problems in the supply chain often go unnoticed as the number of links between supply network members. Supplier Ethics Management is the “management of suppliers and supply relationships with strategies, programs, and metrics that better align supplier business conduct with purchaser standards, with the goal of reducing the purchaser’s overall risk of corporate integrity failure in the supply chain.“ (www.s-ox.com)
"Despite the odds, Toyota and Honda have managed to replicate in an alien Western culture the same kind of supplier webs they built in Japan. Consequently, they enjoy the best supplier relations in the U.S. automobile industry ." (page 3 of the Liker & Choi article). Briefly describe the authors' explanation for why Toyota and Honda succeeded where the "Big 3" failed in terms of effective supplier relationship management. Do you agree with Liker & Choi's assessment? Please explain why or why not. Are there any barriers to prevent Ford and GM from emulating Toyota and Honda's approach to supplier relationship management?
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
The different pressures on suppliers to reduce costs have caused tensions and distortions. It is for this reason, companies find it difficult to establish long-term relationships with suppliers. Nonetheless, most buyers still uses this direct approach to reduce costs, and many Chinese factories will do whatever is necessary to satisfy.
purchasing. Complex procurement could involve finding long term partners – or even 'co-destiny ' suppliers that might fundamentally commit one organization to another. Obviously, procurement becomes a more vital element of value creation in economic activities, when (worldwide) fragmentation of production increases. In a global market procurement decisions are directly linked to sourcing strategies, so that procurement, in abroad sense, becomes an integral part of the general management of an internationally operating company or organization. The next section (section 2) discusses