Supplier Relationship Management Essay

714 Words Nov 22nd, 2012 3 Pages
Supplier relationship management is an approach to managing organizations interactions with the supplier of the goods and services it uses. The main goal of supplier relation management is to streamline and make more effective the processes between an organization and its suppliers. In order for this type of relationship to work and benefit both parties, the organization and its suppliers must have the same desired outcomes. Both parties must be willing to compromise, share information such as pricing, new product developments, and as well, be able to communicate openly and honestly with one another and the cross-functional teams. Whirlpool Corporation and Inland Steel Industries demonstrate these qualities, thus the reason for their great …show more content…
Some of the key advantages of point to point contact between functional groups are that 2 heads are better than one. The more people you have, the more ideas you have to choose from to make the best decisions. There is more knowledge and expertise within each functional group and if one group from one company has questions the partner company’s functional group will have answers or ideas because they have the experience and knowledge to help answer the questions. There is a better understanding of how each group works and therefore will be able to communicate more efficiently. For example, engineering at Whirlpool built a link with the engineering group at Inland. This helped to ensure that Inland was engaged in Whirlpools new product developments and helped to create a cost effective product for both manufacture and consumer.
The path to trust between Whirlpool Corporation and Inland Steel began many years ago when Inland Steel became a supplier of steel to Whirlpool. As that the companies had worked together for several years, it was easy to see that both companies had a common strategic vision and both companies realized that their end goals could be met if they worked together. In the early years of the partnership Inland began to share its market strategies with Whirlpool. Inland also began to change its investment style so that they could better support the needs of Whirlpool. One of the key