LOGI200 Purchasing Week 13 Chapter 19
<ul><li>The trend is to:  </li></ul><ul><li>Buy instead of make  </li></ul><ul><li>Outsource  </li></ul><ul><li>Improve qu...
Supply Chain Management Effectiveness <ul><li>driven primarily by the organization’s ability to manage the  internal   and...
Customer Satisfaction Depends on Supplier Performance Quality Cost Delivery Quantity Other Suppliers
Purchaser-Supplier Satisfaction Matrix  Complete satisfaction Complete satisfaction Marginal satisfaction Total dissatisfa...
Supplier Ranking Relationship Investment Required - Reward Obtained + Exceptional supplier (alliance or partner) Preferred...
View of Buyer-Supplier Relationship <ul><li>lowest price  </li></ul><ul><li>specification-driven  </li></ul><ul><li>short-...
Developmental Path to Partnership assessment improvement rationalization alignment partnership
Early Supplier Involvement (ESI)/Early Purchasing Involvement (EPI) <ul><li>pulls both the buyer and supplier into the nee...
Partner Selection <ul><li>cost </li></ul><ul><li>safety </li></ul><ul><li>quality </li></ul><ul><li>delivery </li></ul><ul...
Some Indicators of a Successful Partnering Effort  <ul><li>Formal communication processes  </li></ul><ul><li>Commitment to...
Strategic Alliances <ul><li>both buyer and seller believe that it is in the best interest of both to formalize the relatio...
Concerns about Partnerships <ul><li>one partner might take advantage of the preferred status </li></ul><ul><li>in a single...
Reverse Marketing/Supplier Development <ul><li>prospective supplier must be persuaded to accept an order </li></ul><ul><li...
Supply Chain Management <ul><li>goal is to reduce UNCERTAINTY and RISK in the supply chain </li></ul><ul><li>philosophy th...
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Supplier Relations

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Class lecture notes on Supplier Relations

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  • could you please send to my email jadevo_2205@yahoo.com.vn
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  • Hi Bhupesh, looks great with your presentation, I would like to have a copy for inspiration next time I have a meeting. could you mail for nf@dnp.dk. Thanks a lot.
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  • excellent,
    Could you kindly send me a copy to tetrarac@gmail.com
    thanks
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  • Very well presented and easy to understand.
    Could you send a copy to: rodney.mccoll@acc.co.nz
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  • great!! could you kindly send a copy to me nurzamand92@yahoo.com? Many thanks
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  • Supplier Relations

    1. 1. LOGI200 Purchasing Week 13 Chapter 19
    2. 2. <ul><li>The trend is to: </li></ul><ul><li>Buy instead of make </li></ul><ul><li>Outsource </li></ul><ul><li>Improve quality </li></ul><ul><li>Lower inventories </li></ul><ul><li>Integrate supplier purchaser systems </li></ul><ul><li>Create cooperative relationships such as partnerships </li></ul><ul><li>Underline the importance for outstanding supplier performance </li></ul>Supplier Relations
    3. 3. Supply Chain Management Effectiveness <ul><li>driven primarily by the organization’s ability to manage the internal and external links of customers, the buying organization and suppliers </li></ul>
    4. 4. Customer Satisfaction Depends on Supplier Performance Quality Cost Delivery Quantity Other Suppliers
    5. 5. Purchaser-Supplier Satisfaction Matrix Complete satisfaction Complete satisfaction Marginal satisfaction Total dissatisfaction Marginal satisfaction Supplier Purchaser Desired Zone
    6. 6. Supplier Ranking Relationship Investment Required - Reward Obtained + Exceptional supplier (alliance or partner) Preferred supplier Good supplier Acceptable supplier Product focus short term Product and service focus Process or system focus Continuous improvement focus Mutual breakthrough Mutual improvements New volume Premium price Loyalty Sale only Unacceptable supplier Extra costs because of poor quality, delivery, price, quantity 0 0
    7. 7. View of Buyer-Supplier Relationship <ul><li>lowest price </li></ul><ul><li>specification-driven </li></ul><ul><li>short-term, reacts to market </li></ul><ul><li>trouble avoidance </li></ul><ul><li>purchasing’s responsibility </li></ul><ul><li>tactical </li></ul><ul><li>little sharing of information </li></ul><ul><li>total cost of ownership </li></ul><ul><li>end-customer driven </li></ul><ul><li>long-term </li></ul><ul><li>opportunity maximization </li></ul><ul><li>cross-functional teams and top management involvement </li></ul><ul><li>strategic </li></ul><ul><li>both supplier and buyer on both sides share short- and long-term plans </li></ul><ul><li>shared risk and opportunity </li></ul><ul><li>standardization </li></ul><ul><li>joint ventures </li></ul><ul><li>share data </li></ul>TRADITIONAL PARTNERSHIP
    8. 8. Developmental Path to Partnership assessment improvement rationalization alignment partnership
    9. 9. Early Supplier Involvement (ESI)/Early Purchasing Involvement (EPI) <ul><li>pulls both the buyer and supplier into the need recognition and description stages of the acquisition process </li></ul><ul><li>leads to improvements in processes, design, re-design or value analysis activities </li></ul><ul><li>each partner might enhance its own competitive position through the knowledge and resources shared by the other </li></ul>
    10. 10. Partner Selection <ul><li>cost </li></ul><ul><li>safety </li></ul><ul><li>quality </li></ul><ul><li>delivery </li></ul><ul><li>environment </li></ul><ul><li>financial stability </li></ul><ul><li>management stability </li></ul><ul><li>continuing improvement </li></ul><ul><li>technological accomplishment </li></ul><ul><li>congruence of management values on issues like customer satisfaction </li></ul><ul><li>concern for quality </li></ul><ul><li>employee involvement </li></ul><ul><li>supplier relationships </li></ul><ul><li>personal compatibility between functional counterparts </li></ul>
    11. 11. Some Indicators of a Successful Partnering Effort <ul><li>Formal communication processes </li></ul><ul><li>Commitment to our suppliers’ success </li></ul><ul><li>Mutual profitability </li></ul><ul><li>Stable relationships, not dependent on a few personalities </li></ul><ul><li>Consistent and specific feedback on supplier performance </li></ul><ul><li>Realistic expectations </li></ul><ul><li>Employee accountability for ethical business conduct </li></ul><ul><li>Meaningful information sharing </li></ul><ul><li>Guidance to supplier in defining improvement efforts </li></ul><ul><li>Non-adversarial negotiations and decisions based on total cost of ownership </li></ul>
    12. 12. Strategic Alliances <ul><li>both buyer and seller believe that it is in the best interest of both to formalize the relationship beyond the standard buying-selling mode </li></ul>
    13. 13. Concerns about Partnerships <ul><li>one partner might take advantage of the preferred status </li></ul><ul><li>in a single-source relationship, suppliers know that customers depend on them and they may abuse that relationship </li></ul><ul><li>supplier relationship management is important: understand and identify value (ultimate long-term, life-cycle cost and benefit to the user) </li></ul>
    14. 14. Reverse Marketing/Supplier Development <ul><li>prospective supplier must be persuaded to accept an order </li></ul><ul><li>purchaser is aware of benefits to both parties that the supplier may not be aware of </li></ul><ul><li>purchaser pre-determines prices, terms and conditions </li></ul><ul><li>purchaser must understand supplier’s capability to ensure win-win proposal </li></ul><ul><li>assures future sources of supply </li></ul>
    15. 15. Supply Chain Management <ul><li>goal is to reduce UNCERTAINTY and RISK in the supply chain </li></ul><ul><li>philosophy that stresses process and integration </li></ul><ul><li>smaller supply based is desirable – difficult to coordinate across channels </li></ul>

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