Supply base management is an important aspect of supply chain management since today the process of purchasing or procurement of raw materials or components is a strategic function.

1. Significance of Supply Base Management
Supply base management is an important aspect of supply chain management since today the process of purchasing or
procurement of raw materials or components is a strategic function. This is because external suppliers now play an
important role in the success and failure of an enterprise. In addition, with the business environment being highly
complex and competitive, enterprises have to make sure that it has an effective supply base management in place.
Before delving more on this topic let’s first understand the term supply base management. Supply base management is
the “systematic dynamic approach for strategically managing the whole supply base.” (Supply base is “an activity that
incorporates current, potential, and even past suppliers.”)
In order to sustain in the competitive world, there should be an optimal flow of high quality, value-for-money materials
and components. This makes supply base management highly important. Supply base management involves various
activities such as material planning and procurement, domestic and offshore sourcing, turnkey and consigned materials,
supplier qualification and certification, vendor managed inventory, full materials lifecycle management, Kan Ban and
other models, and so on. The following are some best practices in supply base management.
 Enhance Supplier Selection and Relationship Management
Enhancing supplier selection and relationship management helps in better products, reduced costs, higher
satisfaction, stronger supplier partnerships, and more efficient business processes.
 Streamline the Number of Suppliers
Narrow supplier base if enterprises have a set of qualified suppliers who provide cost, quality or any other like
no one else. Moreover, Supply base rationalization helps in establishing closer long-term relationships. This also
results in lower total costs and inventories, improved working capital and better products.
 Conduct Detailed Audits and Operational Reviews to Evaluate Suppliers
Audit the strategic capabilities and prospective synergies of potential suppliers. The key factors to be assessed
are quality, quality record, delivery and cycle times, financial stability, technological capabilities, and so on.
For any enterprise involved with the manufacture of goods, the foundation the process of supply chain solution must be
strong in order to maximize its performance and make it better than that of its competitors. And the foundation of the
manufacturing companies is nothing but the suppliers and the raw materials that they supply. Hence, enterprises must
start giving priority to their supply base management.
Know more about - Supply Chain Integration & order fulfillment