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Lecture 5

33:799:301 Lecture 5: 0003-IntrotoSupplyChain-2017-02-07

Supply Chain Management
Course Code
James King

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Supplier Relationship Management:
Involves developing partnerships with key suppliers
- Reducing total costs
- Innovating new products and services
- Creating value for both companies
Focus on a small set of critical suppliers
- Largest impact on profitability
- Provide most value
- Critical to firm’s success
Manage remaining suppliers based on segmentation
- Segmented based on company’s supply goals
- Manage all suppliers in the segment
Strong Supplier Partnerships
Important to achieving win-win competitive performance for the buyer and supplier
- These require a strategic perspective as opposed to a tactical position
Involves a mutual commitment for mutual benefit
Keys to Successful Strategic Partnerships
1. Building
- With trust, partners are more willing to work together, find compromise solutions to
problems, work toward achieving long-term benefits for both parties, and go the extra
2. Shared Vision and Objectives
- Both partners must share the same vision and have objectives that are not only clear but
mutually agreeable
- The focus must move beyond tactical issues and toward a more strategic path to
corporate success
3. Personal Relationships
- Strategic partnerships begin with the development of personal relationships between key
people at each company
- One to one relationships at all levels of the organization
- It is people who communicate and make things happen
4. Mutual Benefits and Needs
- Strategic partnerships can satisfy needs of both parties
5. Commitment and Top Management Support
- Commitment must start at the highest management level
- Partnerships tend to be successful when top executives are actively supporting the
6. Change Management
- Companies must be prepared to manage change that comes with the formation of new
- Companies must be able to move forward and change together to be successful
7. Information Sharing and Lines of Communication
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