|Type of paper:||Research paper|
|Categories:||Supply chain management|
Reducing the supplier base within a given business is a good way through which business leaders are able to create space and time to establish a close relationship with other potential suppliers. Through this interaction, it becomes possible for them to identify other qualified suppliers who they might have missed during the first selection. The first selection of suppliers is bound to encounter a number of errors considering the fact that the identification was done in a hurried manner probably due to the limited time that was available for the selection process (Ho, Dey and Lockstrom, 2011). This is a good way through which business owners are able to improve their overall competitive advantage while at the same time reducing the overall supply chain costs that are involved. Quality of the services offered is also improved in the process and businesses are able to engage the suppliers fully in an effort to identify opportunities that might be deeply hidden and utilizing them for the purpose of profit maximization. The end-consumers enjoying the improved quality of products in all cases where there exists a good relationship between the management of an organization and the suppliers that are used (Goebel, Reuter, Pibernik and Sichtmann, 2012). The improved quality does not come with an added cost and this helps a business to maintain and increase its customers who come in to buy products at affordable prices without the quality of both the products and services being compromised in any way.
It is important to appreciate the fact that the current technological advances have helped to facilitate closer relationship among buyers and suppliers and the resulting cooperation is very important every business despite the type of products or services that it deals with.
Change in Emphasis
The process that is involved in supplier base reduction is a planned one and this not done in isolation. This is one of the many concepts that are involved when re-engineering a given supply chain for the purpose of reducing the inventory that is used at any one time. A lot of attention is made to make sure that the changes that are involved succeed to give the very best to the customers in terms of quality and prices of the services and products that are involved (Partovi, 2013). The process involves setting annual targets that are necessary to supplement the effective planning and production processes that are used within a given organization. Despite the fact that planning and production might be done in the right manner, failing to optimize the chain supplier techniques that are used might produce some challenges in the future that might lead to some losses (Azadi and Saen, 2011).
Benefits of Reducing Supplier Base
Reducing the supplier base is a good way business and organizations are able to manage their resources while at the same time managing their suppliers in an effective manner. There are able to involve negotiations that help them to improve on both deliveries of products and services while making suitable improvements on the costs that are involved (Kannan, Jabbour and Jabbour, 2014). This is a chance for the management of the organization to engage suppliers to discuss on their past performance which helps them to make changes that allow them to avoid mistakes they might have done in the past. This is a chance for businesses to engage suppliers to help identify certain products that require incorporation of new technologies to improve both on their marketability and quality (Yue, Xia, and Tran, 2010). Thus, this is part of marketing strategies that some businesses are using in the recent time to remain competitive despite the adverse competition that is available in a given marketplace. Success in engaging suppliers is one of the reasons that markets one business to make more profits than others despite the fact that they might be dealing with the same products.
Depending on the type of business that is being carried, the management may opt to reduce the supplier base to have enough time to select intended suppliers. A given business or organization might intend to recruit suppliers who are ISO certified and thus it requires time to look and analyze the various suppliers who might be willing to do business with them. This is a chance for a business to reduce the cost involved in traveling to meet so many suppliers, most of which might not have the required qualifications (Ehrgott, Reimann, Kaufmann and Carter, 2011).
Sourcing Policy for Suppliers
Dual-sourcing is more preferred than single-sourcing for most businesses and organizations as a good way to reduce the number of available risks. This does not mean that a business cannot trust a single supplier but it should be natural disasters at times occurs and might disrupt the supply chain procedures of a given supplier. Use of dual-supplier services is a good way to respond to such disasters which are unpredictable in most cases. A business is thus able to use a second supplier should the main or the trusted supplier fails to deliver the intended product due to some unavoidable reasons. It is important that suppliers understand all the details that are important for the buyers to help them perfect in their roles to make sure that they involve processes that ensure timely delivery of products. This is a chance to identify special needs that the buyers are looking for and making sure that such needs are fully attended to make sure that the establish a good working relationship (Burt, Petcavage, and Pinkerton, 2011).
It is important that the selection process is done in a professional and ethical manner that make sure that critical attributes are considered and that selection and recruitment are done at the right time. This helps to make sure that the operations of a given business are not affected in any way. Despite the fact that they are general ways that are recommended selecting the suppliers that a certain business should use, the overall process is subject to the available policies that are used within a given organization. The fact that different organizations have different policies means that the selection policies are bound to be different although some similarities might be identified.
Azadi, M. and Saen, R.F., 2011. Developing a WPF-CCR model for selecting suppliers in the presence of stochastic data. OR Insight, 24(1), pp.31-48.
Burt, D.N., Petcavage, S. and Pinkerton, R., 2011. Proactive purchasing in the supply chain: The key to world-class procurement. McGraw Hill Professional.
Ehrgott, M., Reimann, F., Kaufmann, L. and Carter, C.R., 2011. Social sustainability in selecting emerging economy suppliers. Journal of business ethics, 98(1), pp.99-119.
Yue, J., Xia, Y. and Tran, T., 2010. Selecting sourcing partners for a make-to-order supply chain. Omega, 38(3-4), pp.136-144.
Goebel, P., Reuter, C., Pibernik, R. and Sichtmann, C., 2012. The influence of ethical culture on supplier selection in the context of sustainable sourcing. International Journal of Production Economics, 140(1), pp.7-17.
Ho, W., Dey, P. K., & Lockstrom, M. (2011). Strategic sourcing: a combined QFD and AHP approach in manufacturing. Supply Chain Management: An International Journal, 16(6), 446-461.
Kannan, D., de Sousa Jabbour, A.B.L. and Jabbour, C.J.C., 2014. Selecting green suppliers based on GSCM practices: Using fuzzy TOPSIS applied to a Brazilian electronics company. European Journal of Operational Research, 233(2), pp.432-447.
Partovi, F.Y., 2013. Selecting suppliers for a long-term relationship. International Journal of Management Science and Engineering Management, 8(2), pp.109-116.
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