3.5 Supplier Relationships and The Global Value Chain
Learning Objectives
3.4. Explain how supplier relationships adds value in global value chain.
Video: What Makes a Great Supplier Relationship? (10:03)
Many companies have adopted a haphazard approach to supplier relationship management. Dennis Snyder, general managing of lighting and decorative hardware with Kohler Co., tells what they need to do in order to correct that oversight.
Media 3.5 What Makes a Great Supplier Relationship? [Video]. Supply Chain Brain.
Suppliers’ relationships are vital for successful performing businesses. Supplier relationship management is increasingly essential for companies. Supplier relationship’ value created by reducing costs, improving efficiency, and getting quality products for the same price. These benefits impact the financial results of any organization. Advantages are beneficial if the relationship with suppliers is long-term developed. To create advantages for the organization, companies and suppliers have to invest money, time, patience, resources, and willingness to communicate to find the best solution for all parties. All stakeholders involved in the process include employees, suppliers, and buyers. Increasing the complexity of changing product lines, service delivery, value, and customer satisfaction all points to becoming a function of the global value chain. Relationships between business, suppliers, and customers are increasingly important and robust, improving overall business and the global value chain. Ongoing valuable relationships can increase the popularity of quality products and the organization’s efficiency and effectiveness, determined by a business model, supply chain, customers, and suppliers.
Quality products have to be delivered on time to provide excellent service and delivery goods. By having solid and long-term relationships with suppliers, vendors will prioritize my orders and provide quality goods ahead of time. In addition, suppliers will ensure that the company will get the best products quickly without returning poor-quality goods. The next value is excellent support from suppliers with whom you have a solid relationship. For example, if the company gets damaged products or delayed shipments, suppliers will help you solve this issue as soon as possible.
Moreover, if the company delivers quality products without defects, customer satisfaction indicators will increase because customers will continue to enjoy doing business. More vital brand awareness comes from excellent customer satisfaction factors. In addition, the production or manufacturing industry depends on suppliers. If the raw material is delivered late, the company will face risks and losses. Losses such as stopping production or rejecting finished products.
Check Your Understanding
Explain how supplier relationships adds value in global value chain.
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Overall Activity Feedback
It is important to know that supplier relationship management is increasingly essential for companies. Also, supplier relationship’ value is created by reducing costs, improving efficiency, and getting quality products for the same price. These benefits impact the financial results of any organization. Advantages are beneficial if the relationship with suppliers is long-term developed. To create advantages for the organization, companies and suppliers have to invest money, time, patience, resources, and willingness to communicate to find the best solution for all parties. If the company delivers quality products without defects, customer satisfaction indicators will increase because customers will continue to enjoy doing business.
Media Attributions and References
Supply Chain Brain. (2020, January 23). What makes a great supplier relationship? [Video]. YouTube. https://www.youtube.com/watch?v=dv5-J0HOeLE
