May 08, 2011
Buyers and Suppliers Relationship
A buyers and suppliers relationship is often conflicting but their main objective is for each party to maximize its time, resources as well s their cash investments (Ireton, 2007). Sometimes these relationships have competing priorities and much like a marriage, will put a strain on the relationship. Each is dependent on the other in some way. According to our text, to determine whether a particular strategic alliance is appropriate for your firm, consider how the alliance will help address the following issues: Adding value to products. A partnership with the appropriate fim can help add value to existing products. For example, partnerships that improve time to market, distribution times, or repair times help to increase the perceived value of a particular firm. Similarly, partnerships between companies with complementary product lines can add value to both companies’ products. Improving market access. Partnerships that lead to better advertising or increased access to new market channels can be beneficial. Strengthening operations. Alliances between appropriate firms can help to improve operations by lowering system costs and cycle times. Facilities and resources can be used more efficiently and effectively. Adding technological strength. Partnerships in which technology is shared can help add to the skills base of both partners. Also, the difficult transitions between old and new technologies can be facilitated by the expertise of one of the partners. Enhancing strategic growth. Alliances provide a tremendous opportunity for organizational learning. In addition to learning from one another, partners are forced to learn more about themselves and to become more flexible so that these alliances work. Building financial strength. In addition to addressing these competitive issues, alliances can help to build financial strength. Income can be increased and...
References: Ireton, S. (2007, October 03). Supplier relationship management: steps to successful supplier - buyer partnerships. Manufacturing & Logistics IT, Retrieved from http://www.logisticsit.com/absolutenm/templates/article-critical.aspx?articleid=3312&zoneid=31
Simchi-Levi, D. Kaminsky, P. & Simchi-Levi, E. (2008). Designing and managing the supply chain: concepts, strategies and case studies (3rd ed.). New York: McGraw-Hill.
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