Strategy And Supplier Relationship Flashcards
What can supplier relationship strategy do?
It can say something on what relationship one should have with their supplier
What is the idea of the supplier relationship strategy ?
These different strategies will give us steps to maximize our benefits and our resource use
Rationalization strategy ?
Many providers and many buyers
Often standardized or replaceable products
- The strategy is to optimize work process so that time is minimal. Efficiency is key
- Framework agreements is a typical solution
Competitive Strategy ?
Many providers
Mainly standardized products but can also be other types as well
Buyers have more power than suppliers
- strategy: prices must be as low as possible in a very competitive market between suppliers
- Typical solutions can be framework agreements with focus on price
Hedging strategy?
Often lack of products in market
Special products
Supplier have greater power and buyer may risk high prices
Strategy: ensure stable deliveries, try to find substitutes for the product (long term solution)
Typical solution will be long term contracts but also find other solutions for product
High risk strategy?
Special products with few suppliers
The product have great impact on profitability
Strategy can be long term relationship
Solutions: operational collaboration, strategic alliance vertical integration
What is operational collaboration ?
Voluntary collaboration on specific products over a certain period
What is strategic alliance ?
Important common interest within an area and collaborate outside the product area
What is vertical integration?
The organizations are adapted to each other and parties are cooperate with each other (hard to see that there is is two different companies)
What are the three main types of supplier patterns ?
Single, dual and multiple sourcing
What’s the difference between singe, dual and multiple sourcing ?
I’m is purchasing from one supplier
Dual is purchasing from two suppliers
Multiple is purchasing from three or more suppliers
Positive and negatives with single sourcing
Positive = better flow of goods, reduced indirect costs and good relationship between parties
Negatives= you only have one leg to stand on
Positive and negatives with dual sourcing ?
Positive = increased security if something goes wrong with one supplier, use the expertise of both suppliers, suppliers feels the completions forcing them to deliver good products
Negatives= ?
What is pararel sourcing ?
Delivery of the same product is shared between two suppliers (common in shipping industry)
What is see saw sourcing ?
Forcing the suppliers to compete agains each other giving the best one more work
