subject: Improving Relations Through Supply Chain Management [print this page] Improving Relations Through Supply Chain Management
Before we understand how a supplier relationship management works, it is important to through a light on what exactly is a supply chain management. In simple words, managing the flow of goods and services needed to complete a product and then deliver it to the customers is termed as supply chain management. Currently, this strategy forms an integral part of every company's overall planning to meet their customer demands. These logistics solutions involves the choice of suppliers for the goods and services need to make a product in the first step and then developing the process with those suppliers for price fixation, delivery and payment as the second step.
It is here that the supply chain incoming collaboration steps into the picture as the supply chain management managers are required to manage the inventories, verify the shipments followed by authorization of payments and transportation of goods. It is after this that the manager is required to schedule the production, testing and packaging of the product and finally, he is also responsible for the delivery of the product to the customers' end which leads to an outgoing collaboration!
Building Relations Through Logistic Solutions
One of the most crucial success factors that determine the efficacy of the supply chain management is the approach of negotiation between the sellers and the buyers! This requires some thinking now; squeezing the suppliers for a desired outcome could backfire in the long run while forcing suppliers to reduce the price would be a win-lose relationship in the short run! It could also turn out to be a lose-lose relationship if the buyer is consistent with his method on the same supplier for the buyer would lose its competitive edge owing to the inferior product delivery. All of this leads to a solution: negotiating with a win-win relationship at all time and this is known as supplier relationship management.
This involves the instilling of a positive behavior that would in turn foster the trust between the supplier's network. The relationship thus matures to a strategic partnership. The win-win relationship in a supplier relationship management does not only revolve around the cost and quality alone but it also includes the future collaborations. It ultimately ensures a favorable working environment for both the parties. Obviously in the initial stages, the trust is minimal or even zero; the essential information of finance, etc are kept secretive and the circulation of other information is also kept minimal.
The supplier relationship management begins with breaking these barriers; a successful network of suppliers can be developed only when vital information such as the finance and product data are on an open-based communication. We all know that open communications foster trust and problem solving. Also, innovative ideas and creations also bloom under open communications. Logistic solutions are solved on this basic principle. The management policy also involves ensuring that every member is involved and addressed with specific responsibilities which foster productivity and responsiveness.
