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Aniruddha Bagool 04
Ankita Bhawsinka 05
Archana Pandurangi 09
Hari Shankar Sharma 18
Nimit Vishnani 30
Rohit Desylva 37

Criticality of Supplier Focus

 Earlier…
• Relationships earlier between customers and suppliers –
confrontational and adversarial.

• “Win-loose” philosophy.

• Overall customer dissatisfaction and disloyalty

• Adversely affected manufacturer’s competitive positions in

the market.

• Capture some of each other’s profit margin.

 Why focus on Suppliers?

What truly separates successful competitors

from the "also rans" in today's global
competitive race is suppliers.
Many companies that the years have thrown
"everything" into the battle for competitive
advantage are only now coming to admit that
their best and strongest resources are their
suppliers.
These are the silent partners who back them
with the ideas, quality, and dependability that
make them competitors, everyday.
 Importance of Supplier Focus
Inventory Cost-
Commitment to competitiveness
Accessibility
Quality

Logistics/ Supplier Communication

Location Focus

Financial Flexibility and Timely service

stability special services
 Importance of Supplier Focus

 Commitment to quality
Product quality is regarded as an essential factor in selecting a
supplier. With a manufacturer it's important to have Quality Control
people on the team to realistically appraise the supplier's control
standards and methods of measuring quality.

 Cost-competitiveness
Competitive pricing is another huge factor, especially for
businesses that are smaller or experiencing financial difficulties
 (contd…)
 Communication
Suppliers that do not maintain a policy of open communication—or
even worse, actively practice deception—should be avoided at all
costs. The frustrations of dealing with such companies can sometimes
assume debilitating dimensions. Moreover, constant exposure to such
tactics can have a corrosive effect on internal staff.

 Timely service
Businesses strategies are predicated on schedules, which in turn are
based on receiving shipments at agreed-upon times. When those
shipments slip, business strategies suffer. The blow can be particularly
severe if the supplier is negligent or late in reporting the problem.
"Reliable delivery is first among the basics of what they expect from
suppliers. It doesn't have to be instantaneous—it just needs to get
there when the suppliers promised it would.
 (contd…)

 Flexibility and special services

Many purchasers express appreciation for suppliers that take extra
measures to satisfy their customers. These "perks" can range from
after-hours accessibility to training or inventory support

 Financial stability
Businesses that allocate large sums for purchasing materials often
prefer to make long-term deals with suppliers that are financially
stable. Such arrangements not only convey security, but they allow
companies to learn about one another and gain a fuller understanding
of each business's needs, desires, operating practices, and future
objectives.
 (contd…)

 Logistics/Location
Supplier capabilities in this area include transportation capacity,
sourcing capabilities, and 'just-in-time' performance.

 Inventory Accessibility
With a manufacturer, emphasis has to be on inventory accessibility. If
the supplier has a ‘just in time’ program with 24-hour assured delivery,
it's in better condition than the manufacturer with a lot of raw material
inventory and an eight-week lead time for raw material."
 (contd…)

 Ability to provide technical assistance

Suppliers with top research and development capacities can be quite
valuable to buyers, providing them with significant savings in both price
and quality

 Market knowledge
Suppliers with extensive knowledge of market conditions and mastery
of contemporary issues impacting your business can be immensely
valuable in helping small companies chart a course to sustained
financial success.
 5 Forces of Market

New entrants

Suppliers Buyers
Company

Substitutes
 PRESENT SCENARIO

• Suppliers are viewed as partners

• No win-lose battle concerning price.

• Supplier relations are build on cooperation, collaboration,

and trust.

• Rate suppliers on the basis of quality and reliability.

• Arrangement for alternate suppliers for contingency sake

 Creating Better Relations

 There can be a sense

sense of commitment
commitment to the supplier. For
example, if a vendor sells light bulbs, he can feel confident that
the buyer will come to him the next time the company he
represents requires a new shipment of light bulbs.

 Another element of supplier relationships is advanced planning

Buyers don't just communicate with suppliers when a
procurement need arises; they also contact them in order to
discuss their future needs and to determine how best to satisfy
those needs by working together.
 (contd…)

 Vendors that are deemed to be partners are encouraged to

become knowledgeable about the company, its processes, its
products, and its goals. The result is greater buyer satisfaction
with the services provided by the supplier.

 A study of IT directors found that vendors who were considered

commodity providers delivered unsatisfactory service almost
half of the time while suppliers who were thought of as partners
delivered excellent service some of the time and good service
most of the time.
 (contd…)

 The press routinely praises industry giants such as Wal-Mart,

FedEx, American Honda and Dell for the innovative ways in
which they manage suppliers and the impact these successful
relationships have on their company's bottom line .

 The implication is that all companies need partnerships with

their suppliers, and the more the better . Yet, is this true, or is
the rush to partner hiding hidden costs and dangers? Does one
size or model fit all or does the nature of the market or industry
drive differences in supplier relationships?
 Honda suppliers are a critical part of the business and directly contribute to the ability to
meet and exceed customers' expectations. With this is mind, the company regularly and
strategically employ several outreach initiatives to attract, develop and retain ethnic
minority suppliers at all business and manufacturing operating units.
 
 Professional purchasing/acquisition managers conduct these workshops to educate
potential ethnic minority suppliers on Honda business operations, formulating strategic
alliances and joint ventures, loan and venture capitalization, empowerment programs and
other available resources.
 
 Honda regularly conducts "Fast Track Workshops" for first and second tier suppliers to
share Honda's commitment to diversity and inclusion, describe how to do business with
Honda and purchasing as well as acquisition policies and procedures.
  
Honda procurement offices conduct monthly "open door" meetings with suppliers to learn
about the goods and services provided by MBE suppliers in their local region and to
assess opportunities for business relationships based on quality, cost, delivery and market
competitiveness.
 On the “upside”, it appears that the new-look Kraft will be
wanting to expand its presence worldwide, creating a demand
for new FMCG logistics capability in both established and
emerging markets and providing opportunities for new logistics
business.

 However, the global nature of the expansion of Kraft and other

FMCG companies indicates they will be looking for logistics
partners with global reach and sophisticated capabilities. That
suggests many smaller LSPs  will be squeezed, while the big
leading LSPs, such as CEVA and DHL, will benefit.
 Managing the supply chain
The cooperative was formed to bring together farmers. It was later recognised
that professional managers and technocrats would be required to manage the
network effectively and make it commercially viable.

 Coordination
 Given the large number of organisations and entities in the supply chain and
decentralised responsibility for various activities, effective coordination is critical
for efficiency and cost control. GCMMF and the unions play a major role in this
process and jointly achieve the desired degree of control.
 Buy-in from the unions is assured as the plans are approved by GCMMF's
board. The board is drawn from the heads of all the unions, and the boards of
the unions comprise of farmers elected through village societies, thereby
creating a situation of interlocking control.
 The federation handles the distribution of end products and coordination with
retailers and the dealers. The unions coordinate the supply side activities.
 These include monitoring milk collection contractors, the supply of animal feed
and other supplies, provision of veterinary services, and educational activities.
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