Managing Relationships in the E-Supply Chain:
The efficiency of a company (in developing, producing and delivering products) depends on its ability to communicate with its suppliers and other channel partners. E-nabling the communication channels benefits the company by
- Reducing the cost and time required for purchasing
- Facilitating collaboration with suppliers in product design, forecasts and real-time transfer of production schedules
As the different materials and components have varying levels of importance in the production process, the relationships with different suppliers and channel partners also vary. There are various types of relationships that can exist between supply chain partners. Commodity-based relationships and strategic relationships are the most common types of relationships.
Commodity-based relationships in which a company and its suppliers of commodity products. Commodities can be either direct or indirect materials. The direct materials are raw materials or subassemblies used for developement, and the indirect materials are non-production materials such as computers, stationery, etc. Decisions on the purchase of commodities are mainly related on price and service as well as transportation and availability.
Strategic relationships are the type of companies with its suppliers of non commodity element which affect the daily operations of a company. In case of commodity element, companies may quickly obtain alternative suppliers. Non commodity items are often critical to the production of a company and there are only a few orders. Therefore, companies take these as strategic relationships and focus on them. Strategic decisions are taken lied on suitability, service, quality time and cost.
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