The more companies build partnerships with key strategic suppliers, the better w

Question

The more companies build partnerships with key strategic suppliers, the better will be the quality of materials and manufactured products due to lower variability resulting in lower total cost of quality. Support processes are driven by internal customer needs. However, these support processes must be aligned with key value-creation processes. Consequently, value-creation process expectations are results of external customer needs. As the authors explains, there are several support processes such as the supplier partnering which results in a successful business and a win-win situation for all parties involved. Explained how supplier partnering is beneficial to a firm as it relates to quality management.

Explanation / Answer

As we all know supplier is the party (a person or a company) that provides the goods or services to another party in business. Supplier partnering is a concept of a contract, a deal where one party agrees to sell its good or services on a predefined amount to the buyer (another party), where in buyer have a trust on the seller that there will be no breach of contract among the two. There is a relationship between buyer and seller based on the credibility, trust from the seller’s part. Both the parties are benefited with such partnership where seller will get a contract in return of his goods or services. This contract depending upon the nature of business and creditability of the customer will became a long term contract and seller enjoys the benefit of selling his product. Buyer also provides continuous feedback on the product/ services that he she receives from seller and seller can make improvement on his products.

Supplier partnering is beneficial in terms of quality management or reducing risk for the firm. In quality management main focus of the company is to improve its process by reducing the cost incurred.

Main idea behind supplier partnership is to have a good long term partnership with a firm’s supplier of the product. If a firm has good relationship with the supplier,

There will be minimal chance of fault in the product or services.

With the increasing inflation or the cost of the product, the long term relationship will incur some kind of cost neutralization and will be beneficial in terms of firm.

With the recession and inflationary increases, it is always difficult and includes more cost to find a new supplier for the firm.

It will save time for the firm, as the firm does not have to explain again and again, the process to the new vendor for its products.

Supplier partnership, also creates a value, when it come to a change, since a firm old partner or supplier already knew the needs of the business, it will be easier for the old supplier to improve its product or services in such a way that it is beneficial for the firm than to all together looking for a new supplier.

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