Supplier
Relationship
Management
MNP3703
, Study Unit 1: What is Supplier Relationship Management?
1.1 Suppliers → Focus of purchasing management and strategic sourcing
Purchasing Management → systematic process of deciding what, when and how much to purchase → purchasing it +
the process ensuring → required is received on time + quantity and quality specified
Purchasing management → deals with processes used to obtain goods and services → satisfy needs of enterprise →
utilizing → following steps:
• identifying the need
• finding and choosing the right supplier to fulfil the need
• negotiating matters such as price, quality, and quantity with the supplier
• ensuring that the goods or services fulfilling the need are delivered according to the agreed conditions
• maintaining files and records to document the transaction
Strategic sourcing → process → spending is analyzed and categorized according → importance & cost of purchase as
well as the complexity of the supplier base. Supply based is then investigated → ensure correct relationship is formed
1.2 The nature of supplier relationships and the management thereof
The suppliers influence on relationship → focusing on 2 aspects
1. Value of business offered by buying organization → terms of supplier turnover levels
2. Level of attractiveness → buying organizations business has for supplier
Supplier perception model:
• Marginal: supplier views → buying organizations current business → non-essential.
• Exploit: Maximize own gain → along with marginal = least positive
• Develop: By increasing level of current performance → hope of escalating business dealings
• Core: Value of business + level of attractiveness → buying organizations are both significant
,Buyers influence on the relationship:
Buying organization will execute analysis of level of risk + complexity an item/service holds for the organization opposed
to value spend allocated to item/service
Supplying positioning model:
A buying organizations comparison of → perception model and the supply positioning model:
1.3 Types of relationships between buyers and suppliers:
Buyer/supplier relationship → compromises any interaction between a buying organization and a supplier. Either
positive (good) or negative (bad). Most successful relationships → byers + suppliers develop mutual trust
, Characteristics of 3 principle classes – transactional, collaborative and alliance buyer/supplier relationships.
Skills required for effectively managing buyer/supplier relationships:
The ability to adopt a shared understanding between partners.
• Ability to recognize → level of cultural match between partners.
• Skills to foster high quality relations.
• Ability to manage relationships through changes in contractual obligations.
• Skills to manage consortium-based relationships.
Relationship
Management
MNP3703
, Study Unit 1: What is Supplier Relationship Management?
1.1 Suppliers → Focus of purchasing management and strategic sourcing
Purchasing Management → systematic process of deciding what, when and how much to purchase → purchasing it +
the process ensuring → required is received on time + quantity and quality specified
Purchasing management → deals with processes used to obtain goods and services → satisfy needs of enterprise →
utilizing → following steps:
• identifying the need
• finding and choosing the right supplier to fulfil the need
• negotiating matters such as price, quality, and quantity with the supplier
• ensuring that the goods or services fulfilling the need are delivered according to the agreed conditions
• maintaining files and records to document the transaction
Strategic sourcing → process → spending is analyzed and categorized according → importance & cost of purchase as
well as the complexity of the supplier base. Supply based is then investigated → ensure correct relationship is formed
1.2 The nature of supplier relationships and the management thereof
The suppliers influence on relationship → focusing on 2 aspects
1. Value of business offered by buying organization → terms of supplier turnover levels
2. Level of attractiveness → buying organizations business has for supplier
Supplier perception model:
• Marginal: supplier views → buying organizations current business → non-essential.
• Exploit: Maximize own gain → along with marginal = least positive
• Develop: By increasing level of current performance → hope of escalating business dealings
• Core: Value of business + level of attractiveness → buying organizations are both significant
,Buyers influence on the relationship:
Buying organization will execute analysis of level of risk + complexity an item/service holds for the organization opposed
to value spend allocated to item/service
Supplying positioning model:
A buying organizations comparison of → perception model and the supply positioning model:
1.3 Types of relationships between buyers and suppliers:
Buyer/supplier relationship → compromises any interaction between a buying organization and a supplier. Either
positive (good) or negative (bad). Most successful relationships → byers + suppliers develop mutual trust
, Characteristics of 3 principle classes – transactional, collaborative and alliance buyer/supplier relationships.
Skills required for effectively managing buyer/supplier relationships:
The ability to adopt a shared understanding between partners.
• Ability to recognize → level of cultural match between partners.
• Skills to foster high quality relations.
• Ability to manage relationships through changes in contractual obligations.
• Skills to manage consortium-based relationships.
