1. CREATING AND MANAGING SUPPLIER RELATIONSHIPS
Chapter 3
CREATING AND MANAGING SUPPLIER RELATIONSHIPS

2. Disclaimer
These slides do not replace the prescribed material. All prescribed material need to be studied for assignment and examination purposes
Some of the slide content is based on the 2015 Cengage Learning Instructor resources.

3. Chapter Outline Introduction Developing Supplier Relationships
Supplier Evaluation & Certification
Supplier Development
Supplier Recognition Programs
Supplier Relationship Management
©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

4. Keys to Successful Partnerships
Successful supplier partnerships are extremely important in achieving competitive corporate performance. This is because effective supplier relations leads  to flexibility in terms of delivery, better quality, better information and better materials flows between buyers and suppliers. Developing strong, win-win, long-term strategic relationships with suppliers creates value for the buying organisation, the supplier and ultimately the end customer. Good supplier relationships also improve integration along the supply chain, which enhances supply chain performance. This learning unit considers the main aspects of developing long-term profitable relationships with suppliers.

5. Keys to Successful Partnerships (Continued)
Key ingredients for developing successful partnerships
Building trust
Shared vision and objectives
Personal relation-ships
Mutual benefits and needs
Commit-ment and top management support
Change manage-ment
Information sharing and lines of communication
Capabilities
Perfor-mance metrics
Continuous improve-ment
Monitoring Supplier Relationships

6. Supplier Evaluation & Certification
This is process to identify the best and most reliable suppliers
Frequent feedback can help avoid surprises and maintain good relationships.
Suppliers should be allowed to provide constructive feedback to the customer
Supplier Certification refers to “an organization’s process for evaluating the quality systems of key suppliers in an effort to eliminate incoming inspections.” -Institute for Supply Management

7. Supplier Evaluation & Certification (Continued)
Supplier evaluation and certification
Weighted criteria evaluation systems
What to know:
(1) How to calculate the weighted criteria (see example 3.1)
(2) The 7 steps (pp 84-85)
ISO 9000
1) The difference between the 4 family standards of ISO9000
ISO 14000
The purpose of ISO 4000

8. Supplier Evaluation & Certification (Continued)
The Weighted-Criteria Evaluation System
Select the key dimensions of performance mutually acceptable to both customer & supplier.
Monitor & collect performance data.
Assign weights to each of the dimensions.
Evaluate performance measures between 0 & 100.
Multiply dimension rating by weight & sum of overall score.
Classify vendors based on their overall score: Unacceptable, Conditional, Certified, & Preferred
Audit & perform ongoing certification review.

9. Supplier Development Supplier development
There are 7 steps in supplier development:
Identify critical products & services
Identify critical suppliers not meeting performance requirements
Form a cross-functional team
Meet with top management of supplier
Rank supplier development projects
Define details of Agreement
Monitor status & modify strategies

10. Supplier Relationship Management (Continued)
Five key points of an SRM system
Automation handles routine transactions
Integration spans multiple departments, processes, & software applications
Visibility of information & process flows
Collaboration through information sharing
Optimization of processes & decision making

11. Activity
Wisner et al (2016:95) discuss the five key tenets of supplier relationship management. Think of an certain organisation – now consider the five tenets and think of ways in which your organisation has utilised them. Discuss your thoughts with your fellow students and e-tutors on the discussion forum.