The Role Of Effective Buyer Supplier Relationship On Supply Chain Performance

“A horse never runs so fast as when he has other horses to catch up and outpace.”

Now a day every organization wants to live in win-win situation. These situations don’t create by one section of organization in fact all of them work together to achieve best outcome. One of them is Supply Chain Management which is competitive advantage. Supply Chain management is in every organization, even a small store near to our corner and homes operate by your mother which might not know it. Supply chain management is brain wave or blood circulation of organizations network, linked upstream and downstream in processes and activities, producing products and services which are delivered into the hands of the ultimate customer. As, they performance well for that it is very necessary to build good relationship between supplier-buyer.

Objectives:

Lead time:- “We would like to begin to whittle away at lead time. Long lead times just add cost to the entire supply chain. Short lead times reduce cost. It’s real simple”.Charles Anderson.

Lead time play competitive advantage among buyer and supplier which effect on supply chain performance. Companies have the challenge to respond to varied customer requirements and demand uncertainty. A company needs material for manufacturing, now supply chain performance start how long the processes take place. Lead times typically include two components: first is an order lead time and second is an information lead time. After order place sometime an unexpected event occur at supplier place by that he can’t meet lead time. At this position supplier and buyer should have mutual understand and make contingency plan; company should keep safety stock with it to meet the demand or supplier arrange that product from other source. Transportation delaying is another problem in lead time which is long distance, for that they should design distribution network near them and mood of transportation should select according to required time. Now, many software (EDI; electronic data interchange) are running to manage information system of lead time which provides real time data and meet the lead time.

Cost: — Cost is the value for doing any activities. Some time cost is the game changer in market. Costs have beneficial effects on supply chain performance by developing and maintain long-term relationships with buyers of goods and services and their suppliers. Cost reduction depends upon how both negotiable with each other. Cost reduction can be discount on large quantity of product. Cost advantage can be creating through elimination of waste from the process and more focus on lean manufacturing.

Quality:-Quality in a service or product is not what you put into it. It is what the customer gets out it”. Peter Drucker

Quality is the leading factor for doing any business. Some product nature is that in which customer never compromise on quality. Manufacturers spend an average 50–80% of the total product cost on raw materials so try to catch quality issues as early as possible in the supply chain and which is biggest task to maintain and sometime it effect on buyer-supplier relationships. Core object of supplier is to identify the quality practices which include quality information, process management, product design, workforce management, supplier involvement and customer orientation. Buyers are concerned with getting the right quality product at the right price while suppliers are concerned with supplying the right quality product at a price that is profitable.

Conclusion

Customers’ expectations are increasing day by day and organizations are trying their well best to achieve it. Any goal can’t achieve with good relationship and for any relationship trust is the main factor that should be on each other. Organizations also bring more technology innovation which will impact in future to sell and buy. Companies should have clear vision, ensure that maximize the potential to do it and strong planning for better supply chain management and ultimately improves competitiveness. Good relations with the supplier-buyer enhance efficiency on supply chain performance.