CHAPTER- 6

SUPPLIER
PARTNERSHIP
 CONCEPT

Supplier partnership is an
approach to develop and
maintain partnership relations
with suppliers with a view to
reduce cost and increase vital
competitiveness in the market.

It is vital for success today.

Principles of Supplier
Relations
1. Control of quality by both
customer and supplier.
2. Independence of both
customer and supplier.
3. Clear and sufficient
requirements to the supplier
so that supplier can know
what to produce.
Principles Continues

4. Non-adversarial contract
between them with respect to
quality, quantity, price, delivery
method and terms of payments.
5. Supplier is responsible for
providing the quality and
needed infirmation /data to the
customer.
Principles Continues

6. Joint decision about methods

of quality evaluation to the
satisfaction of both parties.
7. Mutual contract on amecable
dispute settlement methods.
8. Continually exchange of
information between supplier
and customer.
Principles Continues

9. Maintain amicable and

satisfactory relationship through
similar business operation and
methods.
10. Keep the interests of end users
in the course of business
transaction in the mind of both
customer and supplier.
PARTNERING :HOW

• What is partnering?
• Partnering is a long-term
commitment between two or
more organisations for the
purpose of achieving specific
business goals and objectives
by maximising the effectiveness
of each participant’s resources.
ELEMENTS OF
PARTNERING
• Long-term commitment.
• Trust- a new business paradigm
based on fairness, parity, win-
win solutions and shearing
resourcing and information.
• Shared vision.
OUTCOMES OF
PARTNERING
• Increased quality.
• Lower cost.
• Increased opportunity for
innovation.
• Continuous improvement of
product and services.
• Increased efficiency.
SUPPLIER SELECTION
• STRATEGIC CHOICE
- Insourcing.
- Outsourcing.
Decision Variables
-Cost.
-Delivery Speed.
-Quality.
- Safety.
-Acquisition of technical
knowledge.
SELECTION
CONDITIONS
1. Supplier’s understanding and
appreciation of management
philosophy of organization.
2. Supplier has a stable
management system.
3. Supplier maintains high standard
and has the capacity to deal with
future technical innovations.
Continues
4. Supplier can provide required
quality raw materials and parts.
5. Capability to produce needed
amount of production or can attain
that capability.
6. No danger of breaching corporate
secrets.
7. Right price and on-time delivery.
Continues
8. Sincerity in implementing
contractual provisions.
9. Effective quality system and
improvement program.
10. Track record of customer
satisfaction and organisational
credibility.
Sources of suppliers

• Sole sourcing. Orgnisation

is forced to use single
source.
• Multiple sourcing.
• Single sourcing.
Organization decides to
use single source.
FARTORS FOR
SUPPLIER RATING
• Internal structure.
• Regular and formal review
process.
• Standard measurement
system for all the
suppliers.
MEANS OF RELATIONSH
DEVELOPMENT
• 1. Inspection
-100 percent inspection.
-Sampling.
-Audit
- Identity Check.
2. Training.
3. Team approach-Customer-
supplier team.
4. Recognition.
THANK YOU ALL