Importance of Supplier Rationalization Essay

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Added Value From Supply Partnership

In the contemporary supply chain, organizations prefer getting into partnerships with the players involved in the supply chain and implementing a sound supply relationship management to ensure they derive the maximum advantages. Some of the added values to the organizations that come with the partnerships are;

There will be increased performance since from the formed strategic partnerships there will be a better understanding of the areas where there is room for improvement of output. There will be frequent analysis of the partnership and the complementary services that the firm receives and in this manner, there will be organization and supplier trust created which will in turn result in improved performance.

Secondly there will be reduced turnover and minimized risk with the organization. Having irregular suppliers often results in friction between the organization and the suppliers hence high risks of not getting the goods as when needed and also the higher chances of changing the suppliers frequently. With a strategic partnership and a good supplier relationship management, there will be a quick detection of possible problem areas hence making prompt changes and curb on the supplier turn over and also uphold good working relationship with the suppliers.

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There will also be operational efficiencies when the organization gets into an effective supply partnership. From the supplier relationship, the business will form bridges that will allow them to maximize operational efficiencies. The client and suppliers will participate in giving feedback, rankings and even suggestions and in effect, the business will redirect their resources towards areas that enhance higher cost effectiveness.

The business will also have access to exceptional suppliers with the forging of partnerships In the process of forming the partnerships, there will be in-depth evaluations of the suppliers and in the process the organization can categorize suppliers, find new suppliers, improve on the suppliers and even eliminate of there is need for such a step. This will hence ensure that only the most suitable suppliers are retained in the list of partnerships hence supply the quality service in the present and even far future (Decideware, 2008).

The partnerships are also known to enhance flexibility and speed due to the joint response between the organization and supplier towards the contemporary changing markets and customer expectations and needs. The two parties involved in the supply partnership will combine their efforts to be able to….....

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