Customer-Supplier Relationship | Total Quality Management
The positive customer-supplier relationship begins with the initiative of the supplier to demonstrate his sensitivity to the customer's needs. A customer always. Many customer-supplier relationships were weakened or damaged during the economic downturn. To rescue them, both sides need to acknowledge past. Customer-supplier relationship (CSR) is deemed vital in supply chain management (SCM) processes; well researched, received, understood.
Promptness of deliv- tion Barratt These may be only ery leads to smooth production processes, dis- achieved as a result of smooth and flexible com- tribution of commodities and ultimately custom- munication between the parties involved Liao er satisfaction.
In addition, Koh et al. There should, however crease in inventory holding costs. Stockpiling be a close relationship with customers in order may lead to obsolete stock if there is lower de- to ascertain the trends of customer demand mand for particular products. Kannan and Tan The optimal strategy utilised by these relationship is maintained with suppliers.
This different suppliers, coupled with their associat- is supported by Hashim et al. Trkman and McCormack decision making.
10 Must Have Customer Supplier Relationship Areas – How Many You Have?
With good relationships, SMEs Qual- Firms who achieve successful negotiating ity performance is the priority in identifying the power over their suppliers are likely to meet the best suppliers. They enjoy the the quality of supplier selected is significant to benefits of a large customer base because of product quality and costs, that a quality control reliability resulting from smooth production pro- system of supplier information and quality per- cesses, delivery of quality goods on time, and formance assist in selecting the right price for responsiveness to customer queries.
Custom- components, and that a close buyer-supplier ers play a significant role in SCM, thus it is point- relationship acts as a prerequisite for informa- less without targeting the end customer. In their findings, Shin et al. SMO have improved buyer-supplier relation- Communication is still vital to ensur- ships.The Vendor Client relationship - in real world situations
For Kannan and Tan Supply lead time refers to the time between commitment to product, which Cost Benefit Impact on JIT implies identifying the desired product, placing an order, and getting raw material from the sup- The relationship in SCM between custom- plier until goods reaches the final stage the con- ers and suppliers may significantly impact the sumer de Trevill et al.
Supply lead cost benefit of JIT implementation. When in- time needs development to ensure reduced lead ventory is kept for longer periods in the busi- time in the production of goods to delivery, and ness, the holding costs escalate. The rising prices is defined by Pearson and Olhager Owing to increased inflation and deterioration in liquidity it is crucial for firms to The significance of JIT was recognised in elevate the productivity level of their capital and the early s Kim and Ha It is therefore important to determine how chain Zhou et al.
It reduces the set costs associated with each asset in conjunction up time, improves quality, flexibility, and remark- with its turnover impacts on the total cash flow able service delivery from suppliers by building time.
This can be measured by the average num- a long-term relationship between suppliers and ber of days required to convert cash invested in customers. The suppliers work in collaboration assets into the cash collected from a customer with the customer.
However, this is only possi- Bhaghwat and Sharma Customer-supplier integra- gle supplier, thus strengthening the relationship tion is viewed as a purchasing vital tool for a JIT between buyer and supplier.
Customer Relationship with Supplier
On the contrary, production system Kim and Ha The with their suppliers, which also enables them to small lot sizes save the buyer from incurring implement and enforce the CSR standard re- holding costs while fulfilling the benefit of JIT quired through the value chain Jenkins When favours the lot size reduction by emphasising SMEs form collaborative partnership amongst the simplicity and the need to perform many sim- themselves based on open systems and infor- ple tasks in a series than one complex operation.
This may eventually tion including supply chain members such as lead to effectiveness and enable smooth imple- suppliers, and process design that is focused mentation of JIT.
Moreover; this collaboration on product design Mackelprang and Nair Collaborations among SMEs have been ing what is critical towards their improved per- fostered by saving costs, gain buying powers formance management system Kim and Ha with suppliers, permitting them to obtain better Trust between buyers and suppliers is deals, enables access to big projects and fund- deemed important by offering SMEs with an al- ing, increases flexibility and performance among ternative to manage inter-firm relationship par- business as well as product quality and innova- ticularly relationships with their suppliers tion towards business performance improvement Mishra Some of the problems envis- ship with suppliers, other obligations and re- aged are lack of strategic co-operative planning sponsibilities shared by few managers involved as a result of unskilled personnel, scarcity of in the value chain may be ignored.
Although resources and inability to devise new business CSR acts as a prerequisite for JIT, it is also a opportunities due to lack of time and knowledge challenge for SMEs to maximise on this relation- know how Casals Urban and ship building with suppliers, therefore other av- Mothusiwa A lit- Involvement is CSR is crucial in enabling a erature review on customer-supplier relationship successful and effective environment in the val- and JIT implementation was discussed as a pre- ue chain that strives to meet the demands of the liminary investigation to provide an in depth customers.
However, SMEs still lack proper in- understanding of the significance of customer- volvement in CSR which is caused by deficien- supplier relationship towards a successful JIT cy of power, human capital, financial and bar- implementation in SMEs. Findings from the clients, most of who buy in small quantities that literature and the managers of SMEs in purpo- would not necessarily require formal placement sively selected businesses indicate that al- of orders.
Therefore, JIT im- negotiating power over their suppliers due to plementation may not be the ultimate since the small scale orders Pedersen It is only through involvement with planned demand. Most SMEs operate ing may serve as the basis for meeting all cus- on a stockpiling basis to avoid stock shortages tomers demands, particularly in periods of high during periods of high demand. Some firms uti- demand.
Customer Supplier Relationship
They may not suffer from delayed de- lize multiple suppliers for different products liveries from their suppliers and that may help Singh It is therefore evident from them to cater for safety stock and maintain their these findings that achieving a JIT manufactur- re-order point to circumvent an out-of-stock sit- ing system is still a milestone for SMEs.
However pay the lowest possible ordering and holding some firms indicated that JIT would be benefi- cost for their order quantities. Moreover, JIT may cial to their businesses thus help them to mini- also be a threat to SMEs, resulting from fear of mise unnecessary costs such as holding costs losing their customers during periods when de- which concur with the literature Liao et al. Understanding the meaning of collab- inefficient technological equipment and lack of oration in the supply chain.
Supply Chain Manage- ment: An International Journal, 9: A balance score- card approach. World Class Supply Chain Management: The Key to Supply Chain Man- cance. An exploratory study that involved a agement. Strategically managed buy- adopted to understand the significance and im- er—supplier relationships and performance outcomes.
Major findings in this study in- The SME co-operation framework: A dicate that SMEs still do not have negotiating multi-method secondary research approach to SME powers over their suppliers due to small scale collaboration.
Again most of these businesses operate business, Management and Economics, 3: They help smaller suppliers who may be vulnerable. These suppliers have to struggle to adopt multiple standard and other procedures as required by the manufacturing company.
Quality initiatives Quality standards can be set mutually from the start and any problems in supply can be rectified together for better customer supplier relationship. Typically, this concurrent or simultaneous engineering approach will help engender strong commitments to make the new product a success if both the supplier and the manufacturer are involved and feel responsible for it.
Unfortunately in my experience manufacturers and suppliers are not following these ideals in the real manufacturing world. But I believe we should for better transparency. A cohesive quality planning is essential to foster continuous improvement, defect prevention and process optimization. It is required during all phases of product and process development. A living quality planning is a must be maintained throughout all phases of the product life cycle for continual customer supplier relationship.
Manufacturers have historically looked to suppliers to provide annual cost savings.
10 Must Have Customer Supplier Relationship Areas – How Many You Have?
And today, manufacturers are asking even more of their suppliers, including compliance with regulatory reporting requirements. Just like customer suppliers needs to make money. Like you, supplier needs to be turn out to be winner. If they make good margins from your business, they would want to do well and performance better which will lead to better customer supplier relationship.
But many non-serious suppliers sabotage the deal in the beginning only by making the customer struggle to even getting a relationship started. The lapses and diversions on the part of the suppliers can affect their relationship in many ways as given below: The customer expects overall attention and convenience in all departments to ensure smooth fulfillment of his needs.
This includes quality, timeliness, ease of access and commitment of conditions.
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He wants to believe that the supplier cares for him. Customers assess the supplier through competition based on the pricing and quality of their products, its reliability, its technological background and industry trends. These factors affect the deal. It is difficult for the supplier to divert the customer from their quality assessment. Customer knows and lives the products more than the supplier does, as he is working on them and is in a position to suggest innovation and development for the products.
Suppliers have to be ready for providing financial advantages as loan, extended terms on purchases and postponement of debt when demanded by their loyal customers particularly at their growth stage or when they are into a financial crisis.
On the other hand suppliers also have a right to get their needs met as they are ultimately motivated by profit. They want to be known as the best in their deals so they count on customer loyalty and satisfaction at all levels which translate into direct benefit of both of them. Therefore it is only win-win relationships between them in all stages of the customer-supplier chain to produce total satisfaction.