LOCAL AUTHORITY SUPPLIER RELATIONSHIP

Local Authority Supplier Relationship



Local Authority Supplier Relationship

Introduction

Owing to the globalization of markets, the diversification of individual needs, and the complexity of product components, the efficiency of supply chain management has become an important factor in an enterprise's competitiveness. It is recognized that properly managing the supply chain cannot only diminish risks and uncertainty, but can also optimize the inventory level and process cycle time, so that enterprises are able to satisfy individuals and make a good profit (Womack, Daniel and Roos 1990, 19). In order for supply chain management to perform successfully, the purchasing function must be properly considered, where the significance of the purchasing function increases as the purchasing and outsourcing costs assume a greater portion of the total costs of the manufacturing process. In response to this effect, local authorities have focused more interest on the supplier relationship management system (Iansiti and Levien 2004, 78). However, until recently, researchers in this area have dealt with the supplier relationship management system by focusing solely on specific subjects, such as purchasing strategy, supplier selection, collaboration, and supplier development (Fernie and Arnold 2002, 102). Interestingly, these subjects are rarely dealt with from a holistic perspective.

1. Different types of relationships with suppliers

A purchasing portfolio model is most widely used in The local authority, especially for categorizing products to adopt a distinctive approach that accounts for the strategic implications of each category (Lichtenstein 2006, 5). Many researchers have modified and extended this model, but Kraljic's model has served as the basis for these models. Other interesting studies have focused on a strategic movement, which shows that by varying the items purchased and the purchasing types, the items can be purchased in a better condition (The Chartered Institute of Purchasing & Supply 2010).

When suppliers are in the product development stage, key considerations are optimum supplier selection and effective collaboration system implementation (Brian 2004, 20). Effective collaboration in the case of the local authority is achieved by involving the supplier early in the product development stage and fostering effective interfacing with a concurrent engineering system. The important supplier selection criteria are as follows: product, process, production, quality, trust, design expertise, communication, and innovativeness (Cousins 2005, 410). The considerations for collaboration include choosing the extent of the supplier's involvement in product development, such as timing the supplier's involvement, information exchange in design, and making buyer-supplier relationship decisions regarding issues such as the supplier's contract length, contract management, and an information exchange strategy, for example, the level of information exchange and the cost transparency (Cousins, Lamming and Bowen 2005, 562).

2. Circumstances in which supply relationships have ended

Supplier development is a process that improves the supplier's performance. To this end, local authorities reduce the supplier base and improve the remaining suppliers' efficiencies. A continuous improvement strategy is commonly exercised in this regard. A continuous improvement strategy involves the performance of plan-do-check-act cycles based on data in order to continuously improve the system, process, and manpower. It is the strategic activity that causes a local authority ...