What does supplier management entail?

Suppliers are enterprises, their branches, and individual businesses, including manufacturers, distributors, and other intermediaries, that provide goods and corresponding services directly to retailers. Also known as "vendors", i.e., individuals or legal entities that supply goods.

Suppliers can be farmers, production bases, manufacturers, agents, wholesalers (limited to the first level), importers, etc., should be avoided too many intermediate suppliers. Examples include: second-tier wholesalers, distributors, purveyors (dumpers), or companies run by friends or relatives.

In logistics and procurement in the proposed customer relationship management is not a new concept, in the traditional marketing management has long been put forward the idea of relationship marketing, but, in the supply chain environment and the traditional customer relationship is very different. The customer in marketing refers to the user of the final product, while the customer here refers to the supplier, not the end user.

Expanded Information

From the supplier's point of view, if just-in-time purchasing is not implemented, due to the lack of cooperation with the manufacturer, the inventory and delivery lot size are larger, and effective control cannot be obtained in terms of quality and demand. By establishing a just-in-time purchasing strategy, the manufacturer's JIT thinking is extended to the supplier, strengthening the link and cooperation between supply and demand.

Under the open and dynamic information interaction, suppliers are able to respond quickly in the face of changes in market demand, which improves their resilience. For manufacturers, through the establishment of cooperative relationships with suppliers, the implementation of just-in-time purchasing, management level has been improved, the manufacturing process and product quality have been effectively controlled, costs have been reduced, and the agility and flexibility of manufacturing have been increased.

Baidu Encyclopedia - Supplier Management