Supplier Management

 Introduction

                           A supplier is also known as a vendor. A supplier is a person or a business entity that sells  something to the purchaser or organisation as per their requirement. A supplier generally finds some where to purchase their goods and services. The role of a supplier in a business is to provide high quality products from a manufacturer at a good price, good quality and right time to a manufacturer, distributor or retailer for resale. A supplier in a business is someone who acts as an intermediary between the manufacturer and retailer, ensuring that communication is forthcoming and stock is of sufficient quantity. Supplier may be individuals, companies or even whole countries. 

                         Supplier management involves maintaining and establishing relations with suppliers, which helps an organisation receive goods and services timely. 

Types Of Suppliers

 Suppliers may be categorized as per their functions and they are as follows.

a) Manufacturers 

                            Manufacturers is the person or a company who the making goods by using resources such as land, labor, machinery, money and raw materials to fulfill the customers requirement. A manufacturer is a producer of branded or unbranded finished goods or products. A manufacturer could be a contact manufacturer or OEM or both.

b) Stockists Or Dealer

                              Stockists is a person or organisation who has in his custody or under his control a stock of goods or products, it may be raw materials or finished goods. Stockists is a dealer who undertakes to maintain stocks of a specified products at or above a certain minimum in return for favorable buying terms granted by the manufacturer of the products. The stockists have an expertise in market evaluation and service to the market both in quality and quantity. 

c) Distributors Or Agents  

                              A distributor is an intermediary entity between a producer of a product and downstream entity in the supply chain. A distributor typically works with multiple manufacturers and multiple downstream entities. For each manufacturers, the distributor serves as an agents that enters into an agreement with the manufacturer to sell its products to retailers or wholesalers. The distributor is a person or company that buys products from a manufacturer and sells them for a profit to other businesses, stores, or customers, often by transporting the goods to different places. 

d) Sub Contractors

                              A subcontractors is an individual or a business that signs a contact to perform part or all of the obligations of another's contract. Put simply the role of a subcontractor is to execute the job they are hired by the contractor. Subcontractor means any supplier, distributor, vendor or firm that furnishes suppliers or services to or for a prime contractor or another subcontractor. 

Objectives of supplier management

                             The objectives of supplier management is to ensure that suppliers meet or exceed the buyer's expectations in terms of quality, delivery, and cost. 

Advantages of supplier management

                            There are many advantages of effective supplier management, including improved quality and delivery of goods and services, reduced costs and improved relationships with suppliers. The success of the organisation is dependent on the supplier's ability to meet the demands and delivery the goods on time. Supplier's management allows the organisation to know potential performance issues, have open communication, and ensure that the suppliers are supporting the organisation by complying with the requirements. 

a) Supplier management practices will enables organisations to identify costs savings opportunities in the supply chain and scrutinise the quality of supplier output.

b) Supplier management will allow to streamline valuable information and data regarding the lifecycle of the suppliers. It enables the organisation to have increased transparency into the number and type of engaged suppliers and how they are performing and helps in identifying areas of improvement.

c) As organisation performance is directly dependent on the performance of suppliers. So by the way of supplier management system, we can easily evaluating the performance of supplier. Supplier management includes the creation of various KPI's to measure supplier performance. 

d) Supplier management allow for better forecasting and decision making by providing a clearer understanding of what our suppliers can do. Supplier management will also help with risk management, which can be done through better supplier assessment. 

e) The supplier management will result in higher customer satisfaction level for our organisation through the ability to better manage customer expectations by providing more transparency into what is coming in and going out.  

f) Supplier management can increased  flexibility by allowing for more sources of suppliers than just one or two supplier suppliers at any given time.

g) The supplier management can allow a better risk assessment through quickly identify where disruptions could occur in our company's operations because it centralises all data so that every aspect can be analysed easily. 

h) The supplier management strengthened supply chain streamlining the process. This will result in better condition and inventory management - which in turn leads to an increased like hood of meeting customer demand, as well as increased revenue.

 

Conclusion

                 The word supplier management refers to the act of finding, obtaining and managing resources and suppliers that are important to the operations of an organisation. Supplier management is the relationship that is established between a buyer and supplier, subject to goods or services being obtained and supplied into our organisation which in return defines the type of working relationship that we should look to develop with our suppliers. 

                   Supplier management is a fundamental soft skill for all managers involved in purchasing supply. To improve business proficiency and continuously add to new competitive advantages, organisations are required supplier management tools. Supplier management is a structured program to manage suppliers and improve their impact on the buyer's business. It includes managing vendor deliverables, working collaboratively to co-develop new process, managing compliance as well as payment of invoices. 

                          The supplier manager is responsible for supplier management. He is ensuring that value for money is obtained from all suppliers. He makes sure that contracts with suppliers support the needs of the business, and that all suppliers meet their contractual commitments.