What are the benefits to a buyer when they increase the role

What are the benefits to a buyer when they increase the role of Critical Suppliers in their company’s operations?

Solution

There are few benefits when you increase the role of the critical suppliers in your business such as:-

If you increase role of the suppler that you can expect the supplier to reduce the cost for your orders in future. Because supplier will get some other benefits like share in profit, goodwill, etc. that was supplier can earn more money.

When you increase the participation of the supplier in your business than that will help the company to increase the trust and mutual understanding. That way both parties will get benefits from alignment.

A successful supplier relationship management programmed will often create a trusting partnership between a buyer and a supplier. In some cases, this may result in many key activities being transferred to the supplier on a permanent basis.    

Pricing is a sensitive issue for many procurement teams. It requires careful weighting of price volatility against the contract length, volumes and the importance of the procured product (or service) to the buying organization.

If the supplier is more close the business than you can take ideas from them to improve the operations. That way you can improve the working in a better way.

There are few benefits when you increase the role of the critical suppliers in your business such as:-

·         Reduce of price of raw material

If you increase role of the suppler that you can expect the supplier to reduce the cost for your orders in future. Because supplier will get some other benefits like share in profit, goodwill, etc. that was supplier can earn more money.

·         Increase in the trust in working

When you increase the participation of the supplier in your business than that will help the company to increase the trust and mutual understanding. That way both parties will get benefits from alignment.

·         Outsourcing certain activities

A successful supplier relationship management programmed will often create a trusting partnership between a buyer and a supplier. In some cases, this may result in many key activities being transferred to the supplier on a permanent basis.

·         Helps in reducing the price of the final product

Pricing is a sensitive issue for many procurement teams. It requires careful weighting of price volatility against the contract length, volumes and the importance of the procured product (or service) to the buying organization.

·         Continuous improvement

If the supplier is more close the business than you can take ideas from them to improve the operations. That way you can improve the working in a better way.