Monday, February 10, 2020

Supply Relationships in Procurement Management Essay

Supply Relationships in Procurement Management - Essay Example In practical contexts, sourcing products from external suppliers do not lack in technical hitches, particularly hitches related to supplier performance. According to Maxwell (2005), a procuring firm expects suppliers to demonstrate high levels of production and delivery competencies. Unfortunately, maintenance of the required level of competences by suppliers may be restricted by internal factors like high costs of production, and external factors like intense industry competition. Subsequently, suppliers may deliver goods and services that are below the required standards. In this context, the significance of supplier relationship management in procurement processes cannot be overemphasized. Within practical commercial settings, outsourcing goods and services from external suppliers are indispensable. Currently, most firms in Europe and the United States are sourcing products from external suppliers in Asian nations like China and India. Apparently, suppliers in these Asian nations deliver goods and services at relatively low prices. Therefore, companies rely heavily on such suppliers. Since external suppliers are essential players in today’s business, it becomes necessary to create and maintain a healthy relationship between enterprises and their suppliers. According to Lydia (2010), supplier relationship management, commonly abbreviated as SRM, is a managerial discipline meant to optimize the efficiency of processes used in acquiring products from suppliers. Undeniably, supply chains are becoming increasingly complex. In most cases, external suppliers may sub-contract certain production processes to third parties. In addition, such third parties may assemble goo ds from products and services delivered by other parties. Therefore, elongation of supply chains necessitates the sustainable development of supplier policies.  In conclusion, it is undeniable that success of procurement exercises relies upon efficiencies within the component of supplier relationship management. Presently, and even in future, outsourcing is and will be a necessary part of the business.  

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.