Posted: February 28th, 2022

Identify productive supplier relationships

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Learning Objectives Covered
LO 04.01 – Identify productive supplier relationships
LO 04.04 – Explain the risks and challenges within supply chain management
Career Relevancy
Successful supply chains depend on the relationship with suppliers. The connection between an organization and its suppliers is a perfect example of how a good relationship can improve business processes and goals.
Background
This week our attention turns to supply chain management, specifically focusing on supplier relationships, operational issues, challenges, and the process of logistics. So, what is it and why do we care about it?
Supply chain management is the process of how goods and services convert from raw materials to the final products. It is the collaboration of all the various departments, such as shipment, production, sales, distribution, and inventory.  The supply chain has 5 distinct, but interwoven parts:
—The strategy or plan for how the product or service goes
from beginning to end
–Source of raw materials or service
–Manufacturing
–Delivery and logistics
–The return system for unwanted or defective products
Suppliers
Suppliers are individuals, resources, or organizations that work with a company in the manufacture of a good or service. Considering how important suppliers are to the whole supply chain, cultivating and maintaining productive relationships is crucial:
Build strong relationships
Be a good customer
Be clear in your contracts
Communicate effectively
Define performance management expectations
We’ll go into more detail about each one in the next discussion.
Risks and Challenges
With the different components to the supply chain, it is not hard to imagine the risks that may pop up:
Raw material shortages: some materials are vulnerable to demand spikes or lack of an essential component. When an essential ingredient or component becomes scarce, the cost of production goes up.
Recalls and safety scares: this risk causes consumer trust to go down which can in turn decrease sales and demand.
https://www.mazdarecallinfo.com/?semid=CR-SEM05002&servicetag=CR-SEM05002&k_keyword=latest%20vehicle%20recall&k_matchtype=b&ef_id=X-TB-gAAAL1kOSer:20210720213625:s (Links to an external site.)
Trade concerns: companies must continually adapt their supply chain in response to shifting changes in trade agreements.
Economic uncertainty: this risk causes prices to rise and increases financial pressure.
Environmental regulations: as climate changes and air pollution increases, there are more stringent regulations to protect the environment.
Climate change: changes in climate can affect water supply, wildfires, and tropical storms which can affect crop production and drought conditions.
Industrial issues: labor issues and strikes are risks that may occur and have to be taken into consideration.
The video below shows the different supply chain strategies McDonalds and Starbucks use (8:58 min).
Resources and References
Hayes, A. (2019, August 11). Supply chain management. Investopedia. Retrieved from https://www.investopedia.com/terms/s/scm.asp (Links to an external site.)
Katie. (2017, August 14). 6 keys to a productive supplier relationship. Retrieved from https://www.forecast.ly/6-keys-productive-supplier-relationship/#content_upgrade_popup_4481 (Links to an external site.)
Kamal, S. & Larsson, T. (2019, Quarter 2). The top 10 supply chain risks of 2019. Supply Chain Quarterly. Retrieved from https://www.supplychainquarterly.com/topics/Strategy/20190514-the-top-10-supply-chain-risks-of-2019/ (Links to an external site.)
Tang, James. (2017, July 6). Starbucks vs McDonalds – Strategic operations and supply chain management. Retrieved from YouTube:  https://www.youtube.com/watch?v=ijRgTalA0v0 (Links to an external site.)
Wins, M. (2019, January 10). 10 strategies for improving supplier relationship management. Supply Chain Academy. Retrieved from  https://www.supplychain-academy.net/strategies-improve-supplier-relationship-management/ (Links to an external site.)
Prompt
Locate an article on current challenges in supply chain management. Give a summary of the article. What risks were discussed? How does the supplier relationship fit into this?
For your citation, you might use articles that show examples of companies that have had issues in supply chain management.
Your initial and reply posts should work to develop a group understanding of this topic. Challenge each other. Build on each other. Always be respectful but discuss this and figure it out together.

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