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The supplier network impacts on the value of products, their availability, and when best to push them in the market (Lambert, 2008). One is thus able to identify suppliers with whom they can develop long-term relationships. These associations enable organizations to formulate further product innovations which will lead to achievement of objectives.
The chain is comprised of a series of activities, entities, cultures, clients and objectives which depend on the most basic interactions (Samson and Simpson, 2008). These relationships significantly rely on the objectives of the two parties at that time. Price is the main negotiating point among the purchaser and the retailer. The size of the business against the supplier provides a substantial influence on their price interactions (Hines, 2004).
Examples of best practices in supply chain efficiency areas include:
- Supplier searches and progress reporting. It is necessary to identify alternative suppliers by utilizing the institution’s accessible set of connections along with trade catalogues.
- Supplier-customer relationships. Maintaining relationships with a small number of preferred suppliers over long contracts provide valuable advantages. It saves time in supplier searches and guarantees a stable price for products.
- IT tools. Having a central database enables easy access of information.
Capacity planning is a premeditated trade decision which involves determining the amount of capability that is required for future production. Changes happening in the market require rapid and effective response. This reaction depends on how deep the organization understands its supply chain and the available technology.
It is indispensable to recognize and understand the limits of capacity. For example, an organization may have only one department producing one product. In instances where more of the product is needed than the branch can produce, the organization can either increase the size of the department, or try to reduce the demand for capacity.
An organization with more products demands a more vigorous capacity planning process. It is required to offload work to alternative departments or put in more working hours. (Stahl & Wallace, 2003). Just as an organization strives to sustain the poise linking demand and provision, they should scrutinize the balance between demand necessities and the capacity of the producer-supplier-consumer sequence.
Examples of best practices in capacity planning include:
- Verifying results. Most of the vital data in decision making comes from understanding the variables from projected results.
- The confines of linear regression. It is necessary to understand the relationship between metrics.
- Documenting assumptions. This is necessary to assess the validity of the forecasts which were made based on postulations.
Gulfstream aerospace is a corporate aircraft production and management company. The company has a fleet of technologically superior business planes which meet price requirements and mission requirement of its clients (Savannah 2010). It is the leading jet manufacturer offering numerous services, enhancements, spares, maintenance functions and mechanical publications.
The main challenge of the aviation company has been the provision of regional support for airplane proprietors who inhabit growing markets. There is a small chance of consumers bringing their planes to a site favoring the manufacturer. Clients usually prefer services like warranty and line maintenance closer to their domiciles.
This gave the company the alternative of either developing these capabilities or forming partnerships with countries which better understand in-country relationships. The company has been networking with an America bank, to assist in the successful arrangement of aircraft transactions (Savannah 2010).
Elasticity and speed is necessary in the present market society. Response to production conditions, reacting to changing consumer demands and balancing of capacity is necessary for the success of any organization. Supply chain efficiency stratagem allows a company to evaluate the lengthy supply chain while considering their business policies. The organization will thus be able to formulate strategies to enable it effectively compete with other organizations.
Lambert, D. (2008). Supply chain management: processes, partnerships, performance. (3rd ed). Florida: Supply chain management, inst.
Hines, T. (2004). Supply chain strategies: customer-driven and customer focused. Vermont: Butterworth-Heinemann publishers.
Samson, D. & Simpson, D. (2008). Developing strategies for green supply chain management. Production/ operations management. Web.
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Savannah, G. (2010). Lombardo sees Gulfstream playing major role in globalization of business aviation. Gulfstream: news. Web.
Stahl, R. & Wallace, T. (2003). Master scheduling in the 21st century: for simplicity, speed and success- up and down the supply chain. Ohio: T. F. Wallace & CO.