Strategic Considerations for Supply Chain Management

source: http://www.srgpartners.com
In Supply Chain Management, the suppliers are often considered as ‘extended enterprise’ and act as one entity for the buyers benefits. This entity is triggered by the buyer decision and the input of the buyer will cause an effect into the whole supply chain. The whole entity comprises of partnership between suppliers, manufacturers and distributors working together in fulfilling the demand of the buyer. There are many points or selection criteria in determining suppliers but as Eleni Hadjiconstantinou in her book "Quick Response in the Supply Chain", states that the basic rules of defining a partnership are:-

1) Scope of Work
2) Division of Responsibilities
3) Required Service Levels
4) Dedicated or Multi-user Facilities
5) Performance Monitoring
6) Open or Closed Book Accounting
7) Ownership of Assets
8) Length of Commitment
9) Exit Arrangements

These criteria must be well stated in the selection process as this process will lay the foundation for the relationship to grow and mature. Without these ground rules, there is high possibility that the relationship will falter.