COMMERCIAL RELATIONSHIP

Commercial Relationship Management

Commercial Relationship Management

Introduction

Every organization must focus on three main management tasks: the management of processes, management of relationships and management of change. The most important function is managing commercial relationship which is the most important factor to do business in present day world by considering competition. It decides whether the organization is successful or not. When I think about relationship, the most important element that comes in my mind is relationship with stakeholders. Relationship must be taken into consideration while attaining organizational goals and objectives. The main part is to manage strong bond with stakeholders. There are two types of relationship: good and bad. Good relationship is the key to organizational success whereas bad relationship with stakeholders has a negative effect on organizational productivity, profitability and performance of jobs.

There are many ways through which commercial relationships are managed globally. Information sharing, strategic alliance, mergers and acquisitions, franchises and many others are the way to connect to the world's market and operate in global activities. The key to successful relationship is to manage supply chain. That is to maintain good relationship with company's suppliers by considering long term profitability and success of organization.

Supply Chain Management

According to Webster's dictionary, relationship is defined as:

“The mutual exchange between two people or groups

Who have dealings with one another?”

The relationships are maintained on the basis of effective supply chain management. Supply chain management “represents the philosophy of managing technology and processes in such a way that the enterprise optimizes the delivery of goods, services and information. Supply chain management has increasingly become a strategic necessity for corporations. In recent years the validity and necessity of a robust and effective supply chain methodology has become evident with announcements of major schedule delays by aerospace corporations due to unknown and unforeseen supplier and internal inefficiencies and unacceptable performance. All leverage and cost gains are being lost in alternate work strategies driven by schedule delays and the demands of customers or consideration. Interest in any and all performance improvement techniques and methodologies to address these performance and oversight issues are being pursued.

Supply chain management has roots in the focus on lean and efficient manufacturing. These lean efficiencies were driven by corporations initiating cost saving changes to the business process. Supply chain management is seen as a process-driven approach to streamlining the business. High-tech industries streamline by moving facilities closer to the customer, automotive manufactures developed just-in-time delivery, while the consumer industry achieves supply chain efficiencies through demand driven networking.

Understanding the market and developing the appropriate supply chain best practices increases stability at the same time it decreases risk and associated costs. Increasingly business is looking for “leaner” efficiencies outside of the expected manufacturing environment. The entire business structure is under review, specifically interactions with customers and suppliers, in short the supply chain.

The integrated supply chain process is an effective strategy that can greatly help the organizations in maintaining the supplier relationship with the organization. This has been done by improving the internal process of the ...