LOGISTICS

Logistics Manage Suppliers

[Writer's institute]

Logistics Manage Suppliers

Introduction

The sole purpose of a business is to generate profits so that the shareholders' wealth can be maximized. In order to stay productive, the management has to effectively manage all the resources of an organization. It has to maintain good relationships with all of its stakeholders that mainly include suppliers, customers, shareholders and employees. The relationship with suppliers has to be maintained with good terms and conditions as they are the backbone for a company's production department (Briers, 1999, 2). The quality of the finished goods entirely depends upon the quality of the raw material that is provided by the suppliers. The organization has to keep a constant check over the supplies so that defective material could be extracted out from the line. The organization has to make sure that the suppliers are meeting their goals. Most of the organizations have placed a metrics system to evaluate the performance of the suppliers.

Discussion

One of the most important things for a company is to treat each and every supplier as a partner and embrace them for what they are. If the organization succeeds in pursuing a mutually beneficial relationship, the quality and price of the supplies will definitely be affected. The relationship between the company and its suppliers should not be of combating sort. Many companies try to keep their feet on their necks so that price could be negotiated. This is a short-sighted vision of the company, which can break long-term partnerships. The management has to take steps in order to assure a working relationship with all the suppliers of the company but it also has to a keep a check over the performance by establishing a performance indicating system (Brown, 2010). In our organization, there are key performance indicators that provide an overall view of the performance of the suppliers. All the methods of evaluation are discussed below:

Performance indicators

The organization establishes relationship with the supplier and indicates certain criteria that a supplier should meet in order to qualify for the trusted suppliers list. There are defined characteristics that the suppliers should possess. The evaluation is conducted on regular basis. Some of the suppliers are evaluated on monthly basis and others are evaluated annually. Each supplier is evaluated through some considerations that may include the history of complaints, types of certifications acquired by the supplier, quality management system implemented within their operational activities and size of the organization. The supplier should fulfil all the requirements of the organization otherwise it becomes difficult for the organization to include the supplier in its supply chain.

Supplier classification

The organization has a number of suppliers, which makes it important to evaluate them through a survey. The company has established 2 levels of suppliers according to the number of organizational needs they cater. The classification is done by the management as it sought each supplier in the group by analyzing how crucial they are for the company. They are divided on a scale that contains the critical and non-critical section according to ...