Supplier Relationship Essay

1608 Words7 Pages
To resolve these issues, many companies are trying to find tools for implementing best logistic management practices. Research has been conducted on the buyer-supplier relationships in logistics.
This research will contribute by presenting a study between Strategic buyer-supplier relationship and logistics and supply chain performance.

Buyer-supplier relationships impact on firms can be seen from both operational and strategic perspectives (Carr & Pearson, 1999; Lambert & Cooper, 2000). Operational perspective primarily emphasizes the impact on quality and service delivery, and/ or costs. While strategic perspective emphasize on sustainable continuous improvements.

In terms of buyer-supplier performance, Lemke, Goffin & Szwejczewski (2003,
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Compared with the traditional adversarial system, the cooperative buyer-supplier relationship encourages more advanced management and production systems (such as TQM and JIT) and foresees a more extended cooperative interaction in product design and technological development between buyer and supplier. The incentive to develop such interaction arises in the context of the "operations" and can form the basis for medium- to long-term contracts. Thus, buyer-supplier relationships change from prevalently commercial transactions based on price to a cooperative relationship based on intersecting the respective domains of buyer supplier strategic…show more content…
The idea of strategic buyer-supplier relationships has gained significant momentum and supply chain partners work together to mutually plan and execute strategic initiatives aimed at achieving customer service satisfaction level (Mohr and Spekman 1994).
Strategic buyer-supplier relationships focus on initiatives that improve interpersonal appearances between the supply chain members and create a win-win situation for both buyer and supplier firms (Paulraj and
Chen 2005). Instead of using the old-style, arms-length, adversarial mode of conducting business with a large number of suppliers, companies are emphasizing in working closely and co-operatively with a limited number of trustworthy suppliers. Nowadays supplier contracts are becoming long term and suppliers are sharing sensitive information about their quality performance, processes and costs to the buyer. It is suggested that a companies would gain benefits by placing a larger volume of business with fewer suppliers using long-term contracts (Hahn, Pinto and Brag 1983; Giunipero, Handfield and Eltantawy
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