INTR SUPPLY CHAIN: Chapter 7

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Supplier Relationship Management (SRM)

The process of strategically planning for and managing all interactions with third-party organizations to maximize value.

Transactional Perspective

A tactical approach to supplier management focused primarily on short-term price and competitive bidding.

Strategic Perspective

A long-term approach to supplier management focused on partnership, mutual commitment, and trust.

10 Keys to Successful Partnerships

Includes building trust, shared vision, personal relationships, mutual benefits, top management commitment, managing change, communication, understanding capabilities, continuous improvement, and performance measurement .

Trust

The foundation of partnerships; earned over time, easily lost, and nearly impossible to regain .

Shared Vision & Objectives

Partners move beyond tactical issues to mutually agreeable goals that grow both businesses .

S.M.A.R.T. Objectives

Performance metrics that are Specific, Measurable, Achievable, Relevant, and Time-oriented.

Total Cost of Ownership (TCO)

All costs associated with the acquisition, use, and maintenance of a good or service.

Supplier Evaluation

A data-driven process to identify reliable suppliers based on facts and defined criteria rather than perception .

Weighted-Criteria Evaluation

A system where different performance dimensions are assigned weights, rated (0-100), and summed for an overall score .

Supplier Certification

A qualification process ensuring a supplier can provide high-quality material requiring little to no incoming inspection.

ISO 9000

A series of management and quality standards focused on design, development, production, and service .

ISO 14000

A family of international standards specifically for environmental management .

Supplier Development

Technical, business, or financial assistance provided by a buyer to improve a supplier's performance and capabilities .

Early Supplier Involvement (ESI)

Involving key suppliers in internal operations, specifically new product and process design.

Value Engineering

Activities that help reduce cost and improve quality starting from the initial design phase.

Supplier Recognition Program

A program designed to reward and motivate suppliers who achieve or exceed high performance standards .

SRM System Characteristics

Five key traits: Automation, Integration, Visibility, Collaboration, and Optimization .

EDI (Electronic Data Interchange)

Technology used for automated transmissions of POs, delivery forecasts (DELFOR), and advanced shipping notifications (ASN) .

OTIF

On Time In Full; a key metric for measuring delivery performance.