Supplier Relationships (L4M6)

Module purpose
On completion of this module, learners will be able to analyse the dynamics of supplier relationships, examine the processes and procedures for working with stakeholders and appreciate the concept of partnering.

Module aim(s)
In any organisation, a significant element of the procurement and supply function is based around decisions to source activity from external suppliers. Once agreements have been established the relationship established with the supplier is paramount to overall success. At its highest level outsourcing can take the form of a partnership or joint venture. This module is designed for those who have responsibility for maintaining and managing relationships with stakeholders and suppliers and for those who may be faced with establishing anddeveloping formal partnerships.

Next steps
Joining a CIPS qualification programme means you will join the largest Institute in the world for those working in procurement and supply. You can join as a member online today. Once you've become a CIPS member you can book your examinations online.

    Learning outcomes

    1.0  Understand the dynamics of relationships in supply chains

    1.1  Differentiate between different types of commercial relationships in supply chains

    • Internal and external relationships
    • The relationship spectrum
    • The relationship life cycle

    1.2  Appraise portfolio analysis techniques to assess relationships in supply chains

    • Matrices to identify supply, supplier and purchaser positioning
    • Developing action plans

    1.3  Identify the competitive forces that impact on relationships in supply chains

    • Sources of competitive advantage
    • Competitive forces: sources of competitive rivalry, bargaining power of buyers and suppliers, threat of new entrants and potential substitutes
    • STEEPLE factors that impact on supply chains (social, technological, economic, environmental, political, legislative and ethical)

    1.4  Compare the sources of added value that can be achieved through supply chain relationships

    • The link between relationships as a process and the achievement of added value outcomes
    • Sources of added value: pricing and cost management, improving quality, timescales, quantities and place considerations in procurements from external suppliers
    • The link between organisations in supply networks

    2.0  Understand processes and procedures for successful working with stakeholders

    2.1  Analyse the purpose of organisational procedures and processes in sourcing goods and/or services

    • Achieving value for money
    • Supplier identification, assessment and selection
    • Selection and awarding criteria

    2.2  Compare team management techniques to ensure positive stakeholder relationships

    • Positive relationships through positive contributions
    • Overcome resistance
    • Identify conflict and coping processes
    • Cross-organisational teams
    • Stages of team development – forming, storming, norming, performing

    2.3  Compare the practical considerations of stakeholder management

    • Accurate cost modelling
    • Reduced impact of price fluctuations
    • Early supplier involvement in product and/or service development
    • Knowledge transfer and access to innovation
    • Common metrics to drive change for both organisations
    • Improve risk management and continuity of supply

    2.4  Identify the processes for terminating stakeholder relationships

    • Reasons for termination
    • The process of termination
    • Timing
    • Relationship impacts – amicable vs. hostile
    • Legal considerations – finances, confidentiality, IPR, security, employee rights
    • Succession issues – continuity of supplies

    3.0  Understand the concept of partnering

    3.1  Analyse the concept of partnering and where it is a suitable approach

    • The three types of partnering
    • Partnering vs. ‘traditional’ contracting agreement
    • The drivers for partnership sourcing
    • Advantages for purchaser and supplier•
    • High spend
    • High risk
    • Technically complicated supplies
    • New services
    • Fast-changing technology
    • Restricted markets

    3.2  Appraise the process of partnership implementation

    • Identify items potentially suitable for partnership sourcing
    • ‘Sell’ the philosophy to senior management and other functions of the organisation
    • Define the standards that potential partners will be expected to meet
    • Establish joint commitment to the partnership
    • Reviews and audits

    3.3  Identify the reasons why partnerships fail

    • Poor communication
    • Lack of senior management support and trust
    • Lack of commitment by one or both parties
    • Poor planning
    • Lack of value-added benefit
    • Changes in the market
    • Corporate cultural differences
    • Logistics and distance barriers

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