- Combining various business units product purchases/different line items giving volume leverage.
- Cumulative buying with successive purchases throughout the year for volume discounts.
- JIT purchases/delivery
Stockless Purchasing.
- Contracts for a given volume of purchases over specified period of time.
- Supplier provides product to individual plant locations.
- The plant does not carry the inventory of purchased inventory.
- Best suited for frequently purchased items of low purchase value.
Integrated Supply.
Purchase combines all similar line of items under one supplier, increasing purchasing leverage and lowering costs (lab supplies/office supplies/small tools/standard electrical components)
Managing Supplier Relations.
- Establishing long term supplier relationships are critical to any organisation.
- Suppliers can directly impact the financial performance and profitability of a buying enterprise, as they influence product development costs, inventory levels, manufacturing schedules and the timeliness of delivery of goods and services.
- Many leading companies have realised that it is worthwhile investing to make sure these relationships are managed effectively and efficiently.
