Lean Supplier Management for Better Cost Structures

Abstract

Now-a-days the supplier management has got very important role to play in making the products and services being offered to be more competitive. This is evident as the most of the manufacturers are increasingly depending upon the suppliers to focus on the core competencies as well as to derive the sustainable competitive advantages. However, while the manufacturers are becoming increasingly less vertically integrated, the control over the total cost of ownership appears to be lost. In one sense, it may be true where the supply chains are run merely transactional based without becoming the relationship centric. Along the lines of relationship centric supply chains, the concept of Preferred Supplier Status (PSS) can support the manufacturers to have great control over the cost structures quoted by their suppliers over a period of time. It was observed that because of PSS, the suppliers can have better learning curves to offer the product and services at competitive costs.