1. If a company is effectively focusing on its
core competencies, its level of outsourcing is likely to increase.
order to maintain a shared vision, the buyer alone should establish the
objectives of the partnership, which must then be fulfilled by the actions of
relationships are not necessarily relevant to supplier relationships.
supplier relationships involve equal decision-making control.
development of relationships with suppliers brings about changes that must be
managed in order for a company to stay focused on their core businesses.
supplier performance can help companies identify supplier strengths and
weaknesses and improve supplier communication.
broad based performance metric, which is defined as “all costs associated
with the acquisition, use, and maintenance of a good or service,” is
referred to as TCO, which stands for total cost of ownership.
evaluating a supplier it is not possible to create performance metrics that
measure delivery speed, quality related outcomes, environmental responsibility,
and costs related to inventory.
a TCO system, certification and training of suppliers would be considered
a TCO system, the costs associated with defective products, including repair
and warranty costs would be considered post-transaction costs.