WACC OF TQM

BUYER-SUPPLIER REALTIONSHIP

Submitted by:

Muhammad Atif ID# 08108032 BBA (A)

Fall 08

Submitted to:

Mr. Nadeem Akhtar

GIFT University Gujranwala

Characterize the different types of Buyer-Supplier Relationships described in the Case.

When we talk about the buyer and supplier relationship there are many ways to establish a relationship between buyer and supplier. But According to this case there are different types of relationship according to the nature of the industry or a specific business. In this case study they are talking about the arms length, partnership, a joint venture etc these the major types of a buyer and supplier relationship. Arms length is the most used relationship in the manufacturing side referred to this case this relationship implies the lowest level of implication and the transactions being placed for a long period of time between two companies exchanging standards products or services in standers terms and conditions while on the other hand the partnership is the modified business relations between buyer and supplier based on mutual trust, openness, shared risk, and shares rewards that leads to competitive advantage.

How and why do they differ from each other? Every business has different type of buyer and suppliers means this buyer and the suppliers relation depend upon the nature of the business like manufacturing business or service sector so there are some companies mentioned in the case having different type of buyer and suppliers relationships so the reason is that; this is only because of the nature of the business like Toyota etc manufacturing side and the Hollywood side mentioned in the case different type of business so when they are different in nature obviously this is understood that they have different type of relations among buyer and supplier.

Which type do you think is the best approach to buyer-supplier relationships? After analyzing this case study I have concluded that the best approach to buyer supplier relationship is the keiretsu model because according to this the relationship between buyer and

supplier needs a continues feedback and suggestions for improvements furthermore, The model was said to be a pre-requisite to competitive survival in the twenty-first century. Various versions of it have been developed, though all of them share two essential characteristics in common. First, they incorporate long-term, co-operative partnership relationships between buyers and suppliers, with high levels of interaction between firms. This is said to deliver superior performance in terms of cost, quality and speed in daily interactions and in new product development. So this was the best practice of buyer and supplier relationship presented in the case.

In which direction do you expect supplier-buyer relations should move in the future? An increased emphasis on supply chain management an increased use of online communications and purchasing increasing outsourcing in manufacturing increased outsourcing in the service sector and profit pressure on major firms Increased emphasis on supply chain management with its focus on providing complete information through every step in the supply and distribution chain. So according to this trend this relationship is expected to grow widely in the future and will become the more competitive. This competitiveness will show that how buyers are best able to maximize their ability to appropriate value rather than on how suppliers can achieve this. This does not mean that buyers must always seek to take advantage of suppliers. On the opposing, there will always be conditions when the best deal a buyer can achieve will involve working closely with a supplier and sharing the benefits of such teamwork. So this may go to happen in the coming days.