Page 112 - BA1 Integrated Workbook STUDENT 2018

Chapter 11

Upstream supply chain management

Upstream supply chain management involves the activities that the
organisation undertakes to manage its relationships with its chain of
suppliers.

2.1 Managing supplier relationships

There are a number of general issues that an organisation needs to consider in
relation to its suppliers.

 Sources – what suppliers are available and are they larger or smaller than us?

 Number of suppliers – a single supplier may give bulk-buy discounts, but can
make the business over-reliant on the supplier.

 Cost, quality and speed of delivery – these factors are closely related and
compromises may be needed between these factors.

 Make or buy/outsourcing – is it in the organisation’s best interests to
outsource internal functions to third parties?

 Antagonism or partnership – how should the organisation manage its
relationship with its suppliers?

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