Re-positioning the supplier: an SME perspective

Abstract

As manufactured products become more complex, their design and manufacturing demands more and more resource which is being increasingly sbared between the supply/value cbain members. Competition is being typified less by firm versus firm and more by supply chain versus supply chain. The final assemblers are simplifying their supply chain to reduce logistics complexity and provide best value to the final customer. To suppliers, particularly SM Es, this gives rise to both opportunities for increasing 'added value', as well as threats of being dropped from rationalized supplier bases. Historically, SMEs have been sandwiched between large customers and suppliers and have always reacted to their superior bargaining power. Now, if the SMEs want to survive and grow, they have to adopt a more proactive stance to re-position themselves in response to these supply chain trends. In this paper, we present a technique for re-positioning the supplier in terms of 'physical value added' and competency/practice-based 'differentiation'. We use the proposed approach to see how one supplier has successfully changed his business and another has developed plans to change, in line with the trends in their industry structure.

The use of electronic data interchange for supply chain coordination in the food industry

“…When information flows seamlessly in both directions, the effect is to create a virtual supply chain. Information transfer is used, in effect, to integrate the entire value chain into one longer chain (Shapiro et al, 1993;Rayport and Sviokla, 1995;Bhattacharya et al, 1995;Towill, 1997). In the context of SCM, the term integration relates to how closely, particularly at their interfaces, supply chain entities operate as a single unit.…”

A structured procedure for materials planning during production transfer

“…A large company with a strong position in a production network can dictate and control how the relocation process is handled. Small and medium sized (SME) companies are in a weaker bargaining position towards their suppliers because of their size (Bhattacharya, Coleman, and Brace 1995), and therefore cannot influence the production transfer process in the same way. Furthermore, SMEs, in most cases, have less developed routines and planning systems, which could impact their procedures for materials planning during a production transfer (Löfving 2009).…”

Supply chain success: key initiatives differentiating high- and low-performing firms

“…External pressures include such forces as advances in technology and increased customer demand across national borders (Fawcett et al, 2009;Mehta, 2004); maintaining lower costs while meeting these diverse needs (Cook and Garver, 2002); and intensified competition utilising relationships among vertically aligned firms (Togar and Ramaswami, 2004). These pressures have begun shifting the focus of individual firms vying for market presence and power to supply chains competing against supply chains (Bhattacharya et al, 1995). Today's dynamic environment and the existence of numerous driving forces suggest the following proposition:…”