Supplier Relationship Management

1. Supplier Relationship Management in the Context of Supply Chain Management Keely L. Croxton, Ph.D. Asst. Professor of Logistics The Ohio State University

3. Integrating Key Business Processes Supply Chain Management Processes Source: Adapted from Douglas M. Lambert, Martha C. Cooper and Janus D. Pagh, "Supply Chain Management: Implementation Issues and Research Opportunities,” The International Journal of Logistics Management , Vol. 9, No. 2 (1998), p. 2. Tier 1 Supplier Tier 2 Supplier Logistics Purchasing Marketing R&D Customer Consumer/ End-Customer PRODUCT FLOW Production Finance Manufacturer Information Flow CUSTOMER RELATIONSHIP MANAGEMENT CUSTOMER SERVICE MANAGEMENT DEMAND MANAGEMENT ORDER FULFILLMENT MANUFACTURING FLOW MANAGEMENT SUPPLIER RELATIONSHIP MANAGEMENT PRODUCT DEVELOPMENT AND COMMERCIALIZATION RETURNS MANAGEMENT

6. Types of Inter-Company Business Process Links n 2 3 1 2 1 1 n 2 1 3 n 2 1 3 1 n 2 n 1 2 n 1 Consumers/End-customers n Tier 3 to n suppliers Initial Suppliers Tier 1 Customers Tier 2 Customers Tier 3 to Consumers/ End-customers Tier 2 Suppliers Tier 1 Suppliers Tier 3 to Initial suppliers n 1 n 1 n Members of the Focal Company’s Supply Chain Focal Company Non-members of the Focal Company’s Supply Chain Managed Process Links Not-Managed Process Links Non-Member Process Links Monitor Process Links Tier 3 to n customers 1 n Source: Douglas M. Lambert, Martha C. Cooper, and Janus D. Pagh, “Supply Chain Management: Implementation Issues and Research Opportunities,” The International Journal of Logistics Management , Vol. 9, No. 2, 1998, p. 7.

7. Supplier Relationship Management Strategic Sub-Processes Process Interfaces Operational Sub-Processes Customer Relationship Management Customer Service Management Demand Management Order Fulfillment Manufacturing Flow Management Product Development & Commercialization Returns Management Source: Keely L. Croxton, Sebasti á n J. García-Dastugue, Douglas M. Lambert, and Dale S. Rogers, “The Supply Chain Management Processes,” The International Journal of Logistics Management, Vol. 12, No. 2, 2001, p. 25. Review Corporate, Manufacturing and Sourcing Strategies Differentiate Suppliers Identify Criteria for Categorizing Suppliers Provide Guidelines for the Degree of Customization in the Product/Service Agreement Develop Framework of Metrics Develop Guidelines for Sharing Process Improvement Benefits with Suppliers Prepare the Supplier/Segment Management Team Internally Review the Supplier/ Supplier Segment Identify Opportunities with the Suppliers Develop Product/Service Agreement and Communication Plan Measure Performance and Generate Supplier Cost/Profitability Reports Implement the Product/Service Agreement

8. Customer Relationship Management Strategic Sub-Processes Process Interfaces Operational Sub-Processes Customer Service Management Demand Management Order Fulfillment Manufacturing Flow Management Supplier Relationship Management Product Development & Commercialization Returns Management Review Corporate and Marketing Strategy Identify Criteria for Categorizing Customers Provide Guidelines for the Degree of Differentiation in the Product/Service Agreement Differentiate Customers Internally Review the Accounts Develop the Product/Service Agreement Measure Performance and Generate Profitability Reports Source: Keely L. Croxton, Sebasti á n J. García-Dastugue, Douglas M. Lambert, and Dale S. Rogers, “The Supply Chain Management Processes,” The International Journal of Logistics Management, Vol. 12, No. 2, 2001, p. 15. Develop Guidelines for Sharing Process Improvement Benefits with Customers Develop Framework for Metrics Prepare the Account/Segment Management Team Identify Opportunities with the Accounts Implement the Product/service Agreement

9. Types of Relationships © The Global Supply Chain Forum, 2000 Arm’s Length Type I Partnerships Joint Ventures Vertical Integration Type III Type II

11. The Partnership Model © The Global Supply Chain Forum, 2000 Drivers Compelling reasons to partner Facilitators Supportive environmental factors that enhance partnership growth Components Joint activities and processes that build and sustain the partnership Outcomes The extent to which performance meets expectations Feedback to: Decision to create or adjust relationship l l l Components Drivers Facilitators Drivers set expectations of outcomes