But at the end, arent businesses just businesses? I'm sure that if they needed to raise the price, they wouldnt conside the relationship you've had. It would impact the % (maybe) but maybe they dont have an option.
Barbara, There are various schools of ideas on inventory. Some accounting experts believe it shouldn't even be on the assets side of the balance sheet. Inventory isn't really money until it's sold and some of it gets written off when not sold.That's why it can be a burden on a company rather than an asset.
Good comparison. I never thought of inventory in quite that way. But balance and spreading the risk are good practices no matter what your investment is. Sometimes it feels that we have as little control over the industry supply/dmand cycles as wel do over the stock market. Good advice.
Most of the questions asked have no simple answer, but purchasing and product managers can't afford not to explore them. In some cases it will require committing resources--implementing QA, incoming inspection and so forth.
I think not, although in some industries, I can see where they need that diversification but for most, I don't think so.
Sometimes inefficiencies have to be deliberately tolerated. In case a supplier offering goods at half the price goes into bankruptcy, then what. Renegotiating with the old suppliers may be a mess. They might not cooperate as they did before. They might offer discriminatory prices when they know you need them desperately. As in the case of customers where relationship management is taught like religion, in supply chain management, same rule applies. You have to maintain relations with various suppliers as well.
I dont think there is any industry where diversification is not required. Its a minimization of risk strategy at the cost of profit maximization high-risk strategy.
Do you think companies think about supplies the same way they do with stocks,etc?
For stocks, etc: the higher the profit, you'd expect, higher risks... if you apply that to suppliers, the cheaper supplier, probably has the higher risk but that's not always the case.
Also, do you think that if you had 4 suppliers, one selling it a half the price, the company is going to buy part of it with the more expensive one? I think not, although in some industries, I can see where they need that diversification but for most, I don't think so.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.