Question

Companies must be agile and flexible to change quickly and meet customers’ needs more timely. As a result, companies must develop strong relationships with their suppliers. Explain why and how working closely with suppliers make companies more flexible and agile meeting customers’ needs.

Answer 1

In the world of competition, there is always a challenge to maintain the customer base and ensure their loyalty towards the Company which can in turn help is assuring a stability and survival of the overall business. In this regard, it is very true that Companies must be agile and flexible to change quickly and meet customer’s needs more timely. One of the most significant way of doing this is by maintaining good relations not only with the customers but also with the Suppliers so that the demands of the customers are fulfilled on time.

In order to do the same, following steps could be undertaken along with the reasoning as to how these steps to help the Companies be agile and flexible to change quickly:

Addition of newer supplier base: To ensure more variety of products available for further sales, it is essential that apart from maintaining relations with the old suppliers, Companies extend their horizons to tap the newer ones. Also, it shall help to safeguard the Companies against the shortage of stock with the older suppliers or to meet with the sudden demand of more stocks from the newer suppliers.

Tapping the demand: The demand analysis is essential to ensure what is the demand opportunity of the products that is availed from the local supplier and what could be the possible demand of the products, if availed from the distant supplier. If the demand can be met by the local supplier itself, then there may not be a need to cater to a distant supplier to supply our product, which may otherwise usually come with a higher transportation and handling cost. In this way, flexibility is managed with customer’s demand getting fulfilled with the help of relationship with different types of Suppliers.

Quality and variety of the products: If the distant supplier can supply a better quality of product with more range of variety available, then the same could be chosen otherwise if the same is fulfilled by the local supplier, then the Companies could resort to such a supplier accordingly. This shall be helpful in offering a wider range of products to the customers and thereby a way to maintain the customer base stuck to the Companies.

Availability of the raw materials for production from the Suppliers: Based on the demands of the customers, if the suppliers are so chosen that can ensure the availability of raw materials even with the sudden surge in demand, then it becomes highly beneficial to satisfy the customers and offer them with what they need on time and hence to establish such a scenario, it is also necessary that the relationships with the Suppliers are maintained as well.