Munson et al 1999

Munson et al 1999 - 11 The Use and Abuse of Power in Supply Chains Click to edit Master subtitle style 22 Background This article examines the

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Click to edit Master subtitle style The Use and Abuse of Power in  Supply Chains Sept 13, 2010 11
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background This article examines the  power tactics  between supply chain members  and further explores the retaliatory actions taken in response by the  abused chain members. The relationship between supply chain members is not always  symmetrical. In a supply chain, companies try to  exercise power  in five main areas: Pricing control I nventory control and JIT, O perations control, C hannel structure control,  I nformation control Facing the pressure, the smaller supply chain members can either comply  or retaliate. 22
Background image of page 2
Pricing Control Large companies, using power derived from market centrality and  dominance,  demand lower prices or quantity discounts  from their  suppliers. Ex. Wal-Mart, a notorious “hardball” negotiator.  Suppliers cannot afford  to not sell to the massive customer base. Manufacturers may print prices directly onto the label of the  products to control the perceived quality. Ex. Books, snacks, and greeting cards 33
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Inventory Control and JIT Depending on the relative power of companies, the manufacturer  could demand Just in Time (JIT) delivery, or it may have to pay a  surcharge to receive it. Ex. Rainbird Inc. pays Connor Formed Metal an additional $.02 cents per  unit for JIT delivery of springs. However, this can also have the effect of heightening the companies  dependence on specific suppliers.  By switching to JIT, the suppliers  become irreplaceable, as a disruption in deliveries would be disastrous to  the manufacturer.  This creates an obvious power shift to the suppliers.
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/02/2011 for the course MGSC 487 taught by Professor Jayaram during the Spring '10 term at South Carolina.

Page1 / 15

Munson et al 1999 - 11 The Use and Abuse of Power in Supply Chains Click to edit Master subtitle style 22 Background This article examines the

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online