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5. Build long-term supplier relationshipsDeveloping long-term relationships with suppliers creates a mutually beneficial partnership.Better quality products and price reductions are the principal advantages of strong relationships and longer term contracts. Open communication between buyer and supplier can also lead to more tailored services.6. Explore outsourcing some purchasingIt’s important that companies recognize their core purchasing competencies.They may be effective at acquiring supplies they commonly use. But if a special projectcalls for unfamiliar products, it can be helpful to seek the advice of a purchasing consultant that specializes in the product in question.7. Understand your inventory carrying costsCompanies should have an accurate breakdown of what it costs to store goods and work to reduce inventory to minimize cost and waste.Communicating a company’s forecaster needs to suppliers will help with on-time delivery and minimize the need for storage.8. Base supply chain management on real-time demandPurchasing is just one element in your supply chain. Adopting efficient purchasing methods, coupled with lean manufacturing and delivery processes, can help reduce customer lead time.Page 12 of 13
JUNMING LI VTI18217 Assessment Task 3 of BSBMGT517.9. Negotiate constantlyEven if a company is satisfied with its suppliers, it’s important to review and negotiate agreements regularly. Performing an annual review of all suppliers is a good idea.Your sincerely,Mr Junming LiManagement TeamPage 13 of 13