Supplier Relations - Research Paper Example

Generally, a good supplier relation can be described as one in which the company does not keep itself apart from the suppliers (Lautenbacher and Stidham, 2009). Research has actually showed that there exist several companies who only contact their suppliers when they are running out of stock. Even among such companies, the only kind of communication that goes on has to do with quantities of goods needed and the periods the goods are needed. These companies totally fail to see their suppliers as an integral part of their business and so see no need to keep the suppliers informed about the day to day feedback on the supplies they do and the impact of the supplies on the company.

For excellent supplier relationship to take place, suppliers must be aware of the daily needs of the companies in terms of demand for products and services. Suppliers also need constant feedback from companies regarding reactions from customers. This is an important move in ensuring that suppliers supply to the specifications of customers and that products supplied are always on high demand by customers so that they do not remain in the inventories for long (Kelton, et al, 2002). Aspects of Boeing's supplier relations program that specifically address reducing inventories For Boeing as an international company, there are several relations programs that it has in place to specifically address the issue of reducing inventories, maintaining quality, regulating compliance and promoting competitiveness.

In order to ensure that safety stocks are adjusted downwards and that there is improvement in quality, Boeing ensures that the leading times for supply are reduced to the barest minimum (Arrand, 2007). It would be noted that suppliers have their own lead times whiles customers also have their. But it is the lead time of customer that is paramount because it is the customer that the company makes profits from. There is constant relationship with the supplier to ensure that they reduce their lead times according to the lead time of customers.

This helps in reducing inventory in the sense that it leads to a reduction in the amount of time needed to hold stock together (Fofie, 2001). Another important component of ensuring that suppliers are admonished to reduce their lead times is that when the lead times are reduced, it creates enough room for top-up orders to be made in the season when adequate time has been given to measure real demand. Consequently, all forms of rush in the supply of inventory are avoided and so suppliers can take their time to supply quality products.

Another important program in place by Boeing has to do with the fact that the company has special terms of conditions as part of its relationship program whereby suppliers must prove beyond reasonable doubt that they can be trusted for reliability of supply before their services are engaged. This is an important program for ensuring reduced inventory and quality of supplies made because it ensures that the need to hold safety stocks is avoided. Meanwhile, the practice of holding safety stocks is one of the major causes of increased inventory.

When companies cannot trust the reliability of supply, there are often forced to hold safety stocks that may not necessarily meet the demand of customers. As soon as new stocks come in, they are forced to offload those stocks through cheap sales, rendering the finances of the company handicapped. Boeing therefore avoids this by ensuring that there is strict regulatory