Evaluation of Suppliers
Finding good suppliers to partner with is important to business success in the 21st century. This has led to the evolution of the business process known as supply chain management (SCM).
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History
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Purchases from suppliers were considered a clerical process in the 1960s, according to the NC State overview "An Analysis of Supplier Evaluation." Later, this changed as companies realized the benefits of partnering with suppliers to deliver better value to end customers.
Evaluation Process
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"Exceptional supplier performance relies heavily on communication and cooperation between buyers and suppliers over an extended period of time," according to the NC State overview. Along with price, stable lead times, responsiveness and technical capabilities are keys to selecting good suppliers.
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Benefits
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Business success and growth are dependent on successful establishment of partnerships with key suppliers, according to the Encyclopedia of Business (2nd ed.). Companies look to establish strong, affordable and quality buying relationships with a reasonable number of key suppliers as part of optimizing business management.
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