M&S can deliver the following benefits through implementation of SCM:
- Reduced Costs
- Increased Efficiency
- Minimize Price Volatility
- Consolidation of the Supply Chain
- Continual improvement of operations
Reduced Costs are achieved through management of relationship with core suppliers and implementation of supplier relationship programs for segmentation and qualification with performance evaluation matrixes in place. Identification of core and strategic suppliers enable organizations to build long term mutually beneficial relationship and to work together towards elimination non-adding value activities to minimize costs.
Increased Efficiency is achieved through proper communication plans to develop complete understanding to meet the needs effectively and with no delays.
Minimizing price variation is achieved through implementation of supplier relationship management tools and promoting flat pricing policy for prolonged contract terms.
Consolidation of the supply chain allows parties to better (i) comprehend the way of doing things, (ii) align their practices to lead to further efficiencies and operational advantages and (iii) reduce the number of suppliers to ease their management.
Continual improvement of operations– targeted for long-term relationship shall pass the testing on certain criteria readiness of the supplier to perform. The following methods to support the Supplier Relationship Management: