The other supply chain -- KPIs can comprise of vendor performance, obsolescence, and items available but which is not being used, supplier pricing and much more. Supplier Relationship Management -- SRM: This is the new brand concept of developing and handling long-term relations with the suppliers of specialist equipments and replacement parts. In case of asset-intensive industries, several suppliers have an almost exclusive position due to the uniqueness of their replacement parts.
Vendor-managed Inventory --VMI: In cases where the raw material inventory is owned by the suppliers till it is needed, comprises a strategy which lowers the inventory and administrative costs, while fulfilling the demand for components and equipments. Outsourced asset management and maintenance: It follows the pattern for the execution of non-core businesses. In the case of asset-intensive companies, the broad infrastructure and deep knowledge base needed to deal with some strategic assets can well be beyond their capacity. Collaborative commerce and Internet-enabled collaboration within enterprises presently supports remote asset monitoring and proactive maintenance services. Advanced EAM solutions have the potential to support this business model by giving the potential to share the needed real-time information in and out of the business. (Proven, controversial, and new approaches are part of an effective asset management program)
Planning for significant purchases is a processes concentrating on the management of a particular purchase. It might entail planning for a one-time purchase of a good or service which is crucial or it might entail planning for a group of goods and services which are recognized as vital. Planning for significant purchases helps in the following manner (i) identifies the optimum manner to approach the procurement of goods or services by means of information gathering and analysis (ii) finds out the risk connected with the purchase of goods or services early so that these can be managed and (iii) finds out the ways of achieving the objectives defined for the purchase, keeping in line with the department's/agency's Corporate Procurement Plan. (Planning for Significant Purchases)
As a constituent of the corporate procurement planning process the total of a department's/agency's purchases are found out and the total expenditure on individual or collection of goods and services is also being found out. In case of every good/service or group of goods/services, its extent of problems of securing supply is required to be found out. The goods and services which are purchased in any of the high relative expenditure or difficult to secure supply categories are regarded as important purchases. In case the goods and services are important to a department/agency depends on (i) the significance of the good or service to the department's / agency's operations (ii) the possibility of supply failure; and (iii) the influence of supply failure. Risk exposes in terms of the purchase or particular types of goods emerge from four sources. These are (i) purchaser organization inclusive of criticality of the purchase to its operations or standing. (ii) The product or service (iii) the supplier; and/or (iv) the market. (Planning for Significant Purchases)
Industry Examples:
IBM holds that companies must do business with various suppliers, not much for the greater part for social reasons, but since it makes good business proposition, according to the head of IBM's supplier diversity program. It is expected that IBM will spend roughly $2 billion with various suppliers in the year 2005 out of which 60% would be ethnically owned and 34% which are being owned by women. IBM has about 300 diverse suppliers in the U.S.A. It is crucial to possess diverse suppliers, in the opinion of Theo Fletcher who is the Vice President of the Security, Compliance and diversity of IBM's Integrated Supply Chain Group....
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