Supply Base Management Process | GEP (2024)

FAQs

What is the supply base management process? ›

The supply base management process is a comprehensive system of managing the suppliers of a particular business. It involves a 360-degree approach that includes evaluating existing suppliers, eliminating poor performers, and adding new suppliers.

Supplier management is a structured program to manage suppliers and improve their impact on the buyer's business. It includes managing vendor deliverables, working collaboratively to co-develop new processes, managing compliance as well as payment of invoices.

Supply management is the act of identifying, acquiring, and managing resources and suppliers that are essential to the operations of an organization. It includes the purchase of physical goods, information, services, and any other necessary resources that enable a company to continue operating and growing.

By managing the supply chain, companies can cut excess costs and deliver products to the consumer faster and more efficiently. Good supply chain management can help prevent expensive product recalls and lawsuits as well as bad publicity.

For example, in a supply base of an auto manufacturer, a plastic molding company may supply plastic parts (e.g., interior parts) to a metal parts manufacturer, and this manufacturer can simultaneously supply metal parts (e.g., connectors) to the same plastic molding company.

The first step in the supplier management process is to select the supplier. When precision in the final product is not important, the supply manager is most likely to use simple specifications in the procurement of the product.

Supplier Relationship Management Examples

For example, if the company makes cars, a tire manufacturer provides finished tires to be installed in those cars. They may also engage with a material supplier that provides the aluminum for a part that the auto company must forge into making their car.

Most supplier management activities, including selecting and hiring suppliers, onboarding those suppliers, managing and enforcing contracts, administering payments, handling terminations and more.

What are the 5 supply chain management processes? ›

The Top-level of this model has five different processes which are also known as components of Supply Chain Management – Plan, Source, Make, Deliver and Return.

A systematic and analytical approach for identifying the proper mix of suppliers in a specific spend category.

... The supply base is "the portion of a supply network that is actively managed by a buying company" (Choi and Krause, 2006, p. 637). A smaller, more manageable supply base may benefit small buying firms (Choi and Krause, 2006) . A smaller base can reduce transaction costs and increase responsiveness. ...

The term “supplier base” is most commonly used in the business world to refer to a group of companies who provide a company with all necessary materials, components and services for production. A supplier base is an important component of a company's ability to produce its products on time and within budget.

The Top-level of this model has five different processes which are also known as components of Supply Chain Management – Plan, Source, Make, Deliver and Return.

1. Planning. Every organization needs to manage the resources they have to get the optimal level of benefit from them. The planning process helps to determine the customer demand and the supply sources required for fulfilling the request.

There are 3 stages of supply chain management and corresponding custom supply chain solutions, which drive customer satisfaction and business growth. These levels are: Strategic SCM. Tactical SCM. Operational SCM.