The than a customer one. o Fragmented relationship

The
traditional supply chain flow (figure 1) might seem easy to understand, yet,
there are various intermediaries’ constraints that harden up the fluency of the
fulfillment process.

Retailers
are considered as the voice of the end users, as they pull up the requirements
and issues that customers are having in terms of delivery delays, sales
forecasts, complaints concerning defective products or even inventory turnovers
and push it up to Manufacturers & wholesalers (if any).

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The
ascending flow of information to go from retailer to supplier is a critical
point in determining the operational behavior of production and delivery
planning,

 

If we
are to contemplate and analyze the very first points to take into consideration
while establishing a supply chain flow, we will have to point out at the
relationship establishment among all the entities involved and mainly the
supplier/retailer relationship which must be built on the following principles:

 

·        
Trust:  

An
essential factor which is measured by the reliability of the other party, it’s
the key factor that define the future type of relationship linking both
suppliers and retailers.

Mutual
trust can ease the collaboration and coordination efforts, hence smooth a
successful interaction in a way that it plays a crucial role into determining
both:

o  
Cooperation’s level : to what extent both
parties can go into sharing risks and benefits

o  
Cooperation’s Duration: Till when the parties
will be willing to continue business with each other.

 

The relationship between
suppliers and retailers can be characterized as being collaborative, but, as a
matter of fact, it can be disguised under several forms:

o   Adversarial relationship:

When retailers do not like doing
business with a specific supplier, as he might be too complicated to deal with
in terms of feasibility of operational processes.

o   Transactional relationship:

When the function of selling overwhelms
the whole operational model of doing business, the supplier in this case operates
under the slogan of excessive sales, which derivate him to adopt the push sales
strategy, in where they are pushing products inside the chain even though the
retailer doesn’t need them.

This relationship stops the CLC from
growing in a healthy way, as it can be perceived as profit oriented more than a
customer one.

o   Fragmented relationship

This type of relationship occurs
only when the business is run by the buying and selling function only, the
supplier adopting the selling strategies is managing all customers activities
in where the information systems are semi inexistent, and the development of
new information technologies are developed only based on the requests of the
retailers which are driven by the customers (such as EDI).

To go deeper to the
specifications of a successful supplier retailer interaction, various crucial operational
factors are to be listed and covered as follow:

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