Question

300 words with reference

Describe the traditional adversarial relationship with suppliers when using the “three quotes” system and how that changes with a supply chain system with one or few suppliers.

Answer 1

The three quotes system mainly deals with the efficiency which can be obtained in the management of supplier quotations and bids while performing the process of contracting or tendering in any kind of supply chain. The three quote system mainly indicates that there should be minimum of three quotations submitted to the organization which is being offered by three different suppliers so that the organization is in a better situation to appraise the quality of services offered and price credentials before taking any decision related to the award of the contract on the review.

The traditional adversarial relationship with the suppliers which came up from the “three quotes” set up was mainly focused on the manner in which the relationship and the evaluation of the suppliers can be handled effectively. This is the main reason behind the classification of three suppliers and retaining them by any organization for having any future supply or any future requirements related to the contracting. The decision related to the final selection of the supplier brings the adversarial relationship in case of the three quote system as the suppliers which are left will look forward to competing for the complete contracting process.

The changes process has, in fact, made it quite easier for the organizations at present to have a healthy relationship and collaboration with their suppliers in such a manner that the organization will be able to fulfill its requirements with the help of one or less number of suppliers. By doing so the organizations will be able to attain the desired level of sustainability and cost-effectiveness in the management of supply chain operations. This is possible as the cost associated with the tendering will be minimized by the firm which depends on one quality supplier or lesser number of suppliers for the supply of any product or raw material. In fact, a number of changes have been brought to modern supply chain system by the technology through supply chain management system and the B2B e-commerce

Reference

Heizer, J., Render, B., & Munson, C (2017). Principles of Operations Management: Sustainability and Supply Chain Management (10th ed.)

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