Question

Supplier selection is a critical strategic decision for a long-term survival in the competitive market. Telion Technologies in this country considers supplier selection is the most important decision and willing to spend time and resources to develop good suppliers who institute reputable quality systems. (a) Describe a process how Tellon Industries should initiate supplier development plan, and (b) The reasons why Telton Industries is willing to spend their own resources to initiate the supplier development

Answer 1

Suppliers form an integral part of the company's operations. They are external stakeholders who if managed properly can bring or add a lot of the value to the organisation's purpose. Having a strong supplier network also increases in market competitiveness which in turn results in profitability and increase in market share. This is the reason why suppliers are considered as one of the stakeholders of the organisation.

a. Telion technologies goal is long term survival in the competitive market. Since they want a sustainable growth and survival in the marketplace, they should look at suppliers with whom they can engage for a longer period of time. The advantage of having a long term supplier relationship is that the co-ordination between both the parties increases and the supplier understands the organisation's needs better and contributes towards the achievement of the organisational goals and in turn make their own business succesful. Therefore, having a proper supplier development process is imperative for the organisation to achieve their goal. Below are few points that the organisation should keep in mind while designing the supplier development plan:

i. Involve cross functional experts - There would be several functions that are directly or indirectly affected due to the supply chain of the organisation. Therefore, the odea of involving the experts from the available functions while planning the supplier development plan would help as they would contribute their experiences from their respective functions, This would give more insights on what is happening at the ground level. Apart from this, involving other team members helps in better implementation of strategies designed.

ii. Macro to Micro planning - Planning should be from a top down basis where major activities should be planned well and then the micro activities should be taken. This helps in prioritising right from the beginning and results in better management of large suppliers when compared to smaller suppliers. The larger suppliers would cater to maximum demands of the organisation and hence their development plan should be of utmost importance. In case, these suppliers are neglected there would be a larger impact on the organisation's oprations when compared to micro suppliers.

iii. Business case - Building of a business case after having the discussions on the first two points mentioned above, helps in understanding the importance of the supplier development plan. If the above two points mentioned above i.e. involvement of experts in staretgic planning and deep diving and prioritising the larger levels are taken care, the business case building becomes simple. All the three factors are inter relational and impacts in the decision making.

iv. Change management planning - Change management is a tricky and difficult task. Especially with the reluctance shown by humans towards change it makes it even more challenging. Therefore, in order to have a proper supplier diversity plan, it is always important to incorporate change management principles which keeps the suppliers prepared about the changes and the ways to manage those changes.

b. Telion Technologies is willing to spend their own resources to initiate the supplier development plan. Since supplier selection and management is a challenging task and the organsiation is dependent on the supplier services to ensure that their services and delivery timelines towards their clients are not impacted. Telion Technolgies has made it clear that supplier development is one of their critical strategy. Therefore, they are willing to spend their own resources as their own resources will be aware of the goals and the vision the organisation possesses. They will be more inclined towards these goals, when compared to an outsourced vendor. Moreover, by having their own resources in place, the company will have more control on the overall proceedings of the project.