Question

- Chrysler and General Motors vigorously compete with each other in many automobile and truck markets. When Jose Ignacio Lopez was VP of Purchasing for General Motors, he made it clear that his buyers were not to accept luncheon invitations from suppliers. Thomas Stalcamp, head of purchasing for Chrysler at the time, instructed his buyers to take suppliers to lunch. Rationalise these two directives in light of supplier relations and the impact on supply chain management. PROVIDE 3 DETAILED REASONS TO SUPPORT YOUR ARGUMENT

Answer 1

CASE OVERVIEW

In general motors jose lgnacio was vice president for purchases and his clear instructions was not to accept luncheon invitation from suppliers where as Thomas stalcamp purchasing manager  at chrysler instructed buyers to take suppliers to lunch. Here view of 2 purchase managers are totally opposite to one another.

EXPLANATION

Supply chain management is one of the important function in organisation as which involves movement of goods and services at different level like raw materials, material at work in progress and finished good. Here we are concerned about suppliers of raw materials for the company as all other functions of company totally depends on raw materials so managing good relationship with suppliers is very important here.

Maintaining good relationship with suppliers needs regular interaction and luncheon can be proved as friendly interaction session with less time constraints. Luncheon invitation is formal invitation to group of people for light meal where they will conduct important talk about business it's a form of business meeting

1. REGULAR INTERACTION - Is must to maintain smooth supply of raw materials in time without any bottleneck and proper communication helps to meet changing demand for materials.
2. SOURCE OF INFORMATION - Suppliers are not only source of raw materials but also source of information of materials market. As company never comes in direct contact with material market but suppliers do.
3. FRIENDLY ENVIRONMENT TALK - when you invite suppliers to your place for meeting you get friendly environment where you can put your point forward better compared to meetings at suppliers office.