How Many Suppliers to Use

For most companies, the numbers of suppliers rise over time. After a while, the number of suppliers gets to an unmanageable number. If this happens, it becomes necessary to optimize (reduce) the supply base. Reducing the supply base frees time resulting in improved 

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Another aspect firms contend with is deciding how involved suppliers should be and to what extent firms should develop their suppliers. Should suppliers be involved in product development and other critical decisions Larger companies with complex material and component requirements are beginning to take a proactive approach with their suppliers. They are finding that buyer and supplier relationships can mitigate new product development costs and risks. Early supplier involvement can produce better designs, decrease production costs, and yield faster idea-design-production-sale timelines. 

Furthermore, a joint buyer—supplier quality program can reduce the amount of defective product and service instances. The cost of rejecting materials and shipments for noncompliance increases costs related to transportation and testing, among others. Working with suppliers can reduce the amount of defective and nonconforming products and services. 

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