BJB is a leading manufacturer of high-end compact disc changers for the automobile industry. The products are very popular in the entertainment industry. In the paper below, alliance necessities, recommendations, and suitable metrics for the company to assess the performance efficiency of their suppliers are highlighted.
For BJB to have an effective supplier alliance, certain requirements must be met. High level of commitment between the two parties should be maintained (Burt & Petcavage, 2010). Through this, the alliance will be able to abide by its core business. Similarly, the involved parties should enhance an atmosphere of cooperation. The collaboration will improve the productivity of the alliance. Equally, partnership will increase the alliance’s morale. Another requirement necessitates the alliance members to share a similar vision. The above will minimize the occurrence of wrangles and guarantee smooth business operations. In addition, if the requirements are implemented effectively supply chain management would be made easy.
If the company wants to assess the performance efficiency of their suppliers, it must adopt appropriate metrics. BJB should adopt a supplier scorecard. The scorecard will enable the company to evaluate the suppliers’ performance metrics over time (Chopra & Meindl, 2001). Metrics ought to conform to the company’s goals. Because the company seeks to improve the quality of their products, it must choose appropriate metrics. Therefore, they should focus on fill rate measure, time delivery, performance to promise, backorder reports, cycle time, perfect order measure, inventory turns, inventory accuracy, transportation, and balanced scorecard metrics (Burt & Petcavage, 2010). Based on the company’s goals, the above metrics are meaningful, linked, practical, and actionable.
The above measurements would ensure that the company attains a competitive advantage. The measurements would allow BJB to assess the best suppliers in the market. Through this, the company will be supplied with the best products. Similarly, the measurements will enable the company to eliminate inappropriate suppliers. Based on the above, it is apparent that the approach will allow BJB to meet the customers’ ever-changing needs and gain a competitive advantage in the market. Through this, they will be able to outperform its competitors in the entertainment industry.
If BJB switches suppliers, it will incur some costs. There are three types of costs associated with changing supplier alliances (Burt & Petcavage, 2010). Procedural cost is associated with time and effort lost in time and training owing to the changes. Financial lost is linked with the loss of money owing to the changes. On the other hand, relational cost refers to the uneasiness felt by consumers of a new supplier when adjusting to the alteration.
For effective supply management, the company’s strategic planning committee must incorporate the supplier alliance and metrics (Chopra & Meindl, 2001). Therefore, I would recommend that the alliances come up with metrics, which matches with the supplier alliance’s goals. If the above recommendation is not implemented, the alliance is likely to collapse. Since BJB’s success is highly dependent on its suppliers, it would be costly for the company to fail in the management and assessment of the suppliers.
References
Burt, D., & Petcavage, S. (2010). Supply management (8th ed.). Boston: McGraw-Hill Irwin.
Chopra, S., & Meindl, P. (2001). Supply chain management: strategy, planning, and operation. Upper Saddle River, N.J.: Prentice Hall.