2. Your manager at the medium-sized company where you work has just called you in and asked you to explain why the company should spend its limited financial resources to develop a supplier measurement system. What do you tell her?

• It helps in procuring material from best suppliers available in the industry.
• It reduces the chances of conflict between buyer and supplier by streamlining the entire process.
• It reduces overall operating cost of the company and facilitates operations.
• It facilitates continuous evaluation of suppliers and hence increases their performance.
• This also helps the company to obtain the desired quality of goods and services.

6. Discuss the logic behind maintaining a reduced number of suppliers for each item.

• The buyer can focus on selected suppliers to deliver quality products and services.
• There is lower risk associated with the supply base since number of suppliers is comparatively less.
• Reduced number of suppliers reduces the administrative cost of whole supply chain.
• The company would gain the advantage of pursuing complex supply management strategies to enhance its overall production process. Thus, gaining competitive advantage.
• It helps in developing good relationship with suppliers, which is beneficial for the company in the long run.

12. A common statement made in some supply management organizations is, “We can’t be spending money on supplier development—we’re not in business to train suppliers and do their job for them!” What type of barrier does this statement present? How would you respond to such a statement?

Buyer-specific barrier represents the situation when a buying company does not engage in supplier development unless its senior management recognizes the need for it. Due to this barrier, the manufacturing firms do not focus on their supplier development. They consider it to