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Caterpillar Supplier Selection

In: Business and Management

Submitted By junaidjamil85
Words 553
Pages 3
Question#01
Review Caterpillar’s process for early supplier involvement. What was critical to the success of the relationship?
The relationship between a supplier and buyer can be a complex one. Each party wants to maximize its time, resources, and cash investment; these may be competing priorities that can strain the relationship. As per this case study it shows that M/s. Caterpillar was dissatisfied with its current supplier and they want to reduce their overhead cost through outsourcing. Therefore M/s. Caterpillar selects M/s. Delco Electronics and started working with the same.
Selection of M/s. Delco Electronics by M/s. Caterpillar involves the following phases.
 Pre-qualification of supplier
 Performance evaluation
 Official visits to M/s. Delco’s HQ
 Visit to Engineering Facility
 Production capacity unit
The critical thing to the supplier-buyer relationship is Trust, as its always difficult to start a business with new supplier. Evaluation should be done properly before selection. Have meetings, discussions, both partners have proper communication channel.

Question#02
How important was the role of specific individuals involved in the discussion? What does this say about the importance of trust in managing buyer-supplier relationships in such an environment, and the role of individuals in the relationship?
The role of specific individuals are very important during discussion because of having enormous responsibilities like monitoring and evaluation, technical discussions/meetings with their engineering team for execution, quality and production plans. These discussions are always playing a vital role in a strategic alliance because they both actually want to know what their requirements are and what can be produced. Moreover they have more concerns about future plans so they can have a future strategy.
For any buyer-supplier

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