The tool used to pass data and expectations between suppliers and customers with the primary purpose for the customers being to have what is needed, in the quantity and quality needed, and at the lowest possible price.
Comments: Managing Supply Chains has become an area of specialization in which entire careers are now built. Expectations on suppliers to lower prices, ship on-demand or forecast with increasing perfection are common. Many customers expect suppliers to replenish the stock in-house requiring visits from supplying companies on a regular basis.
As an increasing trend customers are requiring suppliers to delay billing for materials supplied until those materials have been consumed in-house or in some cases until outside customers have purchased finished goods that contain the materials from the original supplier.
Can anyone say “Cash-Flow”? Stricter requirements are pushing suppliers to limits in many cases essentially weeding-out smaller companies from the supplying base.
Click HERE for an outstanding and extremely thorough Glossary of Supply Chain Terms & Definitions.