What is supplier and enterprise development

WHAT IS SUPPLIER AND ENTERPRISE DEVELOPMENT Supplier Development provides potential suppliers the assistance on how to improve innovation, quality, delivery time, performance, customer responses, and business impact in market and reduce cost of production, inventory, manufacturing, investment etc. A brief idea is given on who can pursue supplier development and gain what all benefits. Enterprise development as discussed proves to be another strategy for economic growth.

SUSTAINABLE VALUE CREATION: Effective Supplier Development is a direct path to sustaining high performance. To overcome the myriad of challenges and increased risks associated with a more volatile operating environment, it is becoming more and more important for organizations to establish strategic ties and collaborative relationships with key suppliers. Supplier Development is all about improving supplier capabilities so that they can provide better quality and delivery, lower cost products and on-time services. Benefits delivered to their customers increases supplier profitability as well. Supplier Development is a joint venture between the supplier and the buying company to obtain a competitive advantage and optimal added value for both the parties but carrying out shared innovative projects and activities.

WHY THE NEED? In times of economic uncertainty, risk anticipation, monitoring and mitigation have an ever increasing important role to play. The uncontrollable increase in raw material cost, energy prices and low

performance at quality and delivery due to hiking labor and other such financial and operational risks have forced collaboration of leading organizations with key suppliers. This gives opportunities for further cost reduction by close interactions of key suppliers with the buyers advising them of alternate ways of making the products. A core tenet of ensuring a sustainable relationship with key suppliers is to achieve a right level of compliance and to make sure that brand image does not suffer as a result of noncompliance. This can be achieved without increasing the product cost and ensure that workers get the minimum legal wage by working in close collaboration with the suppliers. Leading companies can provide only the functional goals to the suppliers rather than giving the technical specifications to let them come out with innovative ideas to produce differentiated and innovative products at competitive prices in the market. Going green is another compelling reason to work closely with suppliers in order to reduce waste through alternative material usage, improve material utilization, improve effectiveness of operations by transportation optimization that reduces carbon emissions, etc.

BENEFITS: • Business objectives are better aligned for both the buyer and the supplier by developing trust-based relationships and inspiring opportunities for increased innovation • Sustainable cost reduction is achieved by building leading practices into the supply base • A quality culture developed in the supplier organization makes sure quality is built into the process which helps clients move towards vendor independence • Reduce financial and operational risks associated with supplier quality issues, supply shortage issues, unanticipated price volatility, etc. Increasing risk of bankruptcy strongly increases supply chain risk and therefore, one is forced to have closer ties with strategic planners who can reduce these risks • Gain competitive advantage through new product development and innovation • Efficient and effective usage of resources by adopting ‘lean’ and ‘green’ practices • Compliance can significantly be improved by improving productivity and quality and alleviate excessive overtime and underpayment • Improved processes and outcome for both parties

GOALS OF Enterprise Development: The four basic goals or criteria for Enterprise Development are assist or accelerate development, sustainability, financial independence, and operational independence. Enterprise Development consists

of monetary and non-monetary, recoverable and non-recoverable contributions to initiate and implement accelerating the development and sustainability. , it is a strategy that promotes economic growth and builds private enterprises, membership organizations to represent them and stronger yet more inclusive competitive markets.

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