How to maintain an integrated supply chain performance system?
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Most OEMs no longer compete solely as autonomous corporations. They also compete as participants in integrated supply chains. This revolution, which is changing the ways products are designed, produced, and delivered, has the potential to alter the manufacturing landscape as dramatically as the industrial revolution or the advent of mass production. This chapter describes the changing nature of supply chains and efforts to optimize their performance.
In the past, OEMs typically drove down the cost of purchased materials through aggressive negotiations, imposing terms and conditions that minimized supplier profitability and often left suppliers in a weakened condition. More recently, OEMs have begun to adopt a strategic partnership approach, which recognizes that increased, sustainable benefits can accrue from long-term relationships between participants in the supply chain (a win-win situation). This approach considers total life-cycle costs over multiple iterations of a product, with the goal of increasing mutual benefits for all participants in the long run.
In the past, OEMs typically drove down the cost of purchased materials through aggressive negotiations, imposing terms and conditions that minimized supplier profitability and often left suppliers in a weakened condition. More recently, OEMs have begun to adopt a strategic partnership approach, which recognizes that increased, sustainable benefits can accrue from long-term relationships between participants in the supply chain (a win-win situation). This approach considers total life-cycle costs over multiple iterations of a product, with the goal of increasing mutual benefits for all participants in the long run.
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