Facing an increasingly competitive and dynamic marketplace, companies face mounting pressures and challenges:
- Total quality (product and service)
- Managing Cost
- Increased emphasis on market-defined quality and adding value for the customer or consumer as the source of sustainable competitive advantage.
- Global markets v. local offering
- Mass customisation
- Joint ventures, mergers and acquisitions
The Increasing Complexity Of Purchasing Processes
The role and underlying objectives of the Purchasing Function has consequently changed greatly over the last few years. Some of the main changes impacting purchase processes are:
- rapid fluctuations in supply and demand due to changes in manufacturing processes or supply-side capacity
- increases in the use of non-personal purchasing methods, such as electronic bid lists and EDI (electronic data interchange links)
- price volatility due to economic swings and competitive intensity
- continuous shifts in currency values affecting International operations
- Increased emphasis on total supply chain management between suppliers, their channels and customers.
Supply Chain Management
Account Managers are familiar with the sales and buying process. However, a third process is becoming increasingly important – the process of doing business i.e. the speed of responding to customer requirements which includes the functions of sales, design, production or manufacture, order fulfilment, support and ongoing logistics and customer assistance.
This process of integrating business systems/activities is Supply Chain Management.
The Implications Of SCM (Supply Chain Management)
Where there is strong competitive pressure amongst existing or potential suppliers to win high value orders, the business is more likely to go to that supplier who, through demonstrable competence, can offer such benefits as:
- better co-ordination of key activities
- reduced lead times
- increased reliability of delivery
- greater flexibility
- improved information facilities , etc.
The Growing Importance Of Supply Chain Management
- Organisations are focusing more on their core capabilities and therefore outsourcing non-core activities
- Increased use of “just-in-time” supply processes for both products and services
- The consequential increased reliance on the expertise and value-added of their suppliers in relation to service and support
- The requirement for suppliers to effectively “project manage” the implications of their customer’s decisions and purchasing cycles
- The need for enhanced communication processes and systems.
Whilst all of these are potentially “friction points” between suppliers and customers, they can be more positively viewed as opportunities for the Account Manager to add value and expertise in managing the total relationship with organisations.