Answer to Question #317821 in Management for Asivhothe Hope

Question

What are the implications for business enterprise if he select a supplier who does not have the required characteristics? (10 marks)

Answer 1

Increased risks – in which selecting a flawed supplier can result in unforeseen cost in terms of operations and regulatory compliance. This can cause poor performance and loss of capital hence one cannot protect the organization from collapsing.

Increased costs – having a decreased visibility of the supplier reduces the chances of saving on costs. This is due to poor relationships with the supplier and ineffective processes and procedures which are not helpful in negotiating better rates and discounts.

Lack of loyal customers – working with exceptional suppliers can make one to do things that foster god relationships. However, with ineffective suppliers, there is no efficiencies that can help in smoothening processes which can result in building the loyalty needed to keep suppliers for the long term.

Decreased operation speed – suppliers without the required characteristics can slow down the time and resources needed for productivity. As it can be difficult to obtain capacity details from them, it would be hard to move through the procurement process and receiving goods in a quicker way.

Insecure brand – as the organization’s brand holds great value, one would not want to tarnish it because of the actions of an unethical supplier. Therefore, dealing with a wrong supplier increases the risk of serious incidents which might cost the company.