Here are five core competencies that supply chain professionals need to masterand continually improve.

1. Global business leadership. If your supply chain isn't global now, it probably will be soon.
Supply chain professionals must be able to effectively operate in the fast-moving international
business environment. This includes adapting to disparate cultures; fully comprehending how
global risk plays out for their business; and being adept at managing the long lead times inherent
in the international marketplace.
They must also know the basic supply chain fundamentals associated with global logistics, such as
how to optimize import and export flows, source globally, and deal with global labor issues.
2. Transformational capabilities. Supply chain professionals operate in a dynamic environment,
where they are constantly driving transformational initiatives. They must deliver on time and on
budget, while generating superior results.
As the bar is constantly raised, they must excel at managing change, complex projects, and diverse
talent, and possess exceptional communication and negotiation skills.
3. Integrated business planning. Dealing with cross-functional and cross-enterprise issues
represents a large part of supply chain management. This involves integrating a company's
operations side with its demand side, and embracing demand and supply integration concepts,
such as sales and operations planning.
In addition, supply chain professionals lead the way in designing collaboration initiatives with
suppliers and customers, and they must master the challenge of planning the end-to-end supply
chain.
4. Integrated value chain implementation. To be seen as central to the enterprise's success, supply
chain professionals must exceed customer expectations and become integral to delivering
outstanding value. Some customers don't know what they want until your firm exceeds their
expectations. Supply chain professionals achieve this result by implementing an end-to-end value
chain design, including customer segmentation, product and supply chain design, and optimization.
5. Linking supply chain performance to organizational success. World-class supply chain
professionals combine expertise in material flow management with outstanding knowledge of
information and financial flow. Mastering these flows is crucial to generating supply chain
performance and financial results that resonate in the executive suite and boardroom.
To sustain that performance, supply chain professionals must design a metrics framework that
drives the right behavior, and processes that deliver product availability at the lowest possible cost
and working capital levels.













Supplier Relationship Management
The term "Supplier Relationship Management" (SRM) refers to the use of technologies by an enterprise
to improve the supply mechanism at its suppliers. Just like employee relationship management, this
concept is based on customer relationship management.
The goal of SRM is to allow an enterprise to improve communication with its different suppliers, share a
methodology, business terms and information with them and improve familiarity with each other to
optimize the supply process. In turn, SRM is also intended to ensure that suppliers familiarize themselves
better with the core business of the enterprise and its different products to ensure a customized supply.
SRM Processes
SRM solution editors generally define a process comprising four large stages:
Cooperative design, consisting in integrating the supply problems from the time a product is
designed by involving suppliers via a cooperative design tool while ensuring a minimum cost at
all levels;
Identification of suppliers (sourcing), whose purpose is to identify potential suppliers and to
prepare a scorecard by qualifying them in accordance with their cost, production capacity,
delivery deadlines, and their quality guaranties. At the end of this stage, the best suppliers can be
invited to submit bids;
Selection of suppliers , via a reverse auction mechanism, where the roles of the buyer and of the
seller are reversed. The SRM tools generally have a bidding interface which makes it possible to
make three types of requests (commonly called "Request for x" and written RFx) :
o RFQ (Request For Quotation), i.e. a simple request to quote prices for relatively common
products. The supplier who submits the lowest bid is generally selected;
o RFP (Request For Proposal), i.e. a request directed to suppliers to submit a commercial
proposal, specifying a price, but also information on the company, its solvency, production
capacities, stock and delivery deadlines, etc. A supplier is selected in accordance with a
selection system which makes it possible to evaluate the proposals in accordance with
different criteria.
o RFI (Request For Information), which consists in issuing a simple request for information
regarding the products and services offered by the suppliers, which does not necessarily
imply any bidding.
Negotiation, whose purpose is to formalize the contract between the enterprise and the selected
supplier, possibly including specific clauses regardign logistics, terms of payment, service quality,
or any other special duties.







Establishing Supply Chain Partnerships
Many companies believe that supply chain partnerships are essential for their continued success. However,
to establish and maintain genuine partnerships requires a considerable investment of time and resources.
It is important for companies to identify those key relationships for which partnering would create
exceptional advantages, and to manage their other supplier and customer relationships with appropriate
expectations. An in-depth study of supply chain relationships by The Global Supply Chain Forum arrived
at the following definition of a true partnership:
"A partnership is a tailored business relationship based on mutual trust, openness, shared risk, and shared
rewards that yields a competitive advantage, resulting in business performance greater than would be
achieved by the firms working together in the absence of partnership."
This study classified supply chain partnerships into three main types, listed below, reflecting an
increasing level of commitment. Only in a few cases will a Type 3 partnership be justifiable.
Type 1: Agreement to coordinate selected supply chain activities, with limits on time and scope.
Type 2: Agreement to integrate a broader range of selected activities over a longer time frame.
Type 3: Commitment to a significant level of operational integration, with no anticipated end date.
The study produced a partnership model, illustrated below, which provides a basis for making decisions
about partnering with suppliers or customers


A decision to partner will be influenced by driving factors that indicate mutual benefits, as well as
facilitating factors that increase the likelihood of a successful relationship (e.g., cultural compatibility,
managerial approaches, mutuality, and symmetry.) For example, the partnership between Coca-Cola and
McDonalds is enhanced by the fact that both companies are the leaders in their industry. Coca-Cola is
McDonalds largest supplier, and McDonalds is Coca-Colas largest customer. Other potential
facilitators include exclusivity, shared competitors, close proximity, prior history, and shared end users.
While EHS issues are seldom the primary motivation for partnerships, there are cases in which a
partnering decision can be reinforced by important factors, such as:
Opportunities to increase overall supply chain efficiency through process streamlining, e.g.,
shared assets, redesigned packaging, reduced transportation, inventory reduction, and waste
reduction.
Opportunities to reduce joint risks and liabilities through closer communication regarding
compliance and risk management strategies, as well as sharing of technical expertise.
Outsourcing opportunities that leverage the capabilities of one or both partners, e.g., total
chemical management services provided by a chemical supplier.
Marketing and/or public relations advantages based on a shared commitment to environmental and
social responsibility.
Once a partnership is initiated, the parties must establish and manage a number of components that make
the relationship operational. These include joint planning processes, joint operating controls,
communication links, and risk/reward sharing mechanisms. Partnerships are strengthened by trust and
commitment, streamlined contract style, broad scope of activities, and shared financial investment. It is
important that the partners mutual expectations be expressed in terms of performance indicators, so that
the outcomes of the partnership can be monitored and the components can be adjusted as needed. Also,
each partner must allocate sufficient resources to adequately support the relationship. Since resources are
typically limited, the required staff commitments must be explicitly planned and supported.