Comparative Analysis of Value Managed Relationships PPT
This PPT slide, part of the 80-slide Value Managed Relationships Analysis PowerPoint presentation, presents a comparative analysis of Value Managed Relationships (VMRs) against traditional procurement methods and vertical integration strategies. It highlights how VMRs can provide superior value by fostering closer supplier relationships and enhancing collaboration.
On the left, the "Traditional 'Arms Length' Approach" is characterized by a fragmented supplier base and sporadic communication. This method often leads to investments focused solely on the manufacturer's immediate needs, which can result in adversarial negotiations aimed at securing the lowest unit price. Additionally, product designs are typically separate, limiting innovation and responsiveness.
In contrast, the VMR model emphasizes a more integrated approach. It suggests maintaining a limited number of suppliers to facilitate frequent communication, which can enhance trust and collaboration. This model allows for customized investments in facilities and equipment, aligning supplier capabilities with the manufacturer's strategic goals. The long-term commitment inherent in VMRs focuses on minimizing total systems costs, leveraging a value chain perspective to optimize overall efficiency. Joint product design and cross-functional participation are also key components, promoting innovation and shared objectives.
The slide also outlines vertical integration, which involves in-house supply and frequent communication. However, it notes potential downsides, such as the need for investment in weaker strategic areas and a focus driven by internal incentives that may not align with market realities.
Overall, the slide underscores the strategic advantages of adopting VMRs, suggesting they can lead to more sustainable and productive supplier relationships compared to traditional methods and vertical integration. This insight is critical for decision-makers considering procurement strategies that enhance operational efficiency and drive long-term value.
This slide is part of the Value Managed Relationships Analysis PowerPoint presentation.
EXPLORE MORE SLIDES FROM THIS PRESENTATION
EXPLORE MORE PRESENTATIONS ON
Customer-centric Organization Customer Profitability Value Chain Innovation
Flevy is the world's largest knowledge base of best practices.
Leverage the Experience of Experts.
Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.
Download Immediately and Use.
Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.
Save Time, Effort, and Money.
Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.
