Supplier Relationship Management at Global Food, UK

This document discusses the importance of supplier relationship management in the context of Global Food, UK. It explores the economic issues and risks in the supplier relationship and different aspects of supplier relationship management. The document also highlights the importance of procurement for global organizations operating in complex market environments and the use of complex models of project risk and procurement management.

Running head: SUPPLIER RELATIONSHIP MANAGEMENT AT GLOBAL FOOD,UK
SUPPLIER RELATIONSHIP MANAGEMENT AT GLOBAL FOOD,UK
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SUPPLIER RELATIONSHIP MANAGEMENT AT GLOBAL FOOD,UK
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Identification of the economic issues and risks in the supplier relationship:.........................2
Different aspects of supplier relationship management:........................................................4
Importance of Procurement for global organizations operating in complex market
environment:..........................................................................................................................7
Project Risk and procurement management:..........................................................................8
Use of complex models of Project Risk and Procurement Management:..............................8
Importance of risk management in the development and maintenance of sustainable
procurement:..........................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

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Introduction
Global Food, UK started functioning from 1964. Global Foods offers both cash and
carry and delivered trade operations. The organization deals with the import and export of the
food items from different part of the world. One of the major countries from where the
organization imports food items is Greece. While developing this tread, maintain the supplier
relationship management is important. It is important to implement the robust procurement
process along with the supplier relationship in this context. Maintaining the supplier
relationship along with favourable negotiation terms and condition makes the supplier
relationship management more complex (Forkmann et al.2016). On this situation it is
important to understand the risks associated with the supply chain along with the different
issues like maintain the sustainability in the process. The main objective of this paper is to
evaluate the risks raising from the sourcing the food materials from Greece for Global Food.
The managing of the procurement function through the global network is also relevant in this
context. In order to develop the discussion in a proper way, examples from the different case
studies are taken to understand the business environment (Riley et al. 2016). The conclusion
is drawn from the facts discussed in this paper. From the discussion of this paper the
importance of the procurement management in the global context can be understood in a
proper way. This has been done through the application of theories regarding the risks and the
procurement management.
Discussion
Identification of the economic issues and risks in the supplier relationship:
Global Food, UK is operating the business globally. The organization is operating the
business in international level. Global Food sources the food items from Greece. In this
situation, the economic condition of the Greece is important. Recently, the economic

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condition of Greece is not stable. In this situation there are certain threats and opportunities
for the Global Food in doing business with Greece. The Global Food can buy products from
the Greece in very reasonable price. However, making major investments in the Greece can
be risk for the Global Food, UK.
The risks in the supplier relationship management is related to the risks in procurement
management. The identified risks in this context are-
 Management of risks: Management of the risks is a concerned thing for the
procurement. In this situation the approach is regarding the two-tier supplier. In this
situation controlling approach is needed to be taken ensuring the necessary
obligations.
 Maintaining the reputation and brand image: Global Food is an emerging company
who is dealing with import and export of food items. In this situation, it is needed for
the organization to enhance the goodwill and reputation through proper practice of the
business. The proper practice will include maintaining the rules and regulations of the
business and maintaining the quality of the service.
Once the identification of the supplier risk is done, it is necessary to find out the way to
manage the supplier risks. Some of the steps those can be helpful for the mitigation of the
risks are-
 Knowing the supplier: As the supply chain becomes global, the components in the
supply chain management become complex. In this context, it can a challenge for
Global Food to ensure the compliance of rules and regulations regarding the business
of Greece. The communication can be critical as there are many cross references
between the companies of Greece and Global Food, UK. In this situation Global Food
an create the centralized supplier information. This will help to introduce the process

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that will create the consistency of the data across the organization. It is important for
the Global Food that the supplier data is accurate verified. The method is needed to be
implemented in the organization in order to ask the right questions to the supplier
while doing the business.
 Collaboration of the work to reduce the complexity: Gathering the information across
the globe regarding the suppliers and the smart co-ordination can increase the
visibility of the suppliers and can decrease the cost for managing and verifying the
data regarding the supplier.
Different aspects of supplier relationship management:
Supplier relationship management is the process of activities those involves the
development and the stabilization along with the dissolving of the problems in case of
business deal with the supplier. This management of relationship helps to observe the out-
suppliers and enhance the value of the relationship. There are different phases of the supplier
relationship management. These are- Out-supplier management, In-supplier management and
in-supplier dissolution management.
Out-supplier management:
The main objective of the out-supplier management is to observe the different aspects
of the supplier with whom the Global Food is not dealing with. The intention of the out-
supplier management is to select the best supplier available in the market (Roehrich,
Hoejmose and Overland 2017). The selection of the best supplier will help the Global Food,
UK to get the best products at minimal cost. The optimization of the portfolio of the suppler
is the one of the main aims of supplier relationship management and it is achieved through
out-supplier management.
In-supplier management

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In-supplier are the supplier with whom the organization is dealing with. In case of Global
Food, the organization is currently dealing with some of few companies in Greece. In this
situation, those companies in Greece can be regarded as the in-supplier. Maintaining the
relationship with in-supplier depends on the good communication skill between the
organization and the suppler (Hugos 2018). However, it has been seen different in-supplier
have different potentials. On the basis of the potential, the communication and assigning the
priority varies between the Global Food, UK and suppliers for the organization. In-supplier
management can be divided into three different categories- Set-up management, contract
management and development management.
 Setup management: Setup management indicates that the organizations should invest
for setting up the relation for the supply of the resources. The transaction cost theory
indicates that investing the right amount of cost and resources are important for
setting up new relation with the new supplier. Set-up management aims to enhance
the joint value creation, competitive advantage and economic performance. The initial
stage of the set-up management involves selection of the right supplier. The selection
is based on the out-supplier management.
For the Global Food, UK, the selection of the new supplier from the Greece is
based on the evaluation of the out-supplier management done by the organization. In
this situation, the Global Food is needed to choose the organization based on the
performance of the organization. Moreover, the unstable economic condition of the
Greece is needed to be concerned during the selection of the suppliers.
 Development Management: In the development management the areas can be
identified for the further development in the supplier-purchaser relation (Monczka et
al. 2015). Similarly, in the set-up stage specific investments can be occurred during
the development management. The professional development management is needed

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to be applied in order to evaluate the strategic importance of the supplier (Wiengarten
et al. 2016). The supplier who have the “high relationship contribution” is needed the
higher level of development management.
In case of Global Food, the identification of the supplier with higher contribution in
the supplier relationship management. Maintaining the higher level of the
development will help the Global Food to keep the constant supply of the food items
from those identified suppliers (Tangpong et al. 2015). Apart from that the activities
of the suppliers will not shift to the other competitors of the Global Food, UK. Apart
from that, the Global Food is needed to consider those supplier firms which have a
low contribution in the process, however, these companies have potential to become
the major suppliers. These suppliers are known as “Potential Value Enhancers”
 Contract Management: Contract management is associated directly with the
development management. In the development management, the communication
between the purchaser and the supplier is needed to be maintained (Su and Yang
2017). In order to maintain the communication in a proper way, it is important to
build the perception of trust and commitment between the supplier and the purchaser.
Global Food, UK needs to own the trust of the food supplier companies in
Greece. This can be done through the proper communication and maintaining the
goodwill of the Global Food. Reciprocal action theory can be applied in this situation.
This theory is useful in business to business condition (Sillanpää, Shahzad and
Sillanpää 2015). According to this theory there is a tendency of the business
organizations to reciprocate the behaviours and this leads to return of the perception
and trust from the partners in this business deal.
For the situation of the Global Food, it can be said that the proper perception
and the commitment of the organization towards the supplier companies can become

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helpful to maintain the required communication for the supplier management.
Maintaining this communication can be regarded as contract management (Tidy,
Wang and Hall 2016).For every supplier manager the investment from the one side of
the purchaser cannot be assumed. In this situation, the development of high level
contractual agreement can be developed (Chae, Choi and Hur 2017). The main
objective of the contract management for the Global Food is to secure the contract
agreement between the organization and the different food supplier companies in
Greece.
Importance of Procurement for global organizations operating in complex market
environment:
Global Food, UK is dealing with various suppliers around the world. In this context, the
supplier- purchaser relationship is complex (Behzadi et al. 2018). In this situation the
importance of procurement for the global organizations like Global Food, UK is needed to be
done. The importance of the procurement management is as follows:
 Strategic perspective: Procurement management plays an important role in the
multinational companies at present years. Procurement management is acquiring the
goods and services from different firms (Teller et al. 2016). The main objective of the
procurement is to collect different food items from the different suppliers at optimized
cost. Global Food, UK can chose the right supplier from the Greece in order to collect
the resources from the different suppliers.
 Managing the issues through the procurement management: Procurement
management supports the training of the employees so that they can understand the
process of managing the complex process of the collection of resources from the
different suppliers.

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 Global supply chain strategy: For the global supply chain strategy of Global Food, the
organization has to manage different suppliers from Greece. The effectiveness of the
supply chain management is dependent on the proper procurement management
(Maestrini et al.2018). It has been seen that Global Food, UK has to deal with
different suppliers from Greece. Proper procurement management will help Global
Food, UK to save money while purchasing the goods from outside.
Project Risk and procurement management:
Project risk can be defined by the unnecessary events occurred during the
development of the project. In case of Global Food, UK, maintaining the supplier relationship
with different organizations in Greece can be regarded as a project. There are certain risks
associated with the business process of the Global Food, UK. The economic condition of
Greece can lead to the complexity in the supply of goods from the suppliers based in Greece.
In this situation. Global Food can face the constraints in the supply chain management (De
Araújo et al. 2017). This can affect the business of the organization in a negative way (Kumar
and Rahman 2015). This type of risks can be classified as resource risk.
Global Food can response to the risks in different techniques. Some of these techniques
are-
 Avoidance: Selection of the supplier for the Global Food is needed to be done in a
proper way, so that the constant flow of resources can be received from the supplier
and supply chain management can be maintained in a proper way.
 Mitigation: Global Food can impose the rules and regulations to reduce probability
and the impact of the risks in the supplier relationship management.

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Use of complex models of Project Risk and Procurement Management:
Project risk is defined as the sudden change in the event during the development of the
project. In order to manage the risks, risk management model can be used by the Global
Food, UK. The basic steps those can be followed by the risk management model are follows:
 Identification of the risks: The identification of the risks for the Global Food, UK is
important (Fleming 2019). The risks can be identified on the basis of the procurement
management and the relation between the suppliers and Global Food, UK.
 Analysis of the qualitative risk: The analysis of the qualitative risk can be done on the
basis of the identified risks. The analysis can be done on the basis theoretical
evaluation of the identified risks.
 Planning for the risk response: After the identification and the analysis of the risks
Global Food, UK is needed to plan the way for responding to the risks (Hopkinson
2017). Quick response planning is needed to be done for managing then critical
situation for the Global Food, UK.
 Risk monitoring and control: Monitoring and control of the risk is major component
in the project risk management model (Nazari-Shirkouhi, Keramati and Rezaie,
2015). Proper monitoring and control of the risks can improve the overall risk
mitigation system.
For the procurement management, Global Food uses Dominick Matrix. This helps global
Food to maintain the right strategy for working with the suppliers (Mitrega and Pfajfar 2015).
According to this matrix, the strategy for the procurement management is dependent on two
factors- materiality of the supplier in the business and sophistication level of the suppliers.

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Importance of risk management in the development and maintenance of sustainable
procurement:
The procurement management indicates maintain the relation between the supplier
and purchasers. While maintain this relationship, different constraints can occur and these can
be regarded as risks. In this context, proper management of the risks can be helpful for
maintain the sustainable procurement.
Some of the possible risks along with the possible solutions for the Global Food are-
 Failing to secure ongoing supply in the organization: The possible consequence in this
case is that Global Food can fail to achieve the key organizational results and the total
cost for the procurement process for Global Food, UK can become high. In this
context, proper procurement and the portfolio planning can be done to mitigate these
problems.
 Global Food can face the risks from inadequate specifications of the requirements. In
this case, the Global Food can face problems regarding the goods and resources. The
resources may not meet the desired requirements. Apart from that the proper
evaluation process may not be carried out.
Conclusion
The discussion is regarding maintain the supplier relationship management of the
Global Food, UK. In this case, different aspects of the supplier relationship management of
Global Food, UK has been discussed. It has been seen that some of the suppliers from the
Greece plays an important role in the supplier relationship management. In order to maintain
the proper supplier relationship management , the risk management and the procurement
management is needed to be done in a proper way.

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