Improving Supply Chain Relationships

Supply chain management

INTRODUCTION
Supply chain management is referred as the procedure that is connected to run flow of wares and
services from one position to a different as well as it contain the procedure of convert raw stuff
into finishing products (Michalski, 2018). It helps out industry to run every one provide
performance in effectual method, improve client worth and make easy to gain sustainable
competitive advantages in competitive market place. Supply sequence organization represent as
the systematic activity of preparation, functioning, observe and domineering of provide sequence
activities in order to create value, leveraging logistics and maintaining competitive infrastructure.
In this report the chosen organisation Ikea which is a Swedish multinational conglomerate which
deals in scheming and trade easy to bring together fixtures products and kitchen appliance.
Individual organisation is founded in 28 July, 1943 by Invar Kamprad (Lechler and et.al., 2019).
It provides its services in 445 locations. In this report means that better give chain relationship
and factors that reduce risk and cost related to supply chain is discussed. Apart from that various
factors that improves sustainability is covered in this plan report.
TASK
The ways in which supply chain relationships can be improved.
Supply chain relationship: supply chain relationship is referred as the relation between both
suppliers and customers who connect them in efficient manner so they can easily exchange
information, demands various data and ensures the proper visibility of status (Soheilirad and
et.al., 2018). As it seen the organisations recognize the requirement of each item. Effective
supply chain relationship facilitates to reduce cost, help in understanding capacities and
capabilities as well as improves quality of respected process. The organisation must improve the
money saving in the design of the furniture. There are various factors and ways that improve
supply chain relationship between customer and suppliers that affect business performance and
profitability. These factors are discussed below:
Repeatedly correspond with provider: IKEA put together different communication means that
make easy respective organisation to stay in contact with provider. Transparency in
communication and various organisational activities help to create trust and understanding
between the partnerships. Effectual supply chain relationship facilitates to know them and stay
away from all communication goes down (Papetti and et.al., 2019). Throughout uphold effective

relationship business ensures the availability of materials and other resources that help to attain
all defined goals and objectives in effective and efficient manner.
Resolve issues quickly: As provider and business have their own goals and objectives so,
the act or perform all activities accordingly. Suppliers want to sale materials at high process on
the other hand business want to buy the material at lower price that creates issues between them.
So, Ikea resolve all issues and conflicts in efficient manner as well as maintain effective and
strong relationship. Properly resolution of makes trust among business and supplies better quality
material at appropriate market price.
Maintain appropriate agreement: Maintaining appropriate agreement between suppliers
and business is the most important step that is essential to build effective relationship. IKEA
prepare a clear crafted contract in which all terms and conditions are described clearly. It
eliminates conflicts, disagreement and problems that are occur between business and suppliers. It
facilitates to maintain effective relationship as well.
Supply relationship management program: To make effective relationship with supplier various
strategies and programmes are required (Ansari, 2017). IKEA organisation determine various
goals and objectives that are established through using different parameters such these goals
must be specific, measurable and achievable within defined period of time. All activities are
listed by the respective organisation that appropriate process, goals and roles are established that
only achieved by the support of suppliers. Suppliers are important factor that plays essential role
in business success through providing better quality material which is utilised to produce final
products.
Apply new technology: IKEA adopt various new technologies and automations to keep tracking
all relative information about their suppliers such as supply management software and purchase
order management software (Silva and et.al., 2019). This software are uses by the respective
organisation to create, process and order that simplifies the work of suppliers as well as create
effective relationship. These supply relationship management technologies provide visibility to
suppliers and respected organisation that make it aware about all supply chain impacts and
mitigating all risk as well.
All these factors and ways are analysed properly by the IKEA organisation and
implement them in order to maintain effective and strong relationship with suppliers. When
organisation has strong relationship with suppliers than they provide better quality materials to

the business at low prices that affects overall production and operation cost as well as
organisational profitability. As quality of final products are depends upon the raw material
quality so, it is necessary for respective organisation to build effective relationship to gain
various sustainable competitive advantage than its competitors.
How does the organisation (managers) mitigate supply chain risk and reduce supply chain costs?
As it is seen in today’s modernized world that supply chain risk mitigation may be hard or
inconvenient due to potential and globalization cyber interference. An input division of
IKEA’s achievement is attributed to its connections and connection management with
resources dealer and producer to get high-quality value on what it obtains. By calculate a
number of points the risk can be condensed in production.
Leverage the PPRR risk management model: The PPRR risk management is considered
a famous world wide supply chain risk management strategy and is used by retailers
around the world. The full form of PPRR is prevention, preparedness, response and
recovery.
(a) Avoidance- Organisations have to take a good safety measure for the supply chain
risk mitigation.
(b) Attentiveness- The organisations have to implement and develop a contingency
plan is any kind of the emergency happens.
(c) Reply- It should be on the priority bases of the organisation to carry out the
unforeseen event plan in order to reduce the crash of the disorderly event.
(d) Recuperation- the corporation have to carry on operation and get possessions
running at normal capacity as soon as potential.
Management of the environmental risk chain in the organisation: this is significant for the
organisations to avoid environmental risk in the bring chain, the organisation should make plan
in advance only (Gupta, 2019). Supply chain risk assessment software enables the organisations
to take a protective approach to risk management by provided that the organisation with the
greater visibility into the structure of the supply chain. It’s also important that you develop an
unforeseen event plan sometimes that’s come up a few times, now.
The cyber supply chain risk management: As it is seen that so many transaction company, the
things which be appropriate on the internet and the other digital technologies play a huge role in
optimizing supply chain operations, but they also leave the business exposed to cyber security