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SOHELMUGAL ON WEB

30 JULY 2021

VENDOR
SUPPLIER
VENDOR MANAGEMENT
SUPPLIER MANAGEMENT
SUPPLY CHAIN MANAGEMENT
SUPPLIER RELATION MANAGEMENT

COMMON ACRONYMS
SRM, SCM

SOURCES OF INFORMATION/ COMMON STANDARDS OF PRACTICE
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DEFINITION
In Supply chain network, varous players in the chain, like Producers, Manufacturers, Vendors, Suppliers, Contractors, Third parties and Service providers, buy/ import products or services from manufacturers or agencies/ companies, manage the procurement, storage, quality, production and logistics, and then sell/ deliver to clients (businesses or consumers). While Supply Chain includes upstream and downstream, the Marketing Chain/ Channel focuses more on the downstream, whereby to increase value to the customer by having the right product in the right place at the right price at the moment the customer wants to buy.

CLASSIFICATION
Some definitions to differentiate the players are given below;

Vendor: A Vendor is normally at the bottom of the supply chain. A Vendor is considered to be involved in B2C (Business to Consumer). Vendors are typically in the business of selling/ providing items that can be inventoried, and not to be used as raw materials to make/ construct something else. Hence vendor relationships are usually focused on price comparisons, suitability, guarantees, response, and vendor performance. Examples would be vendors for providing bottled soft drinks to a restaurant or a grocery store.
Supplier: A Supplier is considered to be involved in B2B (Business to Business). Suppliers are typically in the business of selling/ providing raw materials to make/ construct something else. Supplier relationships are more attuned with how the supplier influences the quality of the product. Hence, the supplier is also considered a partner in the business, helping to enhance your company image while providing a mutually beneficial relationship. Examples would be suppliers for providing flour and sugar to a restaurant or a bakery.
Contractor: A contractor completes specific tasks/ projects (day to day), within agreed completion timelines, and which include dealing with vendors, suppliers, owned resources, rental resources, consultants, service providers and many more entities. A Contractor does not sell products or raw materials, but provides services which include procurement of products or materials or servcies to complete a project with all its requirements and deliverables. Examples would be a Contractor building a hosue for an owner or a road for a Government department.
Service Provider: A Service Provider does not sell/ provide products or raw materials but only solutions/ services to clients. Service Providers might or might not buy products and equipment to help them provide a service but they do not sell that product or equipment to the client. Service Providers work with contracts based on manpower rates, pay per use, or on-demand calls. Examples would be Internet Service Provider, Project Management Consultants, Design Companies or Housekeeping Services provider.
Third Party: A third party normally provides a service (not materials) and is involved in the supply chain transaction but is not as one of the principals/ parties in the contract. Third parties work on behalf of one or more or all individuals involved in a transaction. Third parties normally act as a neutral agency between the principals/ contracting parties. Examples would be Fire Safety Inspection Companies, a Debt Collections agency or Escrow.

WHY
Companies develop supply chains so they can remain competitive in the business landscape. Some benefits are given below;

Reliability/ Volatility
Costs
Efficiency
Professionalism

WHEN
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HOW
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EXAMPLES
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SOHELMUGAL ON WEB

This website is solely managed by Sohail Moughal as a personal research to understand, manage and archive various aspects of his work in his life. It is continuously being updated and developed, and the information at the time of viewing may be incomplete. It is personal to Sohail Moughal and any use of information by others does not make Sohail Moughal liable, guilty, responsible and/ or accountable for anything at all.