Question 4
It is sometimes argued that the supermarkets have developed new paradigms for effective supply chain management which many organisations in non-food manufacturing are attempting or would dearly love to emulate.
1. Develop closer relationships"There is no doubt that price is becoming less dominant in the produce purchase decision of most consumers. The ability to manage and invest in relationships is the core capability that underpins both the foundations, the first is the incentive structure and the second is the marketing capabilities of retailer and their supply network". (O'keeffe and Fearne, 2002).
2. Supermarket retailers are in most cases are considerably larger, than even the largest of their suppliers. The dynamics of power and dependency are central to supermarkets in helping raise quality standards. "This power means that the retailer has greater influence in the supply chain, as well as reducing costs through economies of scale. It also raises the stakes for suppliers and encourages greater co-operation between suppliers and distributors, because of there desire to retain business or gain new business among retailers" (Mintel, 2000). Integration upstream and downstream will lead to a more responsive supply chain, enabling a free flow of information up and down the supply chain.
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