working with suppliers

• Stock


  items held by a firm for use or sale. Also called inventory
• Bar gate stock graph


  a diagram to show changes in the level of stock over time.
• Maximum stock level


  highest level of stock to be held by a business
• Minimum stock level 


  also called buffer stock level. The lowest level of stock held to avoid running out.
• Re-order level


  the level of stock that will trigger the business to order more
• Lead time


  number of days or weeks that it takes from ordering stock until it arrives
• Order quantity 


  the number of items ordered by the business
• JIT


  Just in time. Running the business with so little stock that supplies have to arrive 'just in time' before they run out
• JIC


  just in case. holding buffer stock levels, 'just in case' there is a sudden increase in demand
• Procurement 


  obtaining the right supplies from the right supplier
• Logistics 


  ensuring that the right supplies will be ordered and delivered on time
• The operations department has a role to ensure that there is enough stock to meet demand, so they must work closely with suppliers as we as managing the stock that is in the business effectively.
• Benefits of JIT

  • less storage space needed saving costs
  • fresher produce sue to more frequent deliveries
  • less capital tied up in stock
• Limitations

  • greater risk of running out and disappointing customers
  • no bulk-buying discounts
• Suppliers can have a significant impact on a businesses costs, flexibility, reliability and customer relations.
• What makes a good supplier

  • a good price(value for money)on products and delivery
  • flexible deliveries
  • reliable deliveries
  • discounts for large orders
  • high quality suppliers
  • availability of products (short lead times)