As the chief procurement of a joint venture in Abu Dhabi and having trading partner in the USA I should have a wide range of relationships with the suppliers for my company to run smoothly. First I have to ensure that there is a high quality of information exchange. This greatly helps me to have the adequate information about my suppliers and the terms that are applicable in carrying out the business. Such information may include; the prevailing taxes, allowances and also the cost of getting the goods into my business.
Another thing I put into consideration is the trust between my company and the supplier. There must exist a close relationship built on trust so that when I order the supplies am assured that I receive quality goods with no counterfeits. It also enables the company to get the required components on credit due to the trust that exists.
Openness is also a crucial economic spectrum since my business is carried out distantly. Each of us should be aware of every transaction that takes place to have the assurance in trade. This helps reduce exploitation, for example am aware that the components that import from China are relatively cheap.
Since my business is carried out at a distance I should evaluate all the risks involve and be able to manage them to avoid losses. Such may be; wrong pricing, scarcity of the supplies and also loss of goods during transit. As the manager I should ensure that there is correct pricing, ensure that there is a steady flow of goods without shortage and most importantly insure the businesses to cover for immediate risks.
My supplier is distant because according to my research I have found out that purchasing these locomotive components is relatively cheap especially from the countries that I deal with; that is, China and Germany. Thus I prefer carrying out my business distant.
Alchian, A., A., And Demsetz, H., 1972, “production, Information Costs, and Economic Organization”, The American Economic Review, Vol. 62, PP. 777-795.