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Supply Base Reduction

Looks like what's old is new again. IndustryWeek reports on the latest supply management tool referred to as "sustainable supplier structure". Perhaps the birth of a new acronym? What we have here is supply base reduction, the process of reducing the supply base in order to focus on core suppliers and increase leverage with them.

I am more of an advocate of supplier rationalization, or supplier optimization. Performing some level of commodity analysis to determine the right amount of suppliers. Supplier reduction for the sake of meeting a "performance number" is folly.

 

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