Suppliers

All organizations require resources  funds, energy, equipment, services, and materials  to produce a product or service that succeed in the marketplace. Suppliers are organizations that provide these resources. Their outputs are the buyer organization's inputs  and therefore can significantly affect the quality, cost, and timeliness of the buyer's product or service. A buyer organization is vulnerable to several potential supplier problems, such as low materials quality or a supplier's financial crisis or labor strike that prevents the buyer from receiving essential materials.

Because of these potential problems, many organizations reduce their dependence on any one source by spreading their purchases of raw materials and other needed resources across several suppliers. They make sure that the materials they need are standardized and thus can be made by many suppliers. Some companies have gone further, becoming their own suppliers by backward vertical integration. These companies manufacture at least some of the raw materials needed to produce the final product or service. This strategy is costly to implement, but it offers the advantages of greater control over materials cost, quality, and delivery.

However, a growing number of companies in some industries are opting for single sourcing, relying on one supplier for particular parts and materials. At Ford Motor Company and General Motors Corporation, over 98 percent of the purchased materials and parts are single sourced. All steering wheels for a particular model, for example, are provided by one supplier. Companies who are single sourcing are willing to risk greater dependence for the higher materials quality they believe the strategy provides. With fewer suppliers, a company can work more easily with a vendor to boost materials quality. With a guaranteed larger volume of purchases, a supplier is more willing to invest in the production equipment that boosts materials quality. Single sourcing also provides greater consistency in materials, and it affords more flexible production scheduling because, with fewer suppliers, a buyer can more easily coordinate production schedules.

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Management at different levels

It is useful to think of management as being divided into three levels.

Supervisory managers are persons who directly oversee the efforts of those who actually perform the work. Most supervisory managers have titles like supervisor, foreman, lead man, or office manager. Department heads at universities are typically considered to be supervisory managers because they oversee the activities of professors, who actually do the jobs of research and teaching. For example, the person responsible for a particular store is a supervisory manager.

Middle managers are managers above the supervisory level but subordinate to the firm's most senior executives.

These persons might be department managers, division directors, area managers, or plant managers. A firm can have a number of levels of middle managers; for example, a district manager may be in charge of ten restaurants. Division or area managers may be responsible for a number of district managers.

Top managers are the organization's most senior executives. They usually include the chairman of the board and the president, along with vice-presidents who are responsible for major subdivisions of the organization. Top managers are responsible for providing the overall direction of the firm.

In summary, a manager is anyone, at any level of the organization, who directs the efforts of other people. Wherever a group of people work together to achieve results, a manager is usually present. A manager is the catalyst who makes things happen. The manager establishes goals, plans operations, organizes various resources – personnel, materials, equipment, capital – leads and motivates people to perform, evaluates actual results against the goals, and develops people for the organization. To be effective, a manager must possess and continually develop several essential skills.

There are three categories of skills important to a manager's overall effectiveness.

The relative significance of each skill varies according to form of management, but the best managers recognize that they must develop and practise each of the managerial skills to be effective in accomplishing organizational and personal goals. They dare not concentrate their efforts on only one of these skills, even though it may be the most important one at their level in the organization. It is the combination of skills that is vital to managerial success.