Strategy On Relationship Selection Of Material Suppliers Based On Product Life Cycle

Since the beginning of the latter part of 20th century, the function and influence of entrepreneur procurement have been increased step by step. Especially, the past decade witnessed the noticeable increase in the interest of procurement by the firms. Established firms consider it as a vital strategy in their development. With the increasing widening and segmenting of market economy, together with the instilment and popularity of the concept of supply chain, it comes to people's mind that the management of business is no longer an independent and stable unit. So when an entrepreneur manager makes a decision, he or she will extend his or her thinking scope, which means not only he or she will consider the front end of the supply chain, but its tail end of sale as well. The thesis firstly analyzes the evolution of procurement function and status, and then presents current procurement strategies and varied theories on the management of relations to a firm's suppliers. Secondly, via the analysis of product's market life cycle in the strategies of product mix, it tries to seek that the different life cycle results in different requirement of manufacturing raw materials. At last, it points out the relevance between products and procurement on strategy. By the adjustment of procurement strategy, the thesis tries to find a kind of selective model for suppliers'relation management to balance the relation between supply and marketing so that it may reduce the risk of strategical procurement for firms at least cost. The model mix on material supplier relation based on the product's life cycle presented in the thesis has already taken some effect in its application to suppliers'management in AiJia Company. It proves applicable to firms by the analysis of the company's business characteristics, its former relations with suppliers and the effect of adjusted relations. Being a procurement manager, however, we are consciously aware that the business of procurement needs further improvement in the practical work as it is also influenced by other factors, namely, the business characteristics, the product's technical contains, the entrepreneur's cultural identity and its values and the political environment.