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Ways of expressing procurement relationship

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- Partnership sourcing: This is a commitment to both customers and suppliers, regardless of size to a long-term relationship based on clear mutually agreed objectives to strive for world class capability. Partnership sourcing seeks to make improvements in areas such as: design, quality, delivery and completion times, production costs, operating costs, stocks levels cash flow etc.
- Reciprocal trading: This is a mutual exchange of buyer’s and supplier’s products of
advantages/privileges in commercial relations. It is selling through the order book when a policy is adopted of giving preferences to those suppliers who are also customers of the buying
company.
- Counter trade: This is a form of international reciprocal trade in which an order is placed by a purchaser to a supplier in another country on condition that goods of equal proportions will be sold in the opposite directions. The types of counter trade entail: Barter or Swap, counter purchase, Buy back, Switch trade and offset trade.
- Intra-company trade: This applies to large enterprise and conglomerates where the possibility
of buying certain materials from each group is made possible. The policy guideline may direct
buyers to purchase specified items exclusively from group members regardless of the price,
obtain quotations from group members who are evaluated against those of external suppliers
with the order being placed with the most competitive source whether internal or external.
- Sub-contracting: Sub-contracting entail means of augmenting limited resources and skills while enabling the contractor to concentrate on their main area of expertise. Sub-contracting relieves the main contractor of some duties and therefore being in a position to concentrate on
supervision. Also sub-contracting reduces cost on the part of main contractor as well as
attracting highly qualified and experienced experts to do the job. To this extent therefore both the main contractor and the sub-contractor should embrace a good relationship to ensure
smooth flow of the underlined activities.

Titany answered the question on November 24, 2021 at 13:10

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Ways of expressing procurement relationship

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