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Purchasing has to work directly with suppliers to improve exiting capabilities or develop new capabilities.This is Called Vendor development.
Sharing production schedules and forecasts.
Developing closer buyer-seller relationships.
Example
A car manufacturer like Maruti Udyog had to develop its suppliers in order to indigenize its components. By working closely, the company was able to reduce reliance on overseas suppliers, reduce overall cost and improve on-time delivery. This was done by sharing production schedules and forecasts, working with suppliers to reduce non-value-added time in their processes, and helping them to improve the scheduling of deliveries.
Suppliers had to improve the scheduling processes, and do whatever was necessary to improve their delivery performance.
