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Published: May 11, 2012

 
 

Suppliers Benefit from Having Just a Few Big Customers

Because efficiencies from collaboration and coordination along the supply chain don’t necessarily show up in conventional measures, managers and companies that focus too narrowly on gross margins may miss crucial financial implications about their relationships with major customers.

Bottom Line:
Suppliers with just a few major customers benefit from having a concentrated business base. The efficiencies they develop from collaborating across a supply chain more than counteract any loss in bargaining power with large customers. These dividends are reflected in a better bottom line and stock market performance.

 
 
 
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