The result is far fewer suppliers in total. Involving suppliers during the early stages of product design can consistently provide high-quality products. Minimum investment and resources, such as buyer's time, travel, and engineering are needed when using a limited number of suppliers. The overall volume of items purchased is higher, which eventually leads to lower costs. The suppliers are more inclined to pay special attention to the buyer's needs, since the buyer represents a large account.
Buyers often provide tools to their suppliers.
Concentrating on only one supplier therefore saves a great deal of tooling costs. The establishment of long-term relationships. Production and Operations Management. Production and Operations Management. Manufacturing and services.