Supplier relationship management (SRM) emphasizes collaboration with key suppliers, which can

lead to significant inventory reductions. The detailed explanation includes:

Collaborative Planning: Working closely with critical suppliers to synchronize production schedules

and inventory levels, aligning them with actual demand.

Improved Forecasting: Sharing accurate demand forecasts and sales data helps suppliers plan their

production more effectively, reducing the need for safety stock.

Just-in-Time (JIT) Practices: Implementing JIT practices where materials and components are

delivered precisely when needed, minimizing inventory holding costs for both the customer and the

supplier.

Vendor-Managed Inventory (VMI): Allowing suppliers to manage inventory levels based on real-time

data, ensuring optimal stock levels and reducing excess inventory.

Lean Practices: Adopting lean inventory management techniques to eliminate waste, streamline

processes, and enhance overall supply chain efficiency.

Reference

Dyer,

J. H., & Singh,

H. (1998). The Relational View: Cooperative Strategy and Sources of

Interorganizational Competitive Advantage. Academy of Management Review, 23(4), 660-679.

Christopher, M. (2016). Logistics & Supply Chain Management. Pearson UK.