Is it an advantage or disadvantage to source materials from manufacturers

Plamena Milusheva

Economics and computer science, 2022, issue 2, 23-26

Abstract: In the conditions of an unprecedented global crisis, which has affected all spheres of social, economic and political life in Bulgaria and the world, the awareness of where and from whom companies receive and will receive the raw materials, materials, goods, etc. they need is of crucial importance to prevent disruptions in supply chains. Deciding which vendor to go with is a strategic decision and requires good reasoning. In this regard, the aim of the article is, based on a study of literature sources, to derive advantages and disadvantages of working with a supplier-manufacturer and to draw conclusions based on information from a group of companies, regarding whether it is an advantage to work with a supplier-manufacturer compared to working with a middleman and if yes what are the established advantages. In accordance with the set goal, the present study targeted production and trading companies that operate on the territory of Bulgaria. The data for the study is collected during the period November 2021 - January 2022. 13 enterprises are covered, 6 of which (46%) are manufacturing and 7 (54%) are trading companies. Based on a literature review, the advantages and disadvantages of choosing a supplier-manufacturer over a supplier-intermediary are summarized. Based on collected information, the advantages of working with manufacturers have been put forward. It is noteworthy that for trading companies, the priority "lower price" when purchasing from a manufacturer is very often indicated by the interviewees, in contrast to manufacturing companies, which value most the possibility to order large quantities. With the current trends of digitization, restructuring of supply chains and the loss of trust between organizations, this type of information would serve researchers and specialists who make a choice of suppliers and take this complex decision that requires a competent and thorough analysis.

Date: 2022
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