Syllabus: Pearson Edexcel GCSE Business
Module: Making Operational Decisions
Lesson: 2.3.2 Working with Suppliers

Introduction

Every business relies on suppliers, but managing these relationships effectively can be the difference between thriving and struggling. This topic helps students understand how businesses control their stock, work with suppliers, and manage logistics to maintain efficiency and competitiveness. While students might initially see stock control as just a technical process, connecting it to real businesses they know makes the topic immediately relevant. After all, whether it’s a local café running out of coffee beans or a global manufacturer implementing just-in-time delivery, supplier relationships impact every aspect of business operations.

Key Concepts

Working with suppliers involves several interconnected elements that students need to understand:

Stock control methods: Bar gate stock graphs provide a visual way to manage stock levels, showing maximum stock level, minimum (buffer) stock, reorder level, and lead time. Understanding these graphs helps businesses avoid both stockouts and excess inventory.

Just-in-time (JIT) stock control: This approach minimizes storage costs by having materials delivered exactly when needed for production. While reducing storage costs and improving cash flow, JIT requires reliable suppliers and carries risks if deliveries are delayed.

Procurement: Getting the right supplies from the right supplier involves balancing cost, quality, delivery reliability, availability, and trust. Each factor impacts business performance differently, and the ideal balance varies by industry and business model.

Logistics: The movement of materials and products through the supply chain affects costs, reputation, and customer satisfaction. Efficient logistics systems ensure products arrive where and when they’re needed.

Real-World Relevance

When teaching this topic, real examples bring supplier relationships to life:

Supermarkets demonstrate sophisticated stock control systems, using technology to track sales and automatically reorder products when they reach predetermined levels. Students can discuss how these systems help reduce waste while ensuring shelves remain stocked.

The automotive industry pioneered just-in-time manufacturing, with components arriving at factories just as they’re needed for assembly. This approach reduces storage costs but requires extremely reliable suppliers. The 2021 global semiconductor shortage showed what happens when JIT systems face supply chain disruptions.

Local businesses provide accessible examples of supplier relationships. A café owner might describe how they select coffee suppliers based on quality, reliability, and price, and how they manage stock to avoid running out while preventing waste of perishable items.

How It’s Assessed

Exam questions typically ask students to:

• Interpret bar gate stock graphs, identifying key elements like reorder levels and lead times
• Evaluate the advantages and disadvantages of just-in-time stock control for different business scenarios
• Analyze how procurement decisions affect business performance
• Explain how logistics impacts costs, reputation, and customer satisfaction
• Apply these concepts to case studies of real businesses

Students often struggle with calculating reorder quantities and understanding the trade-offs between different stock control methods. Practice with bar gate stock graphs and scenarios comparing traditional stock control with JIT helps develop these skills.

Enterprise Skills Integration

This topic develops several transferable enterprise skills:

Decision-making: Weighing the pros and cons of different stock control methods and supplier relationships develops analytical thinking.

Problem-solving: Identifying potential supply chain issues and developing contingency plans builds resilience.

Negotiation: Understanding what makes a good supplier relationship helps students develop negotiation skills applicable in many contexts.

Risk management: Evaluating the risks of different stock control methods teaches students to balance efficiency against security.

Careers Links

Understanding supplier relationships opens doors to careers including:

• Procurement manager – selecting suppliers and negotiating contracts
• Supply chain analyst – optimizing the flow of materials through a business
• Logistics coordinator – ensuring products move efficiently between locations
• Inventory controller – managing stock levels to balance availability against costs
• Purchasing officer – buying materials and components needed by the business

Many students don’t realize that procurement and logistics offer dynamic career paths with competitive salaries. Highlighting how these roles combine analytical skills with relationship building can spark interest in these careers.

Teaching Notes

Engagement Strategies

• Supermarket visits where students identify stock control methods in action
• Simulation games where student teams manage inventory for a virtual business
• Guest speakers from local businesses discussing their supplier relationships
• Case studies of supply chain disruptions (like the toilet paper shortages during the pandemic) and how businesses responded

Common Misconceptions

Students often think: * Just-in-time is always better than traditional stock control – help them understand each has appropriate applications * Stock control is only relevant to manufacturing – emphasize that service businesses also manage inventory * Choosing suppliers is just about finding the lowest price – discuss the importance of quality, reliability, and other factors

Differentiation Approaches

• Visual learners benefit from animated bar gate stock graphs showing stock levels changing over time
• For higher ability students, introduce global supply chain concepts and ethical sourcing
• Support lower ability students by using familiar examples like fast food restaurants to explain stock control

Assessment For Learning

Quick checks for understanding: * Identify elements on a bar gate stock graph * List advantages and disadvantages of JIT for different business scenarios * Explain how poor supplier relationships might affect a business

Remember that students often find this topic more engaging when they can relate it to businesses they know and products they use. The concepts might seem technical initially, but once students see the real-world applications, they quickly grasp how central supplier relationships are to business success.