Every effort is made to establish a partners-in-profits relationship with Suppliers. Suppliers need to be convinced that their well-being is intimately tied to the well-being of the buyer.
to help reduce the uncertainty in demand for the supplier and establish the mutual confidence and trust needed in such a relationship, lean manufacturers emphasise long-term contracts that stipulate prices and acceptable quality levels.
Long-term contract also reduce dramatically the number of orders placed, which helps to drive down the ordering and receiving costs.