Chapter 5A - Partnerships

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1 Supply Chain Management Chapter 5A: Forming Partnershi ps & Strategic Alliances Strategic Alliances and Partnerships A long-term, mutually beneficial business relationship containing specific elements unique to the relationship; an agreement detailing performance requirements and conditions, structures to promote successful interaction between parties , organizational alignment, clear measures of success, and a high level of mutual commitment Creating Closer Relationships Buyer -Supplier Relationships Spectrum of Buyer-Sup plier Relationships Antagonistic Collaborative Adversarial Cooperative Lose/Lose Win/Lose Win/Win Parties work actively against the needs of the other Neither party takes responsibility for anything that happens in the relationship Parties are engaged in competitive struggle Parties attempt to capture the maximum value for their side Parties realize the benefit of working together Closer relations are a result of mutu al goals Supplier input and involvemen t b egins to increase Congruence of goals exists Parties work together to satisfy the needs of each other and create new value Parties search for creative solutions  jointly Neutral Arm’s Length Co-operative Collaborative Coordinated Joint Ventures Vertical Integration Partnerships Types of Relationships Vendor/ transactional Strategic Alliance Transactional/Arm’s Length Relationsh ips Characteristics An absence of concern about other party’s well- being One of a series of independent deals Costs, data and forecasts are not shared Price is the focus of the relationship A minimum of purchasing time and energy is required to establish prices Transactional purchases lend themselves to e- procurement

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