Tài liệu tiếng Anh (cao học) Chapter 4 A portfolio of relationships

Tài liệu tiếng Anh (cao học) Chapter 4 A portfolio of relationships, dành cho cao học

Chapter 4

A Portfolio of

Relationships

• New Skills and Attitudes Required

• E-Commerce and the “Right” Type of

Relationship

• Relationships of the Future

A Transformation in Relationships

• The transformation from reactive and

mechanical purchasing to proactive

procurement and on to strategic Supply

Chain Management parallels a similar

transformation in relationships between

buyers and suppliers

• Prior to the 1980s most purchasing

relationships were reactive

Problems with the Term “Partner”

• During the late 1980’s and early 1990’s,

“partnerships” became popular

» Implications of the term “partner” were not

well understood

» Legal problems and concerns inevitably arose

• While the term “partnership” is still

relatively common, we avoid use of the

term preferring the terms “collaborative

relationship” and “strategic alliance.”

Three Types of Buyer Supplier Relationships

• Transactional

• Collaborative

• Alliance

Continuum of Buyer-Seller Relationships

Activity/Attribute Transactional Collaborative Alliance

Continuum of Buyer-Seller Relationships

Incoming inspection Design quality in system

Activity/Attribute Transactional Collaborative Alliance

Figure 5-1 Continued

Transactional Relationships Characteristics

• An absence of concern

• 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

Advantages of Transactional Relationships

• Relatively less purchasing time and effort

are required to establish price

• Lower skill levels of procurement

personnel are required

Disadvantages of Transactional Relationships

• Potential for communication difficulties

• Expediting and monitoring of incoming quality

• Inflexible when flexibility may be required

• Tend to result in more delivery problems

• Quality will be only as good as required

• Suppliers provide the minimum service required

• Less effective performance by suppliers

• Customers are subject to more supply disruptions

• Supplier is not motivated to invest time and

energy development of buyer’s products

Collaborative and Alliance Relationships

• “76% of CEO’s think external collaboration

with business partners and customers is

key to innovation”

• Collaborative and alliance relationships

tend to result in lower total costs and

improve performance of the supply chain

Three Success Factors

• Researchers Stanley and Pearson found

that the three most important factors in a

successful buyer-supplier relationship

are:

» (1) two-way communication,

» (2) the supplier's responsiveness to supply

management's needs, and

» (3) clear product specifications

Collaborative Relationships

• Typically used for the procurement of

non-commodity items and services

• A collaborative relationship frequently is

an appropriate first step on the road to a

strategic alliance

Collaborative Relationships

• Collaborative relationships tend to foster….

» Longer term contracts

» Reduction of risk for suppliers

» Reducing total costs

» Improvement of processes

» Improvement of products

» Increased investment in R & D

» Increased investment in training

» Increased investment in equipment

» Better focus on customer needs

Supply Alliances

• The fundamental difference between

collaborative relationships and supply

alliances is the presence of institutional

trust in alliances

• The failure to develop and manage

institutional trust is the principle reason

that so many supply alliances fail

Benefits of Supply Alliances

• Lower total costs

• Reduced time to market

• Improved quality

• Improved technology flow from suppliers

• Improved continuity of supply

Alliance Attributes

• Continuous improvement

• Interdependence and commitment.

• Atmosphere of cooperation

• Informal interpersonal connections

• Internal infrastructures to enhance

learning

Alliance Attributes Continued

• A shared vision of the future

• Ethics take precedence over expediency

• Adaptable in the face of change

• Design of experiments and supplier

certification

• Win-Win negotiations

• Executive level commitment

• Avoid terms that could prove destructive

Which Relationship is Appropriate?

• What are the “Strategic Elements of a Relationship?”

• Are there many relatively undifferentiated suppliers

providing what amounts to inter-changeable

commodities?

• Does the potential supplier possess economic power

which it is willing to employ over its customers?

• If there is recognition by both parties of the potential

benefits of an alliance, but adequate qualified human

Strategic Elements of a Relationship

• Is one supplier head and shoulders above the

rest in terms of the value it provides; including

price, innovation, ability to adapt to changing

situations, capacity to work with your team, task joint risks, etc?

• Are some suppliers “strategic” to your business?

• Would your company benefit greatly if the

supplier were more “integrally connected” with

your company?

• Do your customers require high degrees of

flexibility and speed of responsiveness?

The Supplier’s Perspective

• Supplier’s want good customers

• Several issues affect their assessment,

among them are:

» Openness and Approachability

» Availability

» Professionalism

Questions to be Addressed Before Proceeding

• Is there a danger that the supplier may act in an

opportunistic manner over time?

• Do electronic systems allow for optimum

communication and sharing of information?

• Is the potential strategic alliance able to stay

current in the industry?

• Are both the organizations willing to keep

attention focused on the joint customer?

• Are there other suppliers worth investigating

before committing to a strategic alliance?

Questions to be Addressed Before Proceeding

• Is the organization proud to be aligned and

associated with the supplier?

• Is the organization comfortable with the level of risk

associated with reducing the supply base?

• Are both supplier and buyer aligned in what their

ultimate customer considers to be valuable?

• If there is substantial risk for the supplier to develop

new technologies, products, processes, or service support?

• Are both supplier and buyer aligned in their

Situations Wherein Alliances may not be

» No Partnership/Alliance-Capable Supplier for the Item

» No Partnership/Alliance-Capable Supplier in the

Geographic Area

» Rapid Technological Change

» Mismatch of Clock Speed

Situations Wherein Alliances may not be

» No leverage from Partnership

» No Hard Savings from Partnership

The Role of Power

• Power is a topic that makes people

uncomfortable

• Power is at the heart of all business

relationships

• Power plays a key role in two important

subclasses of buyer-supplier relationships:

» Captive Buyer: buyer is held hostage by a

supplier free to switch to another customer

» Captive Supplier: makes investments in order to

secure a portion of the buyer's business, with

no assurance of sufficient business to recoup

the investment

The Portfolio Approach

• Successful supply chain management

requires the effective and efficient

management of a portfolio of relationships

• Three environmental factors to consider:

» (1) the product exchanged and its technology,

» (2) the competitive conditions in the upstream

market, and

New Skills and Attitudes Required

• Developing and managing collaborative

and alliance relationships require supply

professionals that possess the following

skills and attitudes:

» Recognize the benefits of collaboration

» Ability to identify, obtain and use data

» Able to work in chaos and uncertainty

» Agile, flexible, and highly adaptive

E-Commerce and the “Right” Type of

Relationship

• "How does B2B eCommerce affect our

selection of the 'right' type of

relationship?“

» Selection must be a function of the

requirement, not of the Internet!

E-Commerce Traps to Avoid

• Trap #1: Guilding the pig

process and “webbize” it

• Trap #2: The Magic pill

» Looking for the one solution that can be used

to solve every procurement situation

• Trap #3: Supplier equality

» Supplier relationships range from

transactional to alliances

Chapter 4

Appendix

INSTITUTIONAL

TRUST

• Trust is one of the key factors that

differentiates the three classes of

relationships

• The simplest definition of trust is “being

confident that the other party will do what

it says it will do.”

• Some level of trust must be present in all

three types of relationships

• The level of trust increases with

collaborative relationships and becomes

an essential characteristic with strategic

alliances

Attributes of Institutional Trust

trust

integrity

• It is greater than individual trust.

investments

Attributes of Institutional Trust

• When key individuals leave, fingerprints

are left behind that hold the relationships

Attributes of Institutional Trust

Actions to Develop and Manage Trust

respect

the implementation of practices

Actions to Develop and Manage Trust

trust

improvement

The Alliance Options

• Merchant supplies the total product.

• Self-manufacture with key raw material

suppliers.

• In-house plant operated by a supplier

Supply Management in

Action

A SUPPLIER

ALLIANCE AT

Merchant Supply Rejection

• Absence of lower cost alternative

merchant supply (freight cost hurdle).

• No known way to gain effective cost

understanding/cultural improvement with arms length relationship (lack of both

parties’ commitment).

Self-manufacture Rejection

• Not a core competency.

• Supplier’s cost of capital was generally

lower than Quaker’s –best to use their

money.

In-house Plant Choice

• Best cost –no freight, direct feeding of

filling line eliminated palletizing, fresher

materials.

• Best opportunity to institutionalize

continuous improvement Alliance

relationship comes from the open book

need to drive improvement Quaker and

Graham (the selected supplier) agreed to

act as one company on each other’s

behalf.

Type of Contract:

• Evergreen from one fixed period to

another.

• Completely open book

• Cancelable for failure to perform.

END