PDF | Develops the concept of time-based competitive strategies within the context of development of supplier relationships and evaluation systems which . Add value and build mutually beneficial relationships with customers, suppliers, competitors and complementors in your industry using the Value Net Model. Instead of competing, try collaborating with another company. Relationships with vendors or suppliers are also key places to cultivate.
This type of arrangement frees up resources on both sides for more productive uses and achieves better outcomes. But like a good marriage, a mutually beneficial supplier relationship requires effort. And nor should you. Supplies that warrant investment in a strategic supplier relationship meet specific criteria.
Trust and transparency At supply chain trailblazer Intermountain Healthcare, a hospital system headquartered in Salt Lake City, Utah, the key ingredient to building more collaborative supplier relationships is trust.
Joe Walsh, assistant vice president of category management at Intermountain, told my colleagues in the Health Care Advisory Board that he tells all of his suppliers that he will trust them unless he is given a reason not to. When hospitals and suppliers agree on the numbers, getting to the next level of collaboration is that much easier.
How to take supplier relationships from competitive to collaborative
In most such instances, suppliers help buyers by pointing out ways in which designs can be improved or more desirable materials can be used. Improvements in product quality. In addition to providing design recommendations that result in improved products, suppliers are often sources of suggestions that allow buyers to hold consistent tolerances in production. Improvements in "speed to market.
Reductions in total product cost, either through streamlining of work processes inventory management, new product design, scheduling, etc.
Improvements in customer satisfaction. Analysts indicate that suppliers receive some benefits in the emerging purchasing dynamic as well. Reduced paperwork, lower overhead, faster payment, long-term agreements that lead to more accurate business forecasts, access to new designs, and input into future materials and product needs have all been cited as gains.
Other observers, meanwhile, point out that some buyer-supplier relationships have become so close that suppliers have opened offices on the site of the buyer, an arrangement that can conceivably result in even greater improvements in productivity and savings.
What Teaming Up With Another Company Can Do For Your Business
Of course, companies are not going to form such "partnerships" with all of their suppliers. Some form of the traditional purchasing process involving bidding and standard purchase orders and invoices will continue to exist at almost every company, and especially at smaller companies that do not have the financial clout to pressure suppliers for price or delivery concessions. But many management consultants and business experts contend that even those businesses that are not ideally positioned to create partnerships with suppliers can benefit from the establishment of effective supply chain management practices.
Buyer-seller alliances unleash a capacity for innovation that far outweighs the short-term cost savings offered by arm's-length competitive bidding. Businesses should explain their overarching needs to several dedicated suppliers and open lines of communication with them rather than simply defining their requirements and waiting for a flurry of bids that are primarily—or exclusively—concerned with submitting the lowest bid.
Potential Drawbacks of Supplier Partnerships Establishing close relationships with suppliers, though, means that buyers have to conduct the necessary research to make sure that they select the right companies. Today's emphasis on partnerships is contingent on suppliers who can become part of a whole supply system.
In fact, major suppliers need to be critically screened and evaluated before they are brought into any supply chain system. Thriving small-and mid-sized businesses that are already well-established will be better able to take on such tasks than will fledgling businesses, but even start-ups should take the time to learn more about their suppliers than their prices. Of course, desired supplier traits vary somewhat depending on who is being surveyed.
For example, design engineers tend to place the most weight on product quality when analyzing suppliers, while purchasing professionals place greater importance on cost considerations in conjunction with product quality.
How to take supplier relationships from competitive to collaborative | The Advisory Board Company
Criteria to be evaluated will also vary depending on product category. The objective of all evaluations is the same: To compare all potential suppliers in a market segment to determine the one best qualified partner with whom to work. The evaluation of potential suppliers should include an assessment about whether the supplier is suited to assist the purchaser to meet its prime business objectives. Typical the objectives to which the supplier should provide assistance include inventory reduction, quality improvement, elimination of paperwork, and improved handling of incoming goods.J-Lo & A-Rod Are Really in Love
Poor supplier performance is not the only risk a purchaser faces in situations where it has linked with a bad supplier. Not only do they have engaged couples try out all of their dishes, they also have on hand local florists, photographers, wedding location coordinators, and wedding planners. In this scenario, by acting as a one-stop shop for couples, every vendor wins.
Another good example of a geographic alliance is the local coffee shop that displays an impressive arrangement of fresh flowers on its front counter, provided by a florist located just a few doors down. Relationships with vendors or suppliers are also key places to cultivate alliances. Clint gets to meet with potential new clients, while TurboSonic gets to show off its products without having to open a showroom.
Think of it as networking with a purpose.
First, look for a common customer or audience. Then, answer the following questions for your potential partner: What can we package together to save money? How can we work together to expand our reach?