107supplier relationship

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107supplier relationship

  1. 1. Supplier relationships
  2. 2. Supplier Relationships Definition of a Relationship Relationship Marketing “ A Connection or Association” Relationship Purchasing Long-term Strategy 1 Not one Sale at a Time! 2 Long-term Strategy 1 Secures Mutual Benefits 2 Requires Focus 3
  3. 3. Table 7.1 Main differences between transactional and relationship purchasing Supplier Relationships Focus on supplier retention Long-term orientation Closeness Complex, including internal relationships Emphasis on improving price, quality, delivery and other factors such as innovative design as a collaborative exercise between purchaser and supplier High supplier contact, with each contact being used to gain information and strengthen the relationship Significant sharing of information including cost information, transparency Reverse auctions generally inapplicable Focus on short, discrete purchasing Short-term orientation Arms length Simple buyer/seller relationship Emphasis on price, quality and delivery in the offered product No innovation Moderate supplier contact Little sharing of information; opaqueness Reverse auctions may be applicable Relationship Transactional
  4. 4. Discuss <ul><li>What types of supplier relationship IBM would develop and maintain with Keytronic? </li></ul><ul><li>To what extent are these relationships useful? </li></ul>
  5. 5. Relationship Formation Five Aggregation Levels Actions Episodes Sequences Relationships Partner base 1 2 3 4 5 - Individual initiatives - Groups of interrelated actions - More extensive entitles of interactions - All sequences that comprise in one relationship - Relationship portfolio Supplier Relationships
  6. 6. The Cox Model Core competencies Partnership relationship Arms length Adversarial Preferred supplier Single sourcing Network sourcing Strategic alliances Internal contracts – mergers, acquisitions A step-ladder of external and internal contractual relationships Supplier Relationships
  7. 7. Discuss <ul><li>Determine suitable supplier relationship strategies Paul should use for ‘DimS’ product. You may like to consider the most effective supplier relationship structure in a high volume manufacturing industry. </li></ul><ul><li>Explain briefly the various supplier relationship strategies (Cox’s model, page 226-229) </li></ul><ul><li>Determine the strategies </li></ul><ul><li>Justify your answer </li></ul>

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