1) The document discusses keys to effective buyer-seller relationships such as synergies, clear expectations, shared values and vision, understanding each other, and expecting changes. 2) Synergies can be found through collaborations between competitors and other industries to reduce costs and access new markets. 3) Clear expectations are important in strategic partnerships and franchises to ensure consistency and quality. That concludes the summary of the key points from the document in 3 sentences.

1. Secrets of
Highly
Effective
Buyer-
Seller
Relationship
s
ARIBA
Commerce Summit 2011
Murillo Xavier

2. Business & Personal Relationships
Long Find
Term
Goals
Evalua
Collab
oratio Personal te Expecta
&
n
Compl Business tions
ex
Relati
onship
Simple
Learn & Partne
rship
Adapt Short
Term
2
Goals

3. Keys for Effective Relationships
 Synergies
 Clear expectations
 Similar Values &
Vision
 Know your Partner
 Expect changes
3

4. Synergies
4

5. Synergies in the Cement Industry
Cement industry characteristics:
• Cement has low value density
(high volume and low cost).
• Logistics may represent up to 80%
of Supply Chain cost.
• Capital intensive factories.
• Network of distribution centers.
5

6. Synergy with Competitors
DC Company B
Plant
Company A
Plant
Company B
DC Company A
Savings in Logistics by supplying products to
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each other’s distribution center.

7. Synergy with Other Industries
„ Transforming costs into
profits
„ Eco-trend
7

8. Synergies
 Leverage overhead
 Demand aggregation
 Supply assurance
 Combined expertise and technology
sharing
 Complementing portfolio of
products and services
 New channels, new markets
 Any others form of collaboration
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advantageous for all the parts

9. Clear Expectations
9

10. Expectations in Strategic Partnerships
2007 ‟ The Eco-Shape Bottle
(12.4g)
2009 ‟ The New Eco-Shape
Bottle (9.2g) „ NWNA cut 35% or 240 MM lbs
of plastic resin per year
„ 20% less energy to be
produced
„ Plastic and cardboard
savings translate into 1,400
10
tons fewer CO2 emissions,

11. Expectations in Franchises
1967 - The Burger King franchising
system:
 System failed in providing a
consistent company image.
 No audit on their franchises and
only a small field staff for
franchise support.
 The chain was noted for
inconsistency in both food and
service
 McDonald's approach was to
lease stores to franchiseeschain that aimed to
 Major flaw in a
and demand a high customers by assuring them
attract degree of
11 uniformityof what to expect in every Burger
in return

12. Defining Expectations
 Roles & Responsibilities
 Financial arrangements
 Decision making process
 Growth rate
 End game for the
partnership (e.g., to be
acquired, to grow into a
powerhouse, etc.)
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 Others

13. Values & Vision
13

14. Values & Vision
 Social Responsibility
 Diversity
 Community
Involvement
 Transparent and
Ethical Behavior
14  Environmental

15. Values & Vision
LOHAS) - Lifestyles
of Health and
Sustainability
Wal-Mart goals
 $290 billion U.S. include:
marketplace
 utilizing 100%
 13-19% of the adults renewable energy,
in the U.S.
 Goods and services  creating zero waste,
focused on:
 selling products that
- Health sustain our resources
- Environment and environment.
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- Social justice

16. Values & Vision
J&J seek suppliers that share their commitment to:
 Comply with applicable legal requirements
 Behave ethically and with integrity
 Integrate quality into business processes
 Treat people with dignity and respect
 Promote the safety, health and well-being of
employees
 Operate in an environmentally responsible
manner and
 Implement management systems to ensure
ongoing performance and continual improvement
Since establishing their standards in 2006, 98% of
16 the external manufacturers have been assessed

17. Know your Partner
17

18. Companies & Strategies
 Market conditions affect companies in
different ways. Examples observed in
the 2009 recession:
„ Better results during the
market crash (people trade-
down)
„ Procurement focus on
maintaining capacity
„ Pet food segment was less
affected during the crash.
„ Just like baby products,
these sales have emotional
connection.
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19. Companies & Strategies
„ Concerns about economic
situation of their bottling
partners.
„ Profits were down 3% in
2009.
„ Profits were down 3%
in 2009.
„ Intensify product
innovation to overcome
the effects of the
19
adverse market

20. Companies & Strategies
„ Luxury Market ‟ more
resilient
„ Not competing in price
„ Not affected by Private Label
„ Sales in the Leather & Fashion
for Luxury items increased by
11% in 2009
„ Mid market leather retail
20

21. Expect Changes
21

22. New Information Era
Peak Break-Up Times
According to Facebook status updates
David McCandeless & Lee Byron source: searches for “we broke up because”
InformationIsBeautiful.net Taken from infographic ultrabook
The Visual Miscellaneum

23. New Decision Making Models
http://www.google.org/flutrends/
23

24. The World is Changing
“When did you realize the
world is flat?”
Thomas Friedman
24

25. Complex Landscape with Rapid and
Significant Changes
 Globalization
Headqua
 New markets rters Strategic
Partners
 New entrants Call
Center
 New channels
Supplier
 New technologies
s Direct
Marketin
 Consolidation g
Manufact Web
 Convergence urer Infrastruc
Transpor ture
 Market saturation tation
Overnigh
 Eroding customer Delivery
t Distribut
loyalty or
 e-business Database
Data
and
 Eco-trends mining Retailers
Customer
Infomediary and
 New regulations
Outsourced Service s
25
Products Regulati
ons

26. Future of the Buyer-Seller Relationship
 From Tactical to
Strategic
 From Products to
Solutions
 Metrics
 Communication
 Early Supplier
Involvement
 Outsourcing
 New Skill Set

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