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Chapter 9 Partnerships in the supply chain. 1. 2. 3. 4. 5. Choosing the right relationships. Partnerships in the supply chain. Supplier networks. Supplier development. Implementing Partnerships. Content. What types of relationships can be observed in supply chains?. 1.

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content

1.

2.

3.

4.

5.

Choosing the right relationships

Partnerships in the supply chain

Supplier networks

Supplier development

ImplementingPartnerships

Content
choosing the right relationships

What types of relationships can be observed in supply chains?

1

How can each type of relationship be tailored to different types of product?

2

Choosing the right relationships
  • Key issues
choosing the right relationships4
Choosing the right relationships

The essential of supply chain is collaboration

choosing the right relationships5

Inside system

Inter-organizational

Inter-personal

trust

Almost none

Vertical integration

Joint venture

Strategic alliance

Partnership

Arm’s-length

Choosing the right relationships

Relationship styles continuum

choosing the right relationships6

Bottleneck items

Strategic items

little

No. of available supplier

Non-critical items

Leverage items

large

weakness

strength

Buyer power

Choosing the right relationships

Reducing dependence on these items through diversification of suppliers and substitute products

Using strength carefully to draw suppliers into a relationship that ensures supply in the long term

Reducing prices and pushing for preferential treatment

Not jointly developed; Unbranded; Do not affect performance and safety in particular; have required low investment in specific tools and equipment

content7

1.

2.

3.

4.

5.

Choosing the right relationships

Partnerships in the supply chain

Supplier networks

Supplier development

ImplementingPartnerships

Content
partnerships in the supply chain

What are partnerships?

1

What are partnerships’ advantages and disadvantages?

2

Partnerships in the supply chain
  • Key issues
partnerships in the supply chain9
Partnerships in the supply chain
  • Lower level of collaboration results in information block and inefficiency
partnerships in the supply chain10
Partnerships in the supply chain
  • The characteristics of partnerships
    • Sharing of information
    • Trust and openness
    • Coordination and planning
    • Mutual benefits and sharing of risks
    • A recognition of mutual interdependence
    • Shared goals
    • Compatibility of corporate philosophies
partnerships in the supply chain11
Partnerships in the supply chain

Characteristics of partnership types

partnerships in the supply chain12
Partnerships in the supply chain
  • Economic justification for partnerships
    • Inter-firm relation-specific assets
      • Duration of safeguards
      • Volume of inter-firm transactions
    • Knowledge-sharing routines
      • Partner-specific absorptive capacity
      • Incentives to encourage transparency and discourage free riding
    • Complementary resources and capabilities
    • Effective governance
      • Employ informal governance mechanisms
partnerships in the supply chain13
Partnerships in the supply chain
  • Advantages of partnerships
    • Save cost of negotiations
    • Reduce monitoring of supplier soundness
    • Increase productivity
  • Disadvantages of partnerships
    • Inability to price accurately qualitative matters such as design work
    • Need for organizations to gather substantial information about potential partners on which to base decisions
    • Risk of divulging sensitive information to competitors
    • Potential opportunism by suppliers
content14

1.

2.

3.

4.

5.

Choosing the right relationships

Partnerships in the supply chain

Supplier networks

Supplier development

ImplementingPartnerships

Content
supplier networks

What are supplier associations?

1

What is Japanese Keiretsu?

2

Supplier networks
  • Key issues
supplier networks16
Supplier networks
  • Supplier associations
    • The network of a company’s important suppliers brought together for the purpose of coordination and development. Through the supplier association forum this company provides training and resource for production and logistics process improvements. The association also provides the opportunity for its members to improve the quality and frequency of communications, a critical factor for improving operational performance. (Aitken, 1998 )
supplier networks17
Supplier networks
  • Supplier associations
supplier networks19
Supplier networks
  • Japanese keiretsu
    • Japanese business consortia based on cooperation, coordination, joint ownership and control.
    • The keiretsu’s controlling base
      • Equity exchange between supply chain members
content21

1.

2.

3.

4.

5.

Choosing the right relationships

Partnerships in the supply chain

Supplier networks

Supplier development

ImplementingPartnerships

Content
supplier development23
Supplier development
  • Integrated processes
    • Collaborative planning and strategic development
      • New product development
      • Material replenishment
      • Payment
supplier development24
Supplier development
  • Integrated processes
supplier development25
Supplier development
  • Synchronous production
    • The approaches to improve synchronous supply chain processes
      • Transparency of information upstream and downstream
      • Vendor-managed inventory (VMI)
content26

1.

2.

3.

4.

5.

Choosing the right relationships

Partnerships in the supply chain

Supplier networks

Supplier development

ImplementingPartnerships

Content
implementing partnerships28
Implementing partnerships

Open market negotiations

cooperation

Coordination

collaboration

implementing partnerships29
Implementing partnerships
  • Barriers to build partnerships
    • Power
    • Self-interest
    • Focus on negative implications of partnership
    • Opportunism
    • Focus on price
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