9_Partnerships in the supply chain.ppt

8/14/2019 9_Partnerships in the supply chain.ppt

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Chapter 9

Partnerships in the

supply chain


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Content

Choosing the right relationships1.

Partnerships in the supply chain2.

Supplier networks3.

Supplier development4.

ImplementingPartnerships5.


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Choosing the right relationships

Key issues

1What types of relationshipscan be observed in supply

chains?

2How can each type of

relationship be tailored to

different types of product?


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The essential of supply chain is collaboration


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trust

Arms-length

PartnershipStrategic

alliance

Almostnone

Inter-

personal

Insidesystem Inter-

organizational

Joint

venture

Vertical

integration

Relationship styles continuum


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Bottleneck

items

Non-criticalitems

Leverageitems

Strategic

items

weaknesslarge strength

little

Buyer power

No.of

availablesupplier

Reducing dependence on

these items throughdiversification of suppliers

and substitute products

Using strength carefully to

draw suppliers into arelationship that ensures

supply in the long term

Not jointly developed; Unbranded;

Do not affect performance and

safety in particular; have required

low investment in specific tools ande ui ment

Reducing prices and pushing

for preferential treatment


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Content



Supplier networks3.




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Partnerships in the supply chain

1What are partnerships?

2 What are partnershipsadvantages anddisadvantages?

Key issues


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Lower level of collaboration results ininformation block and inefficiency


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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


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Partnership

typeActivities Time horizon

Scope of

activities

Cooperation Fewer supplier;

Longer-term contract

Short-term Single functionalarea

Coordination Information linkages;

WIP linkages;

EDI exchange

Long-term Multiple functional

areas

Collaboration Supply chain

integration;

Joint planning;

Technology sharing

Long-term with

no fixed date

Firms see each

other as

extensions of their

own firm

Characteristics of partnership types


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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


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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 tobase decisions

Risk of divulging sensitive information tocompetitors

Potential opportunism by suppliers


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Content



Supplier networks3.




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Supplier networks

Key issues

1What are supplierassociations?

2 What is JapaneseKeiretsu?


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Supplier networks

Supplier associations The network of a companys important

suppliers brought together for the purpose ofcoordination and development. Through the

supplier association forum this companyprovides training and resource for productionand logistics process improvements. Theassociation also provides the opportunity for

its members to improve the quality andfrequency of communications, a critical factorfor improving operational performance.(Aitken, 1998 )


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Supplier networks

Supplier associationsAutomaker Founding year Total members (1990)

Toyota

Kyohokai

1939 229

Nissan

Takarakai

Shohokai

1954

1966

174

Mitsubishi

Kashiwakai

1971 262

Mazda

Yokokai

1981 180

Isuzu

Kyowakai

1962 284


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Supplier networks

Japanese keiretsu Japanese business consortia based on

cooperation, coordination, joint ownership

and control.

The keiretsus controlling base

Equity exchange between supply chain members


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Supplier networks


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Content



Supplier networks3.




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Supplier development

Key issue

1How can upstream supplyprocesses be integrated to

improve material flow?


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Integrated processes

Collaborative planning and strategic

development New product development

Material replenishment

Payment


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Integrated processes


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Synchronous production

The approaches to improve

synchronous supply chain processes

Transparency of information upstream and

downstream

Vendor-managed inventory (VMI)


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Content



Supplier networks3.




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Implementing partnerships

Key issue

1What are the barriers toachieving partnerships in

the supply chain?


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Implementing partnerships

Barriers to build partnerships Power

Self-interest

Focus on negative implications of partnership Opportunism

Focus on price

9_Partnerships in the supply chain.ppt

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