005 - Partnership and Alliances in Supermarket Supply Network

7/24/2019 005 - Partnership and Alliances in Supermarket Supply Network

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Chapter 5:

PARTNERSHIP &ALLIANCES IN SUPERMARKETSUPPLY NETWORK

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FOOD SUPPLY CHAIN .DCA2023

BACHELOR IN CULINARY

ARTS

SHCA


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Key Concepts

A Transformation in Relationshis T!es of "#!er$S#lier Relationshis

Transa%tional Relationshis

Collaorati'e an( Allian%e Relationshis Collaorati'e Relationshis

S#l! Allian%es

The S#lier)s Perse%ti'e

*e'eloin+ an( Mana+in+ Collaorati'e

an( Allian%e Relationshis

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A Transformation in Relationships

The transformation from rea%ti'e an(me%hani%al #r%hasin+ to roa%ti'e

ro%#rement an( on to strate+i% S#l!

Chain Mana+ement e,#i'alents a similar

transformation in relationshis et-een#!ers an( s#liers

Prior to the ./01s most #r%hasin+

relationshis -ere rea%ti'e Intera%tion et-een 'en(or an(

#r%hasin+ res#lte( in o#t%omes -here

one2s +ain -o#l( e the other2s loss

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Problems with the Term Partner

*#rin+ the late ./012s an( earl! .//12s34artnershis5 e%ame o#lar

Imli%ations of the term 4artner5 -ere not

-ell #n(erstoo(

Le+al rolems an( %on%erns ine'ital! arose

While the term 4artnershi5 is still

relati'el! %ommon3 -e a'oi( #se of the

term referrin+ the terms 4%ollaorati'erelationshi5 an( 4strate+i% allian%e65

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Three Types of Buyer Supplier Relationships

Transa%tional7 Ps!%holo+!6 an intera%tion of an in(i'i(#al -ith one or

more other ersons3 ese%iall! as infl#en%e( ! their

ass#me( relational roles of arent3 %hil(3 or a(#lt6

Transa%tions3 the #lishe( re%or(s of the ro%ee(in+s3as aers rea(3 a((resses (eli'ere(3 or (is%#ssions3 at

the meetin+s of a learne( so%iet! or the li8e6

Collaorati'e7 Pro(#%e( or %on(#%te( ! t-o or

more arties -or8in+ to+ether6

Allian%e7 A #nion or asso%iation forme( for m#t#al

enefit3 ese%iall! et-een %o#ntries or

or+ani9ations6 5-5


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ontinuum of Buyer-Seller Relationships

Continuum !arietry" of Buyer#Seller

Relationships

:i+#re ;$.

CommunicationCompetitive Adv.ConnectednessContinuous Impr.Contributions to NPD

Difficulty of ExitDurationExpeditingFocusLevel of Integration

High pot. for problems Systematic approachLow HighIndependence InterdependenceLittle A focusFew Many ESI

Low ifficult high impactShort Long!eacti"e #roacti"e#rice $otal costLittle or none High or total

A%ti'it!


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ontinuum of Buyer-Seller Relationships

Continuum of Buyer#Seller Relationships

Number of uppliers!pen "oo#s$uality%elations

%esourceservice&ared Forecastsupply Disruptions'ec&nology Inflo(s'ype of Interaction

Many %ne or few&o 'esIncoming inspection esign (uality in systemInward loo)ing *oncern w+well being

Few low s)ill le"el #rofessionalMinimal ,reatly impro"ed&o 'es#ossible -nli)ely&o 'es$actical Strategic synergy

A%ti'it!


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Transactional Relationships Characteristics

An asen%e >la%8? of %on%ern One of a series of in(een(ent (eals

Costs3 (ata an( fore%asts are not share(

Pri%e is the fo%#s of the relationshi A minim#m of #r%hasin+ time an( ener+!

is re,#ire( to estalish ri%es

Transa%tional #r%hases len( themsel'esto e$ro%#rement

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A$%anta&es of Transactional Relationships

Relati'el! less #r%hasin+ time an( effort

are re,#ire( to estalish ri%e Lo-er s8ill le'els of ro%#rement

ersonnel are re,#ire(

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'isa$%anta&es of Transactional Relationships

Potential for %omm#ni%ation (iffi%#lties E@e(itin+ an( monitorin+ of in%omin+ ,#alit!

Infle@ile -hen fle@iilit! ma! e re,#ire(

Ten( to res#lt in more (eli'er! rolems

#alit! -ill e onl! as +oo( as re,#ire(

S#liers ro'i(e the minim#m ser'i%e re,#ire(

Less effe%ti'e erforman%e ! s#liers

C#stomers are s#Be%t to more s#l!(isr#tions

S#lier is not moti'ate( to in'est time an(

ener+! (e'eloment of #!er2s ro(#%ts

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Collaborati%e an$ Alliance Relationships

4D of CEO2s thin8 e@ternal %ollaoration

-ith #siness artners an( %#stomers is8e! to inno'ation5

Collaorati'e an( allian%e relationshis

ten( to res#lt in lo-er total %osts an(

imro'e erforman%e of the s#l! %hain

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Three Success (actors

Resear%hers Stanle! an( Pearson fo#n(that the three most imortant fa%tors in a

s#%%essf#l #!er$s#lier relationshi

are7

>.? t-o$-a! %omm#ni%ation3

>F? the s#lier)s resonsi'eness to s#l!

mana+ement)s nee(s3 an(

>G? %lear ro(#%t se%ifi%ations

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Collaborati%e Relationships

T!i%all! #se( for the ro%#rement of non$

%ommo(it! items an( ser'i%es

A %ollaorati'e relationshi fre,#entl! isan aroriate first ste on the roa( to a

strate+i% allian%e

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Collaborati%e Relationships

Collaorati'e relationshis ten( tofoster6

Lon+er term %ontra%ts

Re(#%tion of ris8 for s#liers

Re(#%in+ total %osts

Imro'ement of ro%esses

Imro'ement of ro(#%ts

In%rease( in'estment in R & *

In%rease( in'estment in trainin+

In%rease( in'estment in e,#iment

"etter fo%#s on %#stomer nee(s 5-14


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Supply Alliances

The f#n(amental (ifferen%e et-een

%ollaorati'e relationshis an( s#l!

allian%es is the resen%e of instit#tional

tr#st in allian%es

The fail#re to (e'elo an( mana+e

instit#tional tr#st is the rin%ile reason

that so man! s#l! allian%es fail

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Benefits of Supply Alliances

Lo-er total %osts6

Re(#%e( time to mar8et Imro'e( ,#alit!

Imro'e( te%hnolo+! flo- from s#liers

Imro'e( %ontin#it! of s#l!

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Alliance Attributes

Contin#o#s imro'ement

Inter(een(en%e an( %ommitment6

Atmoshere of %ooeration Informal interersonal %onne%tions

Internal infrastr#%t#res to enhan%e learnin+

Oenness in all areas of the relationshi

A li'in+ s!stem

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Alliance Attributes Continue$

A share( 'ision of the f#t#re

Ethi%s ta8e re%e(en%e o'er e@e(ien%!

A(atale in the fa%e of %han+e *esi+n of e@eriments an( s#lier

%ertifi%ation

Win$Win ne+otiations E@e%#ti'e le'el %ommitment

A'oi( terms that %o#l( ro'e (estr#%ti'e

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)hich Relationship is Appropriate*

What are the 4Strate+i% Elements of a Relationshi5

Are there man! relati'el! #n(ifferentiate( s#liers

ro'i(in+ -hat amo#nts to inter$%han+eale

%ommo(ities *oes the otential s#lier ossess e%onomi% o-er

-hi%h it is -illin+ to emlo! o'er its %#stomers

If there is re%o+nition ! oth arties of the otential

enefits of an allian%e3 #t a(e,#ate ,#alifie( h#manreso#r%es are not a'ailale at one or oth firms

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Strate&ic +lements of a Relationship

Is one s#lier hea( an( sho#l(ers ao'e the

rest in terms of the 'al#e it ro'i(esJ in%l#(in+

ri%e3 inno'ation3 ailit! to a(at to %han+in+

sit#ations3 %aa%it! to -or8 -ith !o#r team3 tas8

Boint ris8s3 et%

Are some s#liers 4strate+i%5 to !o#r #siness

Wo#l( !o#r %oman! enefit +reatl! if the

s#lier -ere more 4inte+rall! %onne%te(5 -ith!o#r %oman!

*o !o#r %#stomers re,#ire hi+h (e+rees of

fle@iilit! an( see( of resonsi'eness

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The Supplier,s Perspecti%e

S#lier2s -ant +oo( %#stomers Se'eral iss#es affe%t their assessment3

amon+ them are7

Cash :lo-

Oenness an( Aroa%hailit!

A'ailailit!

Professionalism

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Situations )herein Alliances may not be

Appropriate

Stailit! Pri%e olatilit! >instailit!?

*eman( olatilit! >instailit!?

Hi+h S-it%hin+ Li8elihoo( -ith Hi+h S-it%hin+ Costs

Caailit! No Partnershi


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Situations )herein Alliances may not be

Appropriate applicable"

Cometition Non$Cometiti'e Mar8et

S#lier *een(en%! Creation

Ne+le%te( Areas

S#liers See8in+ to Re(#%e Cometition

"enefits

No le'era+e >%ontrol? from Partnershi

No Har( Sa'in+s from Partnershi

Internal "#!$In

No Internal C#stomer "#!$In

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The Role of Power

Po-er is a toi% that ma8es eole#n%omfortale

Po-er is at the heart of all #sinessrelationshis

Po-er la!s a 8e! role in t-o imortants#%lasses of #!er$s#lierrelationshis7

Cati'e "#!er7 #!er is hel( hosta+e ! a

s#lier free to s-it%h to another %#stomer Cati'e S#lier7 ma8es in'estments in or(er

to se%#re a ortion of the #!er)s #siness3-ith no ass#ran%e of s#ffi%ient #siness to

re%o# the in'estment 5-24


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The Portfolio Approach

S#%%essf#l s#l! %hain mana+ement

re,#ires the effe%ti'e an( effi%ient

mana+ement of a ortfolio of relationshis

Three en'ironmental fa%tors to %onsi(er7

>.? the ro(#%t e@%han+e( an( its te%hnolo+!3

>F? the %ometiti'e %on(itions in the #stream

mar8et3 an( >G? the %aailities of the s#liers a'ailale

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-ew S.ills an$ Attitu$es Re/uire$

*e'eloin+ an( mana+in+ %ollaorati'e

an( allian%e relationshis re,#ire s#l!

rofessionals that ossess the follo-in+

s8ills an( attit#(es7

Re%o+ni9e the enefits of %ollaoration

Ailit! to i(entif!3 otain an( #se (ata

Ale to -or8 in %haos an( #n%ertaint! A+ile3 fle@ile3 an( hi+hl! a(ati'e

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+#Commerce an$ the Ri&ht Type of

Relationship

Ho- (oes "F" eCommer%e affe%t o#r

sele%tion of the )ri+ht) t!e of

relationshi4

Sele%tion m#st e a f#n%tion of the

re,#irement3 not of the Internet

"F" eCommer%e is an enaler

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+#Commerce Traps to A%oi$

Tra .7 il(in+ the i+

Ta8e an ar%hai%3 %#mersome ro%#rement

ro%ess an( 4-ei9e5 it

Tra F7 The Ma+i% ill

Loo8in+ for the one sol#tion that %an e #se(

to sol'e e'er! ro%#rement sit#ation

Tra G7 S#lier e,#alit! S#lier relationshis ran+e from

transa%tional to allian%es

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INSTITUTIONAL

TRUST

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Trust

Tr#st is one of the 8e! fa%tors that(ifferentiates the three %lasses ofrelationshis6

The simlest (efinition of tr#st is 4ein+

%onfi(ent that the other art! -ill (o -hatit sa!s it -ill (o65

Some le'el of tr#st m#st e resent in allthree t!es of relationshis

The le'el of tr#st in%reases -ith%ollaorati'e relationshis an( e%omesan essential %hara%teristi% -ith strate+i%allian%es

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Attributes 0 +lements of 1nstitutional Trust

*e'eloe( o'er time Internal tr#st is (e'eloe( efore e@ternal

tr#st

"ase( on in(i'i(#al an( instit#tional

inte+rit! It is +reater than in(i'i(#al tr#st6

Tr#st an( relationshi are 'ie-e( as

in'estments Partners ha'e a%%ess to other)s strate+i%

lans

Rele'ant %osts an( fore%asts are share(5-31


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When 8e! in(i'i(#als lea'e3 fin+errintsare left ehin( that hol( the relationshis

to+ether

Tr#st is 'isile

Informal a+reements are as +oo( as

-ritten

"oth arties are sensiti'e to the %#lt#ral

ri(+e

Relationshi is a(atale in the fa%e of

%han+e

"oth firms re%o+ni9e the inter(een(en%! 5-32


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Sharin+ information is a means of (e'eloin+

tr#st

Confli%t in the relationshi is oenl! a((resse(

Ri+hts3 (esires3 an( oinions are %onsi(ere(

:irms ha'e m#t#al +oals

A bank accountof tr#st is %reate(

Re%o+ni9es tr#st has (ifferent %#lt#ral meanin+s

"oth CEO)s ma8e a ersonal in'estment Senior mana+ers from oth firms %ommit

Ethi%al iss#es are freel! ro#+ht # -itho#t fear

An om#(sman is assi+ne( at oth firms5-33


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Actions to 'e%elop an$ 2ana&e Trust

An inter$firm team is aointe(

*is%#ssions %on(#%te( in an atmoshere ofrese%t

Inter$firm team re%ei'es +#i(an%e an( trainin+ inthe imlementation of ra%ti%es

Listenin+3 #n(erstan(in+3 time3 ener+! arein'este(

Senior lea(ers at oth firms a%t as %hamions

A %omm#ni%ation s!stem is (e'eloe(

A%tions to (e'elo an( meas#re tr#st are %reate(

Ris8s an( re-ar(s are a((resse( oenl!

Ne+otiation is #se( as a tr#st$#il(in+

oort#nit! 5-34


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Actions to 'e%elop an$ 2ana&e Trust

"oth firms -or8 to+ether on te%hnolo+! lans

Te%hni%al ersonnel from oth firms 'isit the

other

Contra%t#al relations are (esi+ne( to enhan%e

tr#st Contra%t relations fo%#s on %ontin#o#s

imro'ement

Team an( relationshi s8ills are (e'eloe( earl!

Coman! lea(ers %reate a formal relationshi

A %ontra%tin+ hilosoh! an( a le+al

infrastr#%t#re are (esi+ne( to the relationshi

Instit#tional tr#st is meas#re( an( mana+e( 5-35


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The Alliance 3ptions

Mer%hant s#lies the total ro(#%t6

Self$man#fa%t#re -ith 8e! ra- material

s#liers6

In$ho#se lant oerate( ! a s#lier6

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005 - Partnership and Alliances in Supermarket Supply Network

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