lesson 6 purchasing

© Alan Harrison and Remko van Hoek 2008

Slide 9.1

Working together

Purchasing and supply relationships


Slide 9.2

Purchasing and supply relationships

• Choosing the right relationship

• Partnerships in the supply chain

• Supply base rationalisation

• Supplier development

• Implementing partnerships


Slide 9.3

Figure 9.1 Relationship styles continuumSource: After Cooper and Gardner, 1993


Slide 9.4

Choosing the right relationship


Slide 9.5

Partnerships in the supply chain

Is based upon:

• the sharing of information

• trust and openness

• coordination and planning

• mutual benefits and sharing of risks

• a recognition of mutual interdepence

• shared goals

• compatibility of corporate philosophies


Slide 9.6

Do you think this is easy?

Why – or why not?


Slide 9.7

Disadvantages of partnerships

• inability to price accurately qualitative matters such as design work

• the need for organisations to gather substantial information

• choosing the wrong partner

• risk of giving sensitive information to competitors

• potential opportunism by suppliers

• other things?


Slide 9.8

Supplier base rationalisation

Reduce number of suppliers to develop high-intensive relationships – is difficult with many suppliers

Supplier management deals with organising the soursing of materials and components from a suitable set of suppliers


Slide 9.9


Slide 9.10

Supplier associations

• the network of a company´s important suppliers brought together for the purpose of coordination and developement.


Slide 9.11

Table 9.1 Primary objectives for establishing and developing supplier associations


Slide 9.12

Table 9.1 Primary objectives for establishing and developing supplier associations (Continued)


Slide 9.13

Supplier development

• It is important that the partnerships develop – hence the choosen suppliers needs to develop

• Integrated processes – alignment of critical processes

• Synchronous production


Slide 9.14

Implementing strategic partnerships

• What makes it a challenge?


Slide 9.15

Implementing strategic partnerships – cont.

• Power structure is not equal

• Buyers highligts risk

• Opportunism from either partner

• Self-interest

• Focus on price


Slide 9.16

Task

• Based upon the Vestas case – what do you think will be Vestas purpose and goals of meeting their suppliers?

i.e. Consider powerstructure in the supply chain

You have 15 minutes – and then discussion

lesson 6 purchasing

Marketing