1 Supply Chain Management Chapter 5A: Forming Partnershi ps & Strategic Alliances Strategic Alliances and Partnerships • A long-term, mutually beneficialbusinessrelationship containing specific elementsunique to the relationship;• an agreement detailingperformancerequirementsand conditions, structuresto promote successfulinteractionbetween parties, • organizational alignment, clear measuresof success, and a high level ofmutualcommitmentCreating Closer Relationships Buyer -Supplier Relationships Spectrum of Buyer-Sup plier Relationships Antagonistic Collaborative Adversarial Cooperative Lose/Lose Win/Lose Win/Win Parties work actively against the needs of the other Neither party takes responsibility for anything that happens in the relationship Parties are engaged in competitive struggle Parties attempt to capture the maximum value for their side Parties realize the benefit of working together Closer relations are a result of mutu al goals Supplier input and involvemen t b egins to increase Congruence of goals exists Parties work together to satisfy the needs of each other and create new value Parties search for creative solutions jointly Neutral Arm’s Length Co-operative Collaborative Coordinated Joint Ventures Vertical Integration Partnerships Types of Relationships Vendor/ transactional Strategic Alliance Transactional/Arm’s Length Relationsh ips Characteristics An absence of concern about other party’s well- being One of a series of independent deals Costs, data and forecasts are not shared Price is the focus of the relationship A minimum of purchasing time and energy is required to establish prices Transactional purchases lend themselves to e- procurement