--- To enhance the value and performance of procurement and SCM practitioners and their organizations worldwide ---



NAPM InfoEdge
November 1996, Vol. 2 No. 3

Managing Successful Supplier Alliances


Table of Contents
  • Developing the Alliance Members Only Content
    Since the beginning of time, competition has been a driving force of commerce. Between supplier and supplier, and even between supplier and purchaser, competitive forces have shaped the way we do business. However, in the late twentieth century, rapid change has brought about an evolution in business in which the nature of competition has become more precisely defined. In certain strategic situations, the competition between purchaser and supplier is counter-productive. Instead, two organizations with different orientations are brought together, so that an alliance with key suppliers will yield mutual long-term competitive benefits. This approach to supplier development can advance any organization: the general concept can be used by small and medium-sized organizations alike. The amount of structure will vary, but the key is to have the appropriate level of support from senior management across the organization.

  • Furthering the Alliance Program Members Only Content
    Because alliances are formed to achieve long-term goals, assessing new opportunities for improvement is continuous. When opportunities cease to be identified, the organization may consider dissolving or reclassifying the alliance. A formal supplier alliance program (see box below) should be put in place, designed to:

  • Measuring the Success of the Program Members Only Content
    Performance measurements are crucial to a supplier alliance to provide regular feedback on successes and failures, a prompt for learning, and a benchmark for continuous improvement. Senior management must be involved in developing the primary performance indicators that will enable the alliance to be evaluated against established objectives.


AUTHOR(S)

Connie Q. Veates, C.P.M.
Connie Veates is Director of Supply Chain Management with BellSouth Telecommunications, Inc. in Atlanta, Georgia. She has extensive experience in both marketing and procurement, and has led teams to optimize the supplier base as well as develop long-term strategic relationships with key suppliers. Ms. Veates holds an M.B.A. degree from Georgia State University and is an adjunct faculty member of Shorter College.

Courtney E. Lee
Courtney Lee is a Supplier Alignment Leader of Supply Chain Management with BellSouth Telecommunications, Inc. in Atlanta, Georgia. Her diverse background includes hardware and software design, as well as managing a major customer relationship program as a member of the technical staff of AT&T Bell Laboratories. At BellSouth, Ms. Lee has worked on developing and managing relationships with key suppliers in addition to optimizing the supplier base. Ms. Lee holds B.S. and M.S. degrees in electrical engineering from Tuskegee University and the Illinois Institute of Technology, respectively.



REFERENCES
  • Best's Review, January 1994, "Technology Helps to Cut Purchasing Program Costs"
  • Hendrick, Thomas, Ph.D. and Ellram, Lisa Ph.D., C.P.M. Strategic Supplier Partnering: An International Study, Center for Advanced Purchasing Studies, 1993
  • International Journal of Purchasing and Materials Management, Spring 1995, "Problem Sources in Establishing Strategic Supplier Alliances "
  • NAPM Insights, January 1993, "Strategic Partnering for Strategic Purchasing"
  • NAPM Professional Development Series: Partnering Pitfalls and Success Factors, "Purchasing for Bottom Line Impact — Improving the Organization Through Strategic Procurement," Volume IV, Irwin Professional Publishing, 1995
  • NAPM 78th Annual International Purchasing Conference Proceedings, "Defining Strategic Alliances: Life Cycle Patterns," National Association of Purchasing Management, 1993
  • NAPM 80th Annual International Conference Proceedings, "The Reality of Strategic Relationships: Ten Keys to Success," National Association of Purchasing Management, 1995
  • Quality Digest, March 1993, "10 Keys to Successful Supplier Relations"


FOR FURTHER READING
  • Chain Store Executive, January 1994, "Partnering with Vendors: The Ties That Bind"
  • Chrysler Organization's Annual Report 1994, "Chrysler's Extended Enterprise: More Than an American Keiretsu"
  • International Journal of Purchasing and Materials Management, Winter 1995, "Problem Sources in Establishing Strategic Supplier Alliances"
  • Moody, Patricia. Breakthrough Partnering - Creating a Collective Enterprise Advantage, John Wiley & Sons, 1993
  • NAPM Insights, March 1995, "Life Cycle of Strategic Alliances"
  • NAPM 78th Annual International Purchasing Conference Proceedings "Beyond Strategic Alliances: Fusion Relationships," National Association of Purchasing Management, 1993
  • Purchasing Today™, January 1996, "Seven Keys to Developing Trust"
  • Siemens, Newbridge Alliance Press Release, August 20, 1996, "Siemens, Newbridge Form Alliance to Speed Availability of High Speed, ATM-Based Broadband Communication Networks"
  • Transportation and Distribution, April 1995, "Winning Together"

Back to Top