lrom 8elauonshlps Lo arLnershlps resenLed on 9/9/14

resenLed Lo CreaLer 8lrmlngham 8lack Chamber of Commerce 1

Irom ke|anonsh|ps to artnersh|ps

A Supp|y Cha|n Management erspecnve
by
Lr|c . Iack, hD
Dean, UA8 Co||at Schoo| of 8us|ness
Cverv|ew
! Supp|y Cha|n Management (SCM)
SCM 8aslcs
1ypes of 8elauonshlps
Pow 1oyoLa leverages SCM relauonshlps
! Manag|ng Strateg|c Supp||er ke|anonsh|ps
Lmplrlcal 8esearch from uA8 CollaL School of 8uslness
! Irom ke|anonsh|ps to artnersh|ps
1he challenges ahead. . .
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Supp|y Cha|n Management Mode|
Informanon ow
Manufacturer
D|str|butor
Customer
Customer
Customer
Customer
D|str|butor
1|er 1 mater|a|s
supp||er
1|er 1 mater|a|s
supp||er
1|er 1 serv|ce
supp||er
1|er 2 mater|a|s
supp||er
1|er 2 mater|a|s
supp||er
1|er 2 mater|a|s
supp||er
1|er 2 serv|ce
supp||er
1|er 2 serv|ce
supp||er
r|mary cash ow
r|mary product ow
keverse product ow
3
4
Supp|y Cha|n Management
(A Dehn|non. . .)
! 1he des|gn, p|ann|ng, execunon, contro|, and
mon|tor|ng of supp|y cha|n acnv|nes w|th the
ob[ecnve of:
Creaung neL value
8ulldlng a compeuuve lnfrasLrucLure
Leveraglng worldwlde loglsucs
Synchronlzlng supply wlLh demand
Measurlng performance globally
!"#$%&'() !++,-./0,1 2,3 45)3/0,1+ 6/1/7)8)19
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3
1op keasons to Cutsource
hup:]]www.atwor|dso|unons.com]arnc|es]top-ten-reasons-to-outsource.php
Conserve Capital,
3%
Grow Revenue, 4%
Increase Innovation,
3%
Improve Quality, 3%
Improve Skills, 9%
Focus on the Core
Business, 17%
Reduce Operating
Costs, 48%
Create a Variable
Cost Structure, 13%
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1ypes of ke|anonsh|ps |n SCM
Relationships
Characteristics
Proximity Visibility Competitors Communication Culture
Buy on the
Market
Arms length Purchase
requirements
Significant Computerized Not an
issue
Ongoing
Relationship
Medium-
term
Some sharing Some Designated
contact points
Aware
Partnership Longer-term Full sharing Limited Department
interaction
Aware +
adaptive
Strategic
Alliance
Long-term
relationship
Sharing + partners
plans as own
Limited or
none
Extensive, high
trust, licensing
Merging
Merger Ownership Internal, commonly
held data
None Varies One culture
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Aok|, k. & Lennerfors, 1., "1he New, Improved
ke|retsu," !"#$"#% '()*+,)) -,$*,./ 0,12,34,# 5678
! 1oyota has ga|ned tremendous|y from
the new ke|retsu w|th:
Suppller relauonshlps LhaL are more open,
global, cosL-consclous and sysLems-focused
?eL, lL has deepened Lhe LrusL, collaborauon
and educauonal supporL
Why are kelreLsu neLworks so durable?
" CosL, quallLy, lnnovauon and Anshln (peace of mlnd)
Managing Strategic Supplier
Relationships:
Antecedents and Outcomes
!ack, L. . and owers, 1. L. (2014)
forLhcomlng ln Lhe 9:(#+"; :< '()*+,)) "+%
=+%()2#*"; >"#?,@+A
lrom 8elauonshlps Lo arLnershlps resenLed on 9/9/14
resenLed Lo CreaLer 8lrmlngham 8lack Chamber of Commerce 3
Management of Strategic Supplier Relationships
(Wathne and Heide, 2000; Wilson, 1995)
! What?
ManagemenL of buslness-Lo-buslness relauonshlps:
" uslng sLraLegles LhaL conLrlbuLe Lo [olnL successes,
" selecung suppllers LhaL share slmllar goals,
" and worklng wlLh suppllers LhaL acL ln Lhe besL lnLeresL of Lhe rm
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Data and Methodo|ogy
! Data
Survey of 1430 u.S. reLall buslness owners/execuuves
" Small, medlum and large companles represenLed
?lelded 300 valld responses (21)
! Methodo|ogy
SLrucLural equauon modellng uslng arual LeasL Squares
10
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Demograph|cs of kespondents
ANNUAL SALES ($)
#
RESPONDENTS

# EMPLOYEES
#
RESPONDENTS
0 to $99,999 70

0 TO 99
195
$100,000 to $199,999 18

100 TO 499
23
$200,000 to $499,999 15

500 TO 999
10
$500,000 to $999,999 13

1,000 TO 4,999
29
$1,000,000 to $9,999,999 27

5,000 TO 9,999
11
$10,000,000 to $999,999,999 21

10,000 TO 99,999
21
> $1,000,000,000 11

> 100,000
4
Did not report 125

Did not report
7
TOTAL 300

TOTAL
300
Antecedents of Strateg|c Supp||er ke|anonsh|ps
! 1op Management Support
Leadershlp and sLraLeglc focus
! 1echn|ca| reparedness
1echnologlcally capable wlLh shared perspecuve on Lhe selecuon and
use of Lechnology
! 1rust
CharacLer, CompeLence/8ellablllLy
" 8ellef LhaL Lhe oLher parLy would acL ln Lhe besL lnLeresL of Lhe parLner (even lf
Lhere was no way of checklng or pollclng behavlor)
" 8ellef ln Lhe oLher parLy belng dependable/rellable
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Cutcomes
! roduct and Serv|ce ua||ty
Lhe end-user's percepuon of Lhe quallLy of Lhe producLs,
servlces, and repuLauon of Lhe rm
! I|nanc|a| performance
llnanclal beneLs from S8M and C8M
13
kLSUL1S
(!ack, L. . and owers, 1. L. (2014), Managlng SLraLeglc Suppller 8elauonshlps: AnLecedenLs and
CuLcomes," forLhcomlng ln Lhe 9:(#+"; :< '()*+,)) "+% =+%()2#*"; >"#?,@+A:
(R
2
=.21)
Top Management
Support
Trust
Product and
Service Quality
Outcomes
Financial
Performance
Strategic Supplier
Management
H4 (.46***)
H6 (.41***)
H1 (.38***)
Technological
Preparedness
H2 (.15**)
H3 (.47***)
H5 (.23***)
(R
2
=.65)
(R
2
=.31)
*** slgnlcanL aL .01 level
** slgnlcanL aL .03 level
lrom 8elauonshlps Lo arLnershlps resenLed on 9/9/14
resenLed Lo CreaLer 8lrmlngham 8lack Chamber of Commerce 8
Lxamp|e
13
r|mary cash ow
r|mary product ow
keverse ow
Informanon ow
SUMMAk: Irom ke|anonsh|ps to artnersh|ps
(the cha||enges ahead. . .)
! Lstab||sh |ong-term re|anonsh|ps w|th supp||ers
8ely on a few dependable (hlgh quallLy) suppllers
! Cons|der qua||ty as the number one cr|ter|on |n se|ecnng supp||ers
Pelp suppllers lmprove Lhelr quallLy
locus on conunuous lmprovemenL wlLh suppllers
Cerufy suppllers for quallLy
! Inc|ude key supp||ers |n strateg|c p|ann|ng
Solve problems [olnLly wlLh suppllers
Acuvely lnvolve suppllers ln producL developmenL
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uesnons?
17