Sustaining strategic supplier alliances

Ian Stuart and David McCutcheon

International Journal of Operations & Production Management

1996, Vol. 16, No. 10, 5-22

 

1)      Supplier alliances

  1. a) Dynamic relationships, so require dynamic governance
  2. b) Older partnerships develop wider involvement and produce better results
  3. c) Alliances can maintain some degree of control over external work
  4. d) Prerequisites for alliance formation:
  5. i) Similar strategic and organizational objectives
  6. ii) Similar values and philosophies

iii)     The partner’s ownership of technical resources which can assist the other

  1. iv) A willingness to share information
  2. v) A belief that collaboration is mutually beneficial
  3. vi) A measurement system to share and assess the benefits
  4. e) 3 stages to developing cooperative relationships
  5. i) initializing
  6. ii) processing

iii)     reconfiguration

2)      Hypotheses

  1. a) Productivity gains attributed to the alliance relationship will improve over time
  2. b) Competitive advantage attributed to the alliance relationship will improve over time
  3. c) Productivity gains attributed to the relationship varies with the strength of the alliance
  4. d) Competitive advantage attributed to relationship varies with the strength of the alliance

3)      Findings

  1. a) Only weak support for time’s effect on improving results
  2. i) They may improve, but not necessarily more so than normal buyer-supplier relationships
  3. b) The degree of alliance could be predicted by the purchasing philosophy
  4. c) The degree of alliance could predict the purchasing philosophy

4)      Dynamic requirements for building alliances

  1. a) Trust is key
  2. b) Commitments increase through movement towards single-sourcing
  3. c) Information exchange is key
  4. i) Planning information

(1)   Better information about demand helps the other part to plan better

  1. ii) Performance feedback

iii)     Technological assistance

5)      Key points

  1. a) Willingness to share important information is a primary basis of trust, without which the alliance is unlikely to succeed
  2. b) Performance feedback may increase commitment
  3. c) Long-run success is dependent on a two-way flow of information