Talking Business - Strategic Alliances

There has always been and will be conflict in the supply chain, no matter what industry is in question. That, I believe, will continue to be true. More times than I can remember, I have presented my keynote presentation titled, The New Era of Manufacturer/Distributor Cooperation at either manufacturing or distribution association meetings.

In doing my research for these presentations, the supply chain partners usually claim that they communicate well with each other. Unfortunately, that rarely proves to be the case. Through collaborative relationships, supply chain partners can improve.

To build efficient and productive relationship with any supply chain partner, important thing that will definitely help to improve the level of communication is an ability to understand a value that your supply chain partner has to receive from that relationship. One good example of this is that a procurement department can be in position to believe that a supply partner could lower the price in such way that they can not make any profit. And that is just ridiculous.

If you make an effort to understand the total value your supply partner needs and help them to receive that total value package, they will perceive you as a great partner and communication will become easier. I am not suggesting that you give away the bank, but rather only put your energies into activities, services, and so forth that delivers the value to your supply partner that they want.

Supply Chain Improvements

Just-in-time inventory purchasing and supplying as exemplified by the famous relationship between Wal-Mart and Procter & Gamble has continued to prove successful. Another example are Dell Computers and Home Depot that have built a strong strategic alliance with the justi-in-time inventory that is so much cost saving. You could also apply this in your business. You can develop closer relationships with your supply chain partners.

You and your partner should share the same strategy, and that is a very important issue. Conflicts and complaints must be of highest priority and promptly responded to. It is one of the best ways to improve the trust and build up loyalty betwenn you and your strategic partner.