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Supplier Alliance Partnerships

Supplier Alliance Partnerships. Unit Tutor Dr Neil Towers Supply Chain Management N.Towers@manchester.ac.uk. Learning Objectives. Understand the relevance of strategic alliance partnerships Recognise the concerns and benefits of a strategic alliance. Working Definition.

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Supplier Alliance Partnerships

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  1. Supplier Alliance Partnerships Unit Tutor Dr Neil Towers Supply Chain Management N.Towers@manchester.ac.uk

  2. Learning Objectives • Understand the relevance of strategic alliance partnerships • Recognise the concerns and benefits of a strategic alliance

  3. Working Definition • Outsourcing is the delegation to a third party of the provision of an activity governed by a formal contract and/or service level agreement • It may involve the transfer of manpower, assets or intellectual property rights (BG Group Guidelines, 2000)

  4. Alliance Characteristics • Technology transfer • Increased communication channels • Intensity of use of comm. channels • Risk sharing of cost based on fairness

  5. Strategic Considerations • Core Activities • Products and Services • Core Competencies • Skills, Knowledge and Technologies

  6. Trust in buyer-supplier relationships • Goodwill trust • Developed mutual expectations • Competence trust • Operational reliability • Contractual trust • Abide by written or oral obligations Sako, 1992

  7. Factors affecting supplier alliance development • Desirability • Selecting appropriate targets for supplier alliances • Feasibility • Whether such a relationship is possible

  8. Asset specificity is the degree by which the skills are sunk within the business

  9. Alliance Concerns • Difficult to manage • Inappropriate relationship • Constrained by resource availability and ability to operate on basis of trust

  10. Alliance Benefits • Reduced transaction costs following initial development costs • Improved response times and service flexibility • Better access to technologies • Improve inter-firm boundaries

  11. References • McCutcheon, D and Stuart, F (2000) “Issues in choice of supplier alliance partnerships”, Journal of Operations Management,18, pp 279-301 • Sako, M (1992) Prices, quality and trust: inter-firm relations in Britain and Japan, Cambridge Univ. Press, Cambridge • Cox, A (1996) “Relational competence and strategic procurement management: towards an entrepreneurial and contractual theory of the firm”, European Journal of Purchasing and Supply Management, 2 (1) pp57-70

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