EDUCATION 101: Partnership Sourcing

PARTNESHIP SOURCING

Sourcing policies

 

Partnership sourcing has been defined as ‘a commitment by both customers and suppliers regardless of size to a long term relationship on clear mutually agreed objectives to strive for a world-class capability and competitiveness.

Reasons for seeking partnerships can include improvements in;

  • Design
  • Quality
  • Delivery and completion time
  • Production costs
  • Operating costs reduction
  • Stock levels
  • Cash flow
  • Skill and resource availability

ADVANTAGES OF PARTNERSHIP SOURCING

  • Emphasis on co-operation between purchaser and supplier
  • Consideration of total acquisition costs. Lowest price is never the sole buyer consideration.
  • Long term business relationships with the involvement of the supplier at the earliest possible stage.
  • Emphasis on quality assurance based on total quality management.
  • Emphasis on single sourcing- although it’s not of necessity, it will reduce the supplier base.
  • Emphasis on mutual trust between purchaser and supplier.

PROBLEMS OF PARTNERSHIP SOURCING

  • Termination of the relationship has to be undertaken over a period of time through an agreed separation plan.
  • Inequitable business shares that is possible domination by the customer or over-dependence on the supplier
  • Lack of confidentiality_ where prospective partners are also suppliers to competitors
  • Requires regular review of competitiveness through regular meetings.
  • Attitudes_ traditional adversarial buyers and sales people will require retraining to adjust to the new philosophy .
Advertisements

One thought on “EDUCATION 101: Partnership Sourcing

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s