The debate about “partnership” and “partnering” has always left me slightly bemused. It seems pretty self-evident that, depending on the type of organisation and industry you work in and the nature of the supply chain that supports it, there will be some instances where it makes sense to develop closer, longer-term relationships with suppliers, and others where it doesn’t. Yet today I still hear people talking as if partnership were an all-or-nothing concept – life as black and white, rather than shades of grey.
Of course, the other thing that has given partnership a bad name over the past 10 years is the belief that “cosiness” comes at a high price. (To which my retort is: only if you let it.) So it’s hardly surprising that people have turned to other words. “Collaboration” is regarded by many as a sexier alternative – and a more strategic one, to boot – which just goes to show how word connotations can change from negative to positive over time (assuming, that is, you don’t view your suppliers as the enemy).
In this third issue of CPO Agenda, we have a special focus on strategic relationships. Each of the four articles takes a different theme, but all start from the premise that building and developing strong links with key suppliers can be a powerful contributor to either competitive advantage or efficient service delivery, and something that raises the procurement function to a higher level.
US consultant Jonathan Hughes argues that if you truly value these suppliers, then you need to measure not only the quality of their products, but also the quality of the relationships you have with them. This, he admits, is far harder than measuring price or cost. Nonetheless, on the basis that what gets measured gets managed, if collaboration is strategically important to your business, ways and means will be found.
Professors Carlos Cordon and Tom Vollmann, from the IMD business school in Switzerland, explain the fascinating findings of their initial research into what makes customers “attractive” to suppliers. As they note, the very concept is alien to many purchasing managers, who have long worked on the basis that “when we call, you come running”. While that approach may be appropriate in some supply markets, in others it is a sure way to give your rivals the upper hand.
Staying with research, Andy Davies explores what makes public-private partnerships, of the kind used widely in UK government, successful. He concludes, based on his interviews with managers at both clients and contractors, that a highly legalistic approach is inferior to one built on trust and strong personal relationships.
Last, but by no means least, Professor Andrew Cox attacks the concept of “win-win” – one that he argues has become as misused and as meaningless as the term partnership itself. Critics may regard this as a classic case of academic hair-splitting, but, with the ever-present danger of complacency in long-term relationships, it provides valuable food for thought.
Geraint John
geraint.john@cpoagenda.com
