Sch - Supplier Relationship

Strategic Supply and the Management of Inter and Intra Organisational Relationships.

Paul D Cousins School of Management, University of Bath, U.K. Robert Spekman Darden Business School, University of Virginia, U.S.A.

Abstract

As companies attempt to shed old habits and begin to view procurement as a strategic resource from which a competitive advantage can be gained, there is a great deal of corporate baggage that must be shed. More importantly, there is a new mindset that must be instilled both in procurement and across the firm. Strategic supply symbolizes the importance of enterprise wide thinking where functional units inside the firm and key suppliers from the firm’s supply chain all work in concert to bring value to the marketplace. This paper presents data from the US and the UK that helps us better understand and address issues that are key to managing across an independent supply chain partners. We also address some of the barriers to implementing such a supply strategy. These barriers exist inside the firm as well between the firm at its key suppliers. Whilst we acknowledge that progress is being made but the data suggest that the journey is far from over.

Introduction and the Development of Purchasing

This paper uses research conducted on two continents (Europe and the USA) to gain insight into the evolution and development of strategic procurement, and its effect on the management of inter and intra firm relationships. The focus on procurement is based on the fact that firms are slowly acknowledging the value added capabilities of a function that is typically responsible for procuring assets that equal about 65% of the average manufacturing company’s sales. To view procurement as a cost savings activity only is to sentence one’s company to competitive failure. Purchasing has long been thought of as the management of a firm’s inputs i.e. raw materials, services and sub-assemblies, into the organisation (Burt and Soukup 1985; Farmer 1985; Dobler...