'Dalliances' are vital, delegates told

28 April 2004
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29 April 2004

Purchasers should remember the importance of short-term, less strategic supplier relationships as they seek essential long-term alliances, according to academics involved in a government-backed research project.

The Discontinuous Innovation Forum project was set up by the Department for Trade and Industry last year to find ways of encouraging innovation in British industry.

Wendy Philips, from the Centre for Research in Strategic Purchasing and Supply at Bath University, and one of the project's academic co-ordinators, told delegates that long-term strategic alliances between companies and their suppliers had been accepted as good practice in the past decade.

But she said "strategic dalliances" were just as important. "You have to stay one step ahead of your competition nowadays. Innovation is fundamental to improving performance and firms have to make sure they are not knocked out by a competitor or a new entrant to the market."

Nevertheless, long-term alliances with suppliers and customers are at the heart of many successful companies today, according to Salvatore Castorina, senior vice-president of Geneva-based ST Microelectronics, one of the world's biggest microchip makers.

He told delegates: "We put our technology at their disposal and they use their know-how to arrive at the best solution."

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