Most companies try partnering with suppliers

3 April 2007
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04 April 2007 | Antony Barton

Over two thirds of UK companies have tried partnering arrangements with their suppliers, with most reporting successful experiences, according to a new survey.

Some 68 per cent of survey respondents tried this approach and 82 per cent said it was successful, mainly because of improved working relationships.

The survey, released by law firm Osborne Clarke, says the practice of working closely with suppliers and using their skills to identify efficiencies means it is unsurprising that 59 per cent of companies have tried gainshare arrangements - sharing the cost-savings achieved. This created positive experiences for 97 per cent of respondents, who cited increased motivation and cost savings.

Russell Bowyer, partner at Osborne Clarke, said businesses' combative relationship with suppliers was changing because market pressures were forcing companies to focus on their cost base.

He added: "Traditionally conducted at arms length with the prime objective often just to hammer down price, businesses are now changing their tactics and are working closely with their suppliers to get more from the relationship."

The survey was based on 61 telephone interviews, conducted with procurement and finance professionals in winter 2006. Around 90 per cent were from the procurement function.

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