Knowing where you are in a relationship “lifecycle” with a supplier is critical for future planning, said a professor at Henley Business School.
Marc Day, professor of strategy and operations management, told the LUPC & SUPC Conference that strategic partnerships tended to decline over time.
“I know there’s a lifecycle to collaboration. How do I know that? Because we’ve worked that out through research over a significant period of time,” he said.
Day said harmony, dependency and levels of trust – “three really, really important things about a relationship that make it work” – tend to fall as relationships mature.
“Actually relationships are at their best when they’re building up... So the more you get to know each other the more likely you are to begin to start to lose the ability to leverage value from that relationship,” said Day.
“That’s really important to know,” he added. “So you’ve got to think about what legs does this relationship have for the future.”
Through collaboration, Day said procurement could move beyond “managing and controlling costs” and start adding value.
“There are things there to do with cost,” he said, “but it’s also to do with accessing capabilities and in particular accessing capabilities from the supply base. So leveraging technical knowhow or commercial knowhow from outside of your house.”
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