Home Articles News Product Focus Jobs Events Contact us Subscribe to Newsletter

Partnership Purchasing can be a Competitive Advantage

22 September 2013

 

One of the fundamentals in Partnership Purchasing is understanding that your Supply Chain partner also has to run a healthy, profit generating business in order to continue to exist. Partnership Purchasing implies a relationship of trust and that you will work together over the long term, for the benefit of both parties. It does not mean that you have to lower your standards or that your suppliers have an easy time, getting away with making mistakes that you end up having to pay for. In fact, it is probably more challenging to be a Supply Chain partner because you are expected to effectively and consistently show continuous improvements in all aspects of your relationship (communication, price, quality, flexibility etc.) year on year.

 

Partnership Purchasing allows your Supply Chain partners to channel all of their energy into focussing on exceeding your expectations instead of being defocused by worrying about losing your business.

 

Guidelines for participating in Partnership Purchasing

 

Consider each other as an extension of your own family and treat each other that way. Not only does this relate to how freely and transparently information should flow between your two companies, but also to how you should actually be supporting each other actively in running profitable businesses

 

Partnership Purchasing cannot possibly truly exist where there is a lack of trust.

·         Ensure that you have a well thought through SLA (Service Level Agreement) in place

·         Always be true to your word

·         Do not second guess each other

 

Always communicate transparently and honestly with each other, even if the other party does not like what they hear. Remember that it should always be “us against the problem” not “us against each other” and do not shoot the messenger of bad news.

 

First honour your responsibilities, then only you can stand on your rights. Every right is preceded by a responsibility.

 

Always remember that even if the goal is fixed, the means are not – be open-minded and allow for creative solutions… Do not get fixated on “buzz words” and demand single dimensional solutions. Rather afford your Supply Chain partner the opportunity to come up with creative solutions and participate in the process of working towards improvements.

 

Clarify availability and contact hierarchy up front. Communication must be properly co-ordinated, so take the time to agree on key contacts as well as roles and responsibilities

 

Spend time together. Partners have to spend time together to develop a proper and thorough understanding of each other’s businesses and processes. This will enable you to better support each other and to identify practical opportunities for improvement.

 

If you do not know or if you are uncertain ask for clarification.

 

Actively work together to continuously improve. Regularly give each other feedback on what things are working and what things aren’t. Set targets for improvement and actively work on these

 

Guidelines for clients participating in Partnership Purchasing

 

·         Remember that it is give and take

·         Have high standards, but be fair

·         Communicate, communicate, communicate

·         Be very clear on your requirements and expectations

·         Manage the expectations of the rest of your organization

·         Compare apples to apples

 

Guidelines for suppliers participating in Partnership Purchasing

 

·         Stick to your commitments

·         Be responsive

·         Be proactive

·         Do not make your problem my problem

·         Assume nothing; let the customer make the decisions for the customer

 

From the above it is clear that talking about Partnership Purchasing is much easier and quicker than practicing it. When two separate companies finally operate together as if they are merely extensions of each other’s businesses, then you can finally celebrate the achievement and reap the rewards.

 

 

Su-Marie.JPG

Contributed by Su-Mari du Bruyn, Director at Adapt To Change