Strategic Alliances For Supply Chain Success

There will always be some conflicts in the supply chain, without regards to the industry. And I believe that will continue to be true in the future too. More times than I can remember, I have presented my keynote presentation titled, The New Era of Manufacturer/Distributor Cooperation at either manufacturing or distribution association meetings.

One result that is proven to be true for years is the supply chaing partner relationship that is strenghten by good communication, according to research. That rarely proves to be the case, unfortunately. Through collaborative relationships, supply chain partners can improve.

To build efficient and productive relationship with any supply chain partner, important thing that will definitely help to improve the level of communication is an ability to understand a value that your supply chain partner has to receive from that relationship. One good example of this is that a procurement department can be in position to believe that a supply partner could lower the price in such way that they can not make any profit. It's just crazy, nothing more.

If you make an effort to understand the total value your supply partner needs and help them to receive that total value package, they will perceive you as a great partner and communication will become easier. I am not suggesting that you give away the bank, but rather only put your energies into activities, services, and so forth that delivers the value to your supply partner that they want.

Supply Chain Improvements

Just-in-time inventory purchasing and supplying as exemplified by the famous relationship between Wal-Mart and Procter & Gamble has continued to prove successful. Home Depot and Dell Computers have also built powerful alliances with their suppliers for cost saving just-in-time inventory in similar applications. You could also apply this in your business. You can develop closer relationships with your supply chain partners.

You and your partner should share the same strategy, and that is a very important issue. Conflicts and complaints must be of highest priority and promptly responded to. This is the bet way to earn loyalty and build trust in the strategy which will bring great results.