Surviving Supply Chain Integration Strategies for Small Manufacturers (2000) / Chapter Skim
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7 Building Partnerships
7 Building Partnerships
Pages 59-63
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From page 59... ...
Integrated supply chain partnerships involve more than legal agreements to work together. They involve complex interrelationships of shared activities, processes, interests, objectives, and competitive information.
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From page 60... ...
Integrated supply chain relationships are often defined by additional agreements regarding product and financial flows, channel (product distribution) policies, price protection, contingencies, and capacity reservations (i.e., the guaranteed availability of specified levels of production capacity)
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From page 61... ...
A long-term view is important for integrated supply chains in which the parties have a substantial bilateral stake in the relationship and contractual breakdowns can be costly. The typical intent of a partnership is to establish a relationship with increasing interdependency that will outlive the term of the contract.
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From page 62... ...
Contracts typically address the size of the job in relation to the capabilities of the supplier, the length of the contract, the amount and kind of specialized investment required to support the transaction, the extent of supplier involvement in the design process, and the degree to which implementation entails real-time responsiveness. Contracts often contain security clauses addressing specialized investments and proprietary intellectual property.
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From page 63... ...
Finally, differences among industries with respect to maturity, technology, size distribution of firms, and product differentiation can pose different contracting and organizational challenges. In general, a mature industry with a dominant design and multiple firms producing homogeneous products poses fewer problems for contracting.
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