Relationships / Product Life Cycle

Cox 1967

Development
Single source or partnership to access innovation and R&D.

Growth
Volume reliability to meet increasing demand. Single source, closer tactical.

Maturity
Transactional. Possible outsourcing or licensing.

Decline
Transactional.

Re-birth
Single source or partnership to access innovation and R&D

Cannon (2001).

Relationships Life Cycle - Partnership

Pre - Contract
Introduction phase. Intense activity. Due diligence and formal processes completed Visits to partner sites. Contract terms and conditions agreed or imposed. Formal network established.

Post - Contract
Communication established. Supplier development. Informal networks established. Transactional exchanges begin. Cultural fluency may be an issue.

Maturity
Punctuated equilibrium. Personnel changes. Env. Change. Shorthand in comms developed. Partners begin to make assumption. Balance of Power may change

Decline
Natural decline or strategic withdrawal or increasing unrest. Exit strategy to be determined and executed. Partners will assess value within networks.

Post-Ptn.
Networks may survive to form new partnerships or strengthen other network ties.

Total Satisfaction

Supplier satisfied / purchaser dissatisfied Supplier Satisfaction Wa Ling

Marginal

Both parties satisfied Wa Shing Purchaser satisfied / supplier dissatisfied

Both parties dissatisfied

Total Dissatisfaction

Marginal

Total Satisfaction

Purchasers Satisfaction
Fogg, M (2009) purchasing and supply relationship

Relationship length

Supplier development Kotabe, Martin, and Domoto (2003)

Performance

Supplier development

Performance

Relationship length Krause, Handfield, and Tyler (2007)

Supplier Preference Model

(Paul Steele and Brian Court, published in Profitable Purchasing Strategies, McGraw Hill)

HIGH

Development Attractiveness of customer

Core
Wai Lung Faster manufacturing Interested at a late stage

Nuisance
Wa Shing Problem with communication Delay on production LOW

Exploitable

HIGH

Relative value of the account

Design Business intelligence Logistics assembly

Relationship length

Supplier development Kotabe, Martin, and Domoto (2003)

Performance

Supplier development

Performance

Relationship length Krause, Handfield, and Tyler (2007)

Posture of relationship Close loose

Financial importance of supplier Major Wai Lung Wa Shing Minor

Ford et al 1998 : Managing Business relationships

Posture f relationship Close loose

Supply-structure Single 1 3 Multiple 2 4

Ford et al 1998 : Managing Business relationships

KPI Price and cost management Quality of product (based on agreed tolerance) Service quality (based on SLA) Engagement in supplier development activities Research & development
Total

Weighting 1.25 1 1.5 1.5 1.25

Score
3 3

Calc

3.75 3 7.5 7.5 5 26.75

5 5 4

KPI Price and cost management Quality of product Service quality Engagement in supplier development activities Research & development
Total

Weighting 1.5 1.5 1.5 1.25 1.25

Score
3 3

Calc

4.5 4.5 7.5 6.25 5 27.75

5 5 4

Kraljic. (2012).

A Supplier Appraisal Process

Start

Mike Fogg (2009)

6 Weight sub areas/set scoring mechanism

Ten planning issues

1 - Planning the process

Supply Positioning

2 - Supply Market research and targeting

Supplier Preferencing

7 The Questionnaire

Seven Steps

3 Determine evaluation areas

8 Plan on-site appraisal

4 Determine the importance of each area

9 An on-site appraisal

5 Identify sub areas

10 Review, decide, feedback, next steps

End