Implementation of the Purchase Process: Partnership or Supplier
There are two main options in managing your supplies and suppliers. One in the client-supplier relationship and the other in a partnership.
The advantage of the client-supplier relationship is that you are most flexible. You should take this construction if you are just starting with a new purchase process. Another advantage is the cost of this construction. You choose the supplier with the best cost-quality-ratio.
Another situation in which the client-supplier relation is often preferred is for a product oriented business. Products characteristics are easy to compare and this facilitates the supplier selection.
This is where partnerships are more profitable; for service oriented companies that are dependent on the input (service and or product) of third parties. To deliver a service you need much more commitment and knowledge in order to minimize the interface problems between both companies. Partnerships are less flexible because their return is measured on a longer-term bases. Again for developing services you need a constant interaction in which knowledge is exchanged. Changing to a new partner (supplier) when you have invested in knowledge exchange will lead to increased costs.
In the example of the mobile phones you could choose either way, but a good fit would be the following. A partnership for the delivery part of the purchase process (where the phones get distributed to the various stores) and a client-supplier relation for each of the parties that offer the phones. So you make sure that phones are delivered on time and you are free to choose a new producer.
© 2007 Hans Bool
Related Tags: supplier, partner, purchase process
Hans Bool is the founder of Astor White a traditional management consulting company that offers online management tools. Have a look at some of our free management tools
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