Good Buyer and Seller

The overall objective of this chapter is to give the reader an understanding of the importance of good buyer-seller relationships. To create a sustainable supply chain, buyers must develop collaborative relationships with their suppliers. This supplier alliance can create a competitive advantage for both the buyer and the seller.

Vignette:

A Supplier Alliance at Quaker Oats

1. Give an example of competition driving improvements in service, quality, and cost. Quaker teamed up with Graham and built a bottling plant on site ,thus leading to less cost in packaging and shipping

2. Why was Quaker Oats intent on building trust in these relationships? Quaker recognized that a good potential supplier was key to achieving their goal of bringing a lower priced product to the market.

3. Why is it important for Graham to take responsibility for unused capacity in the off-season? It was important for Graham to be responsible for selling unused capacity in off season less inventory and cost of workers.

4. Why do you think upper management would have to be convinced to accept a change that would benefit the organization? Upper management would have to be convinced, because most upper management are uncomfortable with change. They also didn't like putting all their eggs in one basket.

A Transformation in Relationships

How was the buying/selling relationship viewed prior to the concept of collaborative relationships? They were viewed as a gain for one resulted in a loss for the other or better known as a win-lose outcome

How can these relationships contribute to the firm's potential competitive advantage? These relationships "from a provider of the right components at the right time and lowest cost, to a manager of the supply base responsible for the generation of competitive advantages for the company"

Three Types of Buyer-Supplier Relationships

What are the two extremes in the buyer/seller continuum of relationships?

Transactional and Collaborative

Bullet point in five words or less six characteristics of a transactional relationship.

* _Absence of concern___________________________

* __Cost ,Data and forecasts not shared__________________________

* _Price is the focus___________________________

* __Quality of the relationship__________________________

* Independent deals____________________________

* _Market