Creating closer relationships

The traditional supplier-customer relationship has been limited to contact primarily between the customer s buyer and the supplier s salesperson. Other functions, such as information systems, are kept very much at arm s length. Indeed, the customer s buyer argues that dealings with the supplier should only go through him or her in that way, they ensure that sensitive communications, such as those affecting price, are limited to a single channel. 

We concluded that logistics disciplines provide a focus for coordination around which other aspects of a supply relationship revolve. If failures such as product quality and process breakdowns did not happen, then adjustments would not be necessary. It is the failures inherent in the management of physical product flows that make these adjustments necessary, and which encourage the partners to work together. Management of physical flows demands heavy-duty coordination mechanisms between supply partners. This can be overlooked by senior managers - who tend to focus on contractual aspects of a relationship, and to overlook its procedural implications and the necessary resoiuce commitment. 

Coordination manifests itself as a tension between mechanisms that bring the partners together - hence stressing the benefits of achieving shared success - as well as mechanisms that drive the partners apart. Separateness can be derived either from a failure to coordinate (because of various technical or organisational reasons), or from the need to focus on the requirements of the internal organisation. 

However attractive such processes of bonding may appear, in practice the organisational boundaries and vested interests inhibit the rate at which relationships deepen. These have been described as a series of factors as a result of research in the auto industry. 

Lamming (1993) proposed nine factors for analysing customer-supplier relationships, which have been modified and extended below  

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At the same time as the power in the distribution channel continues to shift from supplier to buyer, there is also a trend for customers to reduce their supplier base. In other words they want to do business with fewer suppliers and often on a longer-term basis. The successful companies In the coming years will be those that recognise these trends and seek to establish strategies based upon establishing closer relationships with key accounts. Such strategies will focus upon seeking innovative ways to create more value for these customers. 

Effective utilization of a critical technology requires a much closer collaboration throughout the whole chain in which the material is used. Critical technologies evolve and develop over a long period, and so they can support a broad industrial base. This relationship creates a certain inertia with respect to revolutionary change, but it certainly indicates that it is very important to stimulate and maintain evolutionary change. 

Transformation n A functional replacement or change in variables of one or more variables. Transformations are often used to simplify the behavior or shape of a random variable s probability distribution, to create a constant variable, or simphfy the relationship between variables. Transformations are generally named by either their purpose or by their functional transformation. Two common transformations named for their purpose are the transformation to normality, whose purpose is to change the shape of a probability distribution so that it is closer to that of the normal distribution, and the transformation to linearity whose purpose is to change the relation between two variables so that it is linear. Common types of transformations named for their functional transformation are the logarithmic transformation, which replaces a variable by its logarithm, the 1/x transformation, which replaces a variable by its inverse, and the transformation, which replaces a variable by its square. 

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