Intended learning outcomes: Produce an overview on the ALP model: a framework for implementation of an intensive cooperation in the supply chain.
A distinguishing feature of a partnership relationship is its long-term nature. The stability and, for a balanced relationship, also the intensive cooperation are guaranteed only if each partner perceives the situation as “win–win.” Achieving a win–win situation is the guiding principle in implementing a partnership. The Advanced Logistic Partnership (ALP) model[note 205] puts this basic principle into concrete terms. The ALP model is a framework that describes three management levels of interactions among suppliers and customers:
- Top management level: building trust and establishing principal legal relationships
- Middle management level: working out collaborative processes on the supply chain
- Operational management level: order processing
ALP distinguishes among three phases in the relationship between suppliers and customers:
- Intention phase: choice of potential partners
- Definition phase: search for possible solutions, decision making
- Execution phase: operations and continual improvements
Figure 2.3.2.1 shows the nine fields that result from this structuring. Marked in the fields is the basic sequence of implementation of a partnership among companies.
Fig. 2.3.2.1 The ALP model: a framework for implementation of an intensive cooperation in the supply chain.
The top management level supplies the requirements for the middle level, which in turn sets requirements for the operational level. As cooperation on all levels is the key condition for the partnership, it is important to involve all participants early on. Only in this way will the consensus and team spirit, essential to transcorporate cooperation, develop within an organization. With this, the operational and middle management levels also influence the top level, as indicated in the figure by means of the thin arrow. The bigger letters in the fields along the axis from the top left to the bottom right indicate that the main work is performed for the relevant activities. The top right and bottom left fields enclose activities mostly overlooked in practice.
In recent discussion on supply chain management, attention was shifted to the four fields at the bottom right of Figure 2.3.2.1 (highlighted by dark shading). Through an integral perspective and a focus on all business processes in the supply chain, a company aims to coordinate its own planning and execution with that of suppliers and customers to achieve the optimum in the entire supply chain. All the tasks are oriented toward the darkest field, at bottom right, of the nine fields in Figure 2.3.2.1: cooperative order processing in the network. For that is where the value adding takes place that is of interest to the end user. In general, SCM software manages only the tasks in this ninth field. Adequate and efficient implementation of IT support is a necessary, but by itself not sufficient, prerequisite for the success of all other components of supply chain management.
Course section 2.3: Subsections and their intended learning outcomes
2.3 Designing a Strategic Partnership Relationship
Intended learning outcomes: Present target area strategies for intensive cooperation. Explain the Advanced Logistics Partnership (ALP) model with concepts such as building trust, working out collaborative processes in the supply chain, avoiding the bullwhip effect. Describe the virtual enterprise and other forms of coordination among companies.
2.3.1 Target Area Strategies for Intensive Cooperation
Intended learning outcomes: Produce an overview on the social competency of a company. Present target area strategies for an intensive cooperation in the partnership relationship, describe tasks and investment areas, and disclose possible supply chain risks entailed.
2.3.2 The Advanced Logistics Partnership (ALP) Model, a Framework for Implementation of Intensive Cooperation in the Supply Chain
Intended learning outcomes: Produce an overview on the ALP model: a framework for implementation of an intensive cooperation in the supply chain.
2.3.3 Top Management Level: Building Trust and Establishing Principal Relationships
Intended learning outcomes: Present trust-building measures in partnership relationships. Disclose the reasons for (1) creating the required conditions in your own company first, (2) – where possible – placing emphasis on local networks (local sourcing), and (3) not exploiting strengths in your company’s negotiating position.
2.3.4 Middle Management Level: Working Out Collaborative Processes in the Supply Chain
Intended learning outcomes: Present cooperative processes in the supply chain. Produce an overview on Collaborative processes in participative design/engineering. Describe contract issues for a partnership relationship.
2.3.5 Operational Management Level: Collaborative Planning, Forecasting, and Replenishment (CPFR)
Intended learning outcomes: Produce an overview on collaborative planning, forecasting, and replenishment (CPFR). Describe vendor-managed inventory (VMI) and continuous replenishment planning (CRP). Identify planning & control tasks for a partnership relationship.
2.3.5b Avoiding the Bullwhip Effect (Forrester Effect)
Intended learning outcomes: Explain the bullwhip effect. Identify the point of sale (POS) and the quick response program (QRP).
2.3.6 Managing a Strategic Partnership Relationship — A Practical Application
Intended learning outcomes: Present the ALP phases in the case of a high-tech Swiss machine tool manufacturer with a world market presence who wanted to introduce an intensive partnership relationship with suppliers of important assemblies.
2.3.7 The Virtual Enterprise and Other Forms of Coordination among Companies
Intended learning outcomes: Produce an overview on the virtual enterprise and underlying long-term network of potential partners. Present target area strategies for a virtual enterprise and disclose possible supply chain risks entailed. Describe some other forms of cooperation in relation to the virtual enterprise.
