Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

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.

In the selection of potential partners, the fundamental consideration is whether a partner can fulfill the required goals. Partners must formulate these objectives in a sufficiently clear manner, in order to master devia­tions in results from the contractual agree­ments. However, to cooperate long-term and intensively in a supply chain, our research found the trust-build­ing measures in Figure to have proven significance.

Fig.        Trust-building measures in partnership relationships.

Even this incomplete list shows that a great deal of social competency is demanded of each partner in the supply chain. But exploitation of strengths in a company’s negotiating position is in accordance with the traditional buyer mentality. Many supplier relationships that go under the term partnership probably do not deserve that term. In many cases, the positioning of the supplier in the supplier portfolio reveals this fact, which can be definitely correct with regard to the current business activity. See also [Hand95], [WaEg10]. However, if the importance of supplier and buyer are mutually high, only the balanced partnership relation­ship will result in competitiveness of the entire supply chain. People working in procurement learn to become supply chain managers. And employees in sales, production, and logistics can also acquire the required knowledge from procurement and the other areas and successfully become supply chain managers.

Course section 2.3: Subsections and their intended learning outcomes