Transcript Collaborative Business Networks and Technology Companies

Chapter Five:
Partnering and Strategic Alliances
MAJOR TOPICS
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Partnering or Strategic Alliances
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Innovative Alliances and Partnerships
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Internal Partnering
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Partnering with Suppliers
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Partnering with Customers
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Partnering with Potential Competitors
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Global Partnering
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Education and Business Partnerships
Partnering or Strategic Alliances
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Partnering means working together for mutual benefit.
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The purpose of partnering is to enhance competitiveness.
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It involves pooling resources, sharing costs, and
cooperating in ways that mutually benefit all parties
involved in the partnership.
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Partnerships may be formed internally (among
employees) and externally with suppliers, customers, and
potential competitors.
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The maximum benefits of partnering are realized when all
parties in the chain of partners cooperate.
Apple ipod
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Intro Oct 01 ipod dominated market for portable media players
Constant renewal of product; new generation every year
Partnering with suppliers
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Partnering with logistics & retailers
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Capable of quantity and quality
Global
Rapid response
Walmart/Best buys
Without extra cost
Without extra inventory
Informational supply chain
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Download music & videos
Download software & upgrades
Partnering or Strategic Alliances
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The formation of partnerships should be a systematic
process involving such steps as
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development of a partnering briefing,
Making sure all those involved understand the concept of
partnering, determine the level of commitment, develop a
mission statement and objective
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identification of potential partners,
Chose partners determined by how much value they can have
towards enhancing quality, productivity and competitiveness
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identification of key decision makers,
Identify those key people and decision makers; their support
is necessary for the partnership
Internal Partnering
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The purpose of internal partnering is to harness the
full potential of the workforce and focus it on the
continuous improvement of quality.
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Internal partnering is also called employee
involvement and employee empowerment.
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Successful internal partnering requires a supportive
environment, structured mechanisms, and mutually
supportive alliances.
Internal Partnering
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Internal partnering operates on three levels:
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management-to-employees
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team-to-team partnerships
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employee-to-employee partnerships.
Internal Partnering
Successful internal partnering requires a supportive environment,
structured mechanisms, and mutually supportive alliances
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Supportive environment
If the environment is conducive to internal partnering, then it is
encouraged and even rewarded
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Structured Mechanisms
There needs to be systems in place for employees to funnels
improvement ideas, and HR considerations for meetings
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Mutually Supportive Alliances
Internal partnering alliances must support each other and NOT be
building individual fiefdoms. They must ALWAYS be for the
improvement of the organization.
Facilitates turning good ideas into improvements
Pg 152
Partnering with Suppliers
Traditional supplier relationships have been adversarial
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The goal is to form a mutually beneficial relationship
which promotes continuous improvement of quality,
productivity and competitiveness.
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Stages of development
Pg 156
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Uncertainty & tentativeness
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Short-term pressure
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Need for new opportunity
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Adoption of new paradigm
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Awareness of potential
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Adoption of new values
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Mature partnering
See Quality Tip
page 156
Partnering with Suppliers
Requirements of Supplier Partnerships
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Supplier should meet and develop relationships with the
users of their product, rather than just the purchasing people
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Price-only approach should be eliminated. Price still needs
to be considered, but along with aspects such as product
features, quality, delivery, etc.
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The quality of the supplier’s product must be guaranteed by
the supplier’s quality programs – they need to have adopted
TQM as a business practice.
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Supplier needs to understand and practice JIT. Buyers
should not maintain inventories
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Information needs to be shared electronically
Pg 154
Partnering with Suppliers
Emerging issues in Supply-Chain Management
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Security
The world has changed since 911, that includes the business world. Terrorism
is a real threat, especially within certain industries, such as the food industry.
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Adaptability & Responsiveness
An organizations competitors improve using these methods as well. To stay
competitive a company…and it’s suppliers…must be able to rapidly adapt to a
changing competitive environment
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Globalization
Globalization has changed the customer base, making the need for
adaptability a necessaity. This would also include the size, type and location
of suppliers they partner with.
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Misalignment of material technologies and product life cycles
High Tech products (computers, ipods, phones, etc) have a life cycle which
continually changes
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Transition and Crisis Management
Organizations need to the ability to recover quickly from disasters which may
strike their suppliers
Pg 157
Partnering with Customers
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The rationale for forming customer partnerships is
customer satisfaction and increased competitiveness.
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The best way to ensure customer satisfaction is to
involve customers as partners in the product
development process.
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Doing so is, in turn, the best way to ensure
competitiveness.
Customer-defined quality is a fundamental aspect of total quality.
Partnering with Customers
The rationale for forming customer partnerships is customer
satisfaction and improved competitiveness.
A company needs to ask these questions
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Who knows better what the customer wants, your
organization or the customer?
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What makes more sense, guessing what a customer
wants, or asking them?
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Can a manufacturer benefit from seeing how the product is
used by the customer?
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What costs more, making design changes early in the
development phase, or recalling faulty products which
have been already made and delivered?
The further along in the product devlopment cycle a
product is, the more costly the changes can be
Pg 159
Partnering with Customers
Case– Threadless.com
Partnering with Potential Competitors
Increased competitiveness
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Competitors may ban together to improve domestic
manufacturing to improve their competitive position
over foreign imports.
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Competitors may produce products for one another
when facilities and equipment are not available
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Competitors may share information on safety,
regulatory controls, education, training, etc
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This is especially prevalent with small and midsized enterprises (SMEs)
Pg 160
Partnering with Potential Competitors
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Small- and medium-sized enterprises or SMEs, even
those that compete in the same markets, can benefit from
partnering.
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The most widely practiced form of partnership among
SMEs is the manufacturing network.
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A manufacturing network is a group of SMEs that cooperate in
ways that enhance their quality, productivity, and competitiveness.
Mutual need and interdependence are the characteristics that
make manufacturing networks succeed.
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Widely practiced network activities include joint production,
education and training, marketing, product development,
technology transfer, and purchasing.
Education and Business Partnerships
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Education and business partnerships are formed to
help organizations continually improve their people
and how well they interact with process
technologies.
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Services provided include on-site customized
training, workshops, seminars, technical
assistance, and consulting.