Embracing Codependency: Enhancing Success
As mentioned in chapter 4, transaction-based models are great for driving competition and ensuring low prices. Unfortunately, the highly competitive processes that enable an organization to get the best price do not always bring out the best from suppliers. Buyers can unlock value by moving along the sourcing continuum to hybrid or relational contract models. Properly structured relational contracting models—preferred provider, performance-based, and Vested business models—lead to organizations viewing suppliers as sources of competitive advantage, not as operating at arm’s length. As an organization moves to collaborative, relational Sourcing Business Models, it needs to apply different methods. Most importantly, it also needs a different mindset to unlock potential.
KeywordsPreventive Maintenance Relational Contract Supply Relationship Prefer Provider Supplier Relationship
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