In: Operations Management
Many companies employ vendors based on their skills and prices,
but adding five cultural compatibility qualities to the equation
will contribute to safer and more profitable supplier
partnerships.
Professors Karl Manrodt and Jerry Ledlow have a fascinating
viewpoint when it comes to buyer-supplier partnerships-particularly
strategic procurement agreements where the supplier becomes more or
less a purchasing company extension. Their reasoning is that skills
are necessary if you're to partner with a strategic manufacturer to
cover capability gaps. But, if a company picks a supplier based
purely on expertise, they'll potentially end up disappointed and
eventually wasting time and resources by trying to move suppliers
due to a lack of cultural compatibility.
Manrodt, professor at Georgia College of logistics and supply
chain, offers an example to two people dating. Most companies that
have suppliers are like couples who really don't want to be
together. Take a far-left Democrat for starters and a far-right
Republican. We will therefore not have a strong chance to establish
a healthy long-term friendship because they both view the universe
from a separate lens. Similarly, businesses that have cultural gaps
with how they make choices and work will not be a perfect match
either. Manrodt and Ledlow agree with Christfort and Vickberg's
notion that you don't want to have someone just like you on your
team, as it stymies diversity of thought and creativity. The
contrast, though, is that Manrodt and Ledlow agree complexity is
multifaceted. They say dealing for a manufacturer who is culturally
inconsistent with the way their company takes decisions and works,
if not disappointment, would set them up for dissatisfaction.
Manrodt has been consulting with Dr. Jerry Ledlow, Director, Urban
and Rural Health Program at UT Hospital, Tyler's University of
Texas Health Science Center, and Professor, Public Policy,
Economics, and Management Department. Dr. Ledlow has written a
number on management and leadership, and they tried to determine
cultural alignment between a customer and seller together. The pair
created the Reliability and Trust Appraisal (CaT) together. For
businesses, they identify the CaT as an Online dating site.
Five Attributes of Buyer-Supplier Compliance. Manrodt and Ledlow's
Compliance and Trust Analysis looks at reliability and cultural
alignment across these five aspects:
For strategic sourcing, a more comprehensive and clear approach is required. First, an outline of the model is given and performance and consistency definitions are evaluated. The greater-order model is a move from the Kraljic model into a more complex and modem structure. The design also suggests pragmatic alliance or collaboration models; these types are combined with the models of Williamson that demonstrate the progression of thinking in the CAAVE paradigm and reflect on the idea of "win-win" Nash. Several ideas are raised when contrasting the two models to justify the need to develop into a more modern paradigm. In the midst of these Kraljic model elaborations, another phase of growth can be identified. This second wave is oriented towards classifying the quality of buyer-supplier partnerships as opposed to Kraljic's initial emphasis.
Thus we can say that supplier relationship that are based on trust are more beneficial than just strategic partnerships.