THE BUSINESS REVIEW FOR PROCUREMENT LEADERS
Hard- hitting price negotiations of the sort made famous in the automotive industry often sit uncomfortably with collaborative partnerships with key suppliers. In a competitive marketplace, companies such as Ford have stated their aim of becoming a "customer of choice" to benefit first from supplier innovations. The dilemma for many, though, is how to become attractive to suppliers without paying higher prices.
Based on their research into relationships between food and beverage companies and their packaging suppliers, Carlos Cordon and Tom Vollmann – professors at the IMD business school in Switzerland – explore what makes customers attractive to suppliers, and vice-versa. For suppliers, they argue, the "expected value" of a relationship and the "comfort" it feels in securing this value are powerful factors. A supplier can rate a customer differently on these than the latter’s own purchasing managers.
While "alignment" of goals might appear to be a solution, it is almost impossible to achieve, because an initiative that is positive for one party may be disruptive for the other. So managing misalignment is one of the 10 "golden rules" for fostering customer-supplier attraction.
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