Companies that work in partnership with their customer and supply chain secure long term benefits for all. Real partnerships graduate beyond the 'touchy- feeley' words like trust ,openess and communication. A Real partnership is typified by activities such as:

Finding time to negotiate levers that are not price or delivery or quality

Sharing production forecasts

Developing joint marketing and product strategies

Exchanging Staff for training programmes

Harmonising Information Technology

In the past 'partnership' working was held up as a panacea solution for all business problems. Making time to assimilate the interests of another company as well as run your own business prevented many potential partnerships from flourishing. The New Internet Technologies bring a fresh opportunity to this relatively un-tapped source for competitive advantage. E-nabled supply chains reduce the transactional costs of day to day business, they also provide great collaborative tools.

A company that has promoted partnership working and integrated e-commerce throughout the tiers of its chain will be the pre-eminent player in its industry. This is a web network diagram showing how competing supply chains are critical to your business.

The Auto and Aerospace industry Primes recognise that they are in a climate where they compete based upon the abilities of their supply chains. It is the supply chains that generate the added value and the cost, by the time all the sub-assemblies arrive at the prime the final cost of the product is already determined. The supply chains are competing.

The above diagram describes how supply chains compete. Imagine that your company is the prime contractor coloured in green, one ring out from the centre of the circle ( your customer). The green colour indicates that you follow the partnership philosophy (use e-technologies) and because your customer is green also, that they co-operate with all the sorts of initiatves detailed above (ones that typify Real partnership working/ e-technologies). That is great news then, you and your customer are in a cosy long-term relation-ship, well not quite.

You need to look at your supply chain in detail. In this example there are 8 main cost drivers in delivering your product/service. Each cost driver and supplier is represented by a different quadrant of the compass. In a clockwise direction from North North East (NNE) you have a 1st tier supplier that is working in partnership using Internet Technologies to reduce time and cost to you but if you look into how that 1st tier supplier manages thei vendors you find that they do not use those advantages. Supply chain ENE looks better because they have two tiers workng together. Supply Chain ESE has the pinnacle of relationships with even third tier suppliers working towards the clearly communicated needs of the final customer, doing it quickly and efficiently. Supply Chain SES is not co-operating, they may be using adversarial selling techniques to maximise short therm profits or they may be just ignorant of modern business methods, they are not developing their vendors and always present delivery and quality problems.

The western half of the diagram present the most worrying picture for your company. The relationship you have with your first tier supply is not a sharing -caring one in any of these chains. The WSW and WNW chains show a particular disadvantage to you where accomplished suppliers have built efficient chains behind them but are not passing on advantages to you, perhaps because your systems are not advanced enough or because you have been trading in an adversarial manner. They are the biggest risk for your cosy customer relationship, inevitably those very efficient western half vendors will be supplying your direct competitors.

The overall winner will be the Prime that harnesses all elements of the chain into an e-technology and partnership orientated future.

Big companies are moving along this route as you read this. Internet Portals are being constructed where every business in the industry can come together and use a common e-commerce interface. These companies also benefit from finding new customers or suppliers and other shared services such as up-ward /downward auctions and collaborative initiatives.

Why not let us audit your supply chains or recommend a portal strategy.

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