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Published by Saeed Abbas

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Published by: Saeed Abbas on Oct 18, 2011
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The way in which the purchasing organisation decides to deal with its suppliers can have a
fundamental effect on the future ofthe buyer–seller relationship.According to Spekman
(1988),there are two polarised approaches that lead to very different relationships.

Adversarial approach

The purchasing organisation pressurises the supplier to minimise prices and,by insisting on
short-term contracts and using multiple sourcing,keeps the supplier alert and sweating.The
purchaser is unlikely to be interested in helping the supplier unless there is a direct cost
saving to be had.This purchaser will rarely need special products and services and certainly
will rarely be prepared to pay for such things.This is a legitimate approach in appropriate cir-
cumstances,where there are plenty ofalternative sources ofsupply,the product is fairly
standard and price really is the driving criterion.

Collaborative approach

In a collaborative approach,close ties are forged between buyer and seller and there is much
interest and value in close cooperation and integration.Such an approach can support valuable
work in product design,specification and quality;advanced production processes;flexible
scheduling and delivery;and special inventory.There are,however,the risks ofbecoming too
‘cosy’,complacent and blinkered,as well as the inherent dangers ofmutual dependency.
Collaborative approaches are particularly crucial in JIT environments,as Table 4.6 shows,
neatly summarising the reasons that collaboration rather than confrontation should be con-
sidered in critical supply situations.

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