Professional Documents
Culture Documents
Coyle 9e CH 04
Coyle 9e CH 04
SUPPLY CHAIN
RELATIONSHIPS
Learning Objectives
After reading this chapter, you should be able to do the following:
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Learning Objectives, continued
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Logistics Relationships
● Types of Relationships
• Vertical relationships
○ these refer to the traditional linkages between firms in the
supply chain such as retailers, distributors, manufacturers,
and parts and materials suppliers.
• Horizontal relationships
○ includes those business agreements between firms that have
“parallel” or cooperating positions in the logistics process.
● Intensity of Involvement
• Ranges from vendor to strategic alliance
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Logistics Relationships, continued
● Intensity of Involvement
• Transactional
○ Both parties in a vendor relationship are said to be at “arm’s
length”
• Collaborative
○ the relationship suggested by a strategic alliance is one in
which two or more business organizations cooperate and
willingly modify their business objectives and practices to
help achieve long-term goals and objectives
• Strategic
○ represents an alternative that may imply even greater
involvement than the partnership or strategic alliance.
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Figure 4.1
Relationship Perspectives
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Figure 4.4
Implementation & Continuous Improvement
Source: Ray A. Mundy C. John Langley Jr., and Brian J. Gibson Used with permission
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Need for Collaborative Relationships
● Vertical collaboration refers to the
relationship between buyer and supplier in
the supply chain.
● Horizontal collaboration refers to buyer-
buyer or seller-seller relationships.
● Full collaboration is the dynamic
combination of both vertical and horizontal
collaboration.
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Figure 4.5
Types of Collaboration
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Third-Party Logistics – Industry Overview, continued
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Table 4.2
Top Buyers of 3PL Services
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Table 4.3
Global 3PL Market Revenue Estimate
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Figure 4.6
3PL Market – U.S. Turnover Growth
Source: Predictions and major trends for third part logistics 2011,
Armstrong & Assoc., Inc. Used with permission
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Third-Party Logistics Research Study –
Industry Details
● Profile of logistics outsourcing
• Operational, transactional, and repetitive services
were the most likely to be outsourced.
● Strategic role of information technology
• Most frequently used services were
transportation and warehouse management
systems.
● Management and relationship issues
• Must establish appropriate roles for 3PL and
clients
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Third-Party Logistics Research Study– Industry Details , continued
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Figure 4.7
Outsourced Logistics Services
Source: Fifteenth Annual 3PL Study, C. John Langley Jr. Ph.D. . Used with permission
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Figure 4.9
Customer’s Perspectives on 3PL Relationships
Source: 2005 Tenth Annual 3PL Study, C. John Langley Jr. Ph.D. and Cap Gemini LLC.
Used with permission
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Figure 4.10
Evolution of 3PL / LLP / 4PL Services
Source: 2005 Tenth Annual 3PL Study, C. John Langley Jr. Ph.D. and Cap Gemini LLC.
Used with permission
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Summary
● The two most basic types of supply chain relationships
are “vertical” (e.g., buyer-seller) and “horizontal” (e.g.,
parallel or cooperating).
● In terms of intensity of involvement, inter-firm
relationships may span from transactional to relational
and may take the form of vendor, partner, and strategic
alliances.
● There are six steps in the development and
implementation of successful relationships. These six
steps are critical to the formation and success of supply
chain relationships.
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Summary, continued
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Summary, continued
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