Supply Chain Management as a Strategic AllianceSupply chain management is rarely thought of as a strategic
alliance. Yet the characteristics of an alliance will generate more
integrated relationships, which could leverage benefits for all
concerned.
Consider the integration of Procter & Gamble (P&G) with its
major customer, Wal-Mart. In this classic supplier-customer
integration example, Wal-Mart gave P&G access to its supplier
management processes and asked for help. P&G spent huge
resources and time analyzing and designing a supplier management
system that integrates customer purchases and store inventory
management to the manufacturing, ordering, and shipping
processes of P&G. In this way, P&G created a nearly seamless sys-
tem that allows integration between two separate entities. This has
worked so well that Wal-Mart asked P&G to help it integrate this
as a supply chain management system for other suppliers. Wal-Mart
is now known to have one of the most intimate and detailed sup-
plier management systems, which leaves little room for inefficiency
and contributes to its cost savings and overall customer promise.
Another example of supplier-customer integration is that of
Starbucks and its integrated relationships with its partners Safeway
and Albertsons. Contrast the DaimlerChrysler relationship, with
its tier-one suppliers, with the Chrysler keiretsuof the past. Were
Chrysler costs lower before, when it opened its kimono to its
suppliers and said, “Work with us to save us all money,” or is it bet-
ter off now that it is driving cost savings into the structures of its
suppliers? Certainly, tier ones are pushing the cost issues to tier-two
suppliers. Yet the reality is that tier-three suppliers are going out of
business.
Managing these complex relationships like alliances would
have created a collaboration that would have transmuted the sys-
tems of supplier concerns and margin issues to the more collabora-
tive discussions of customer constraints and investment issues.
TRANSFERRINGKNOWLEDGE TOSUPPLIERS 83