For strategic supplier partnerships to be successful, factors to improve internal collaboration have to be taken into consideration. These include full support by top management and cross-functional teamwork.
Top management support. Having the support from top management boosts the motivation among those who help manage strategic supplier partners and makes a strategic partnership more likely to succeed. Such involvement needs to go far beyond actually signing the contract itself. At many companies, buyers are still relatively subordinate and thus in need of support on strategic issues. This means management must ensure that the resources required, such as people, time, travel, technology and facilities, are available. In addition, management should remove any organizational obstacles and create a climate in which the customer’s and supplier’s staff can work together well. The level and intensity of such involvement depend on the relative size of the customer and supplier.
Cross-functional teamwork. Many successful businesses have emphasized the concept of using the coordinated expertise of teams. Cross-functional teams have also become a major success factor in procurement to minimize total cost of ownership and provide the best technical solution. To be effective, they should be put together at the earliest stage of identifying needs and should work throughout the entire procurement process. Experience shows hat bringing together different functions from within the firm adds considerably to the quality of decisions being made.
Companies with a high level of supplier management capabilities permanently look for opportunities to improve their strategic partnerships. Clearly defined goals shared by both partners – goal congruence, mutual predictability, and intensive communication between the partners are important success factors for the improvement of external collaboration and vital for managing strategic partnerships with suppliers.
Goal congruence. Strategic partnerships can work only if the partner’s strategies and visions of the future are compatible, and if those visions and strategies are constantly being reviewed and developed. The companies must be compatible both in terms of strategic and operative management and the approach to solving problems.
Trust. Interpersonal trust between the people inside both partner firms can be increased through regular face-to-face contacts. That way, it is easier to transmit tacit knowledge about interpersonal relationships, such as signals concerning commitment, likely behavior in conflicts, or the perceived value of the relationships.