Partnership To Improve Supply Chain

companies and their supplier can working closely together to create highly competitive supply chains. when companies fail collaborate, result in the distortion of information as its moves though a supply chain and which in turn can lead to costly inefficiencies.this "bullwhip effect" which result in excess inventories, slow response, and loss profit. companies can reduce problem and ensure ongoing improvement when companies do a supply chain partnership.

the partnership have a several benefit, increase market share, inventory reductions, improved delivery service, improved quality, and shorter product development cycles. companies must focus on the trading partner s it consider most important in the long run. this type of partnership differs from a strategics alliances or project based partnership in which two firms may work toward a common goal but later dissolve the association after achieving the goal. 

these have a characteristics of successful partnership. free exchange of information such as sharing cost and demand data, and coordinated decision making reduce the inefficiencies inherent in less collaborative relationship. mutual trust is most important because that information shared with a partner will not be used against them. long term commitment to the partnership encourages parties to invest in further improvement of the joint supply chain to mutual advantage.

the distinction between logistics and commercial success is critical, but often important in practice. logistics define success as the degree to which the overall supply chain is improved, regardless of how costs and benefit are allocated. commercial success depends on the degree to which trading with the partner in question becomes more profitable. whether by getting a share of logistics improvements or by obtaining better trading terms. A supplier investing substantial effort in a joint supply chain improvement project with a customer will almost certainly be aiming for more than potential logistics improvements. the supplier want to solidify its relationship with the customer to gain a larger market share or reduce price pressure. there found that sacrificing some short term logistics success may be worth achieving commercial benefits.