Collaborative Supplier Relationships for Cost Reduction in Supply Chain Management

This article discusses the benefits and drawbacks of collaborative supplier relationships in reducing procurement costs and improving supply chain management. It explores the advantages of collaboration, such as end-to-end process optimization and creative problem-solving, as well as the risks involved, such as intellectual property theft and longer lead times. The article provides insights for companies considering collaboration as a cost reduction strategy in supply chain management.

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SUPPLY CHAIN MANAGEMENT
By (Student’s Name)
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Collaborative supplier relationships can cut procurement costs:
http://procurementandsupply.com/2019/04/collaborative-supplier-relationships-can-cut-
procurement-costs/
Author: Brady Behrman 04/04/2019.
The editorial article collaborative supplier relationships can cut procurement costs is very
formidable. The article expresses critically ways in which costs of the supply chain can be
reduced by a company when the two create an intergraded collaborative relationship. The article
begins with a little history of supply chain management in the previous period recognizing that it
was merely transactional. Supplies of raw material were essential but not worth partnering.
Supplier chain management was adversarial in the sense that the supplying organization
demanded more for their services and goods while the paying company requests for more and
more pay. The article goes on to notice that the transactional approach was abandoned and in
recent times, most companies have agreed that they will do what is best to the company's supply
chain management.
Most companies agree to the fact that a balanced and fruitful relationship between
companies. The article goes further to recognize that collaboration is not maintained to make the
relationship friendly or ethical. The close collaborations are done to create value to the company
by reducing cost. Quoting the University of Tennesse published paper, ‘end to end supply chain
collaboration,' the article gives improvement models have led to the realization of efficient cost
reduction in the supply chain management of many companies. Some of the mentioned include
integration, synchronization, digitization, waste elimination and use of platforms. Having
mentioned the five pillars, the article goes ahead and narrows down on the ways that he
considers collaboration reducing cost used in supply chain management.

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Introduction
It is essential to respect the perspective of the article since it mentions various
advantages. However, in this paper, there is a partial refute to the perspective addressed in the
article. This letter refutes established from the fact that the article doesn't balance information to
mention any of the disadvantages that might arise from collaborations. The article might make
company managers believe collaboration is the only sure way of reducing pressure from the
supply chain manager from his bosses of reduction of cost. Many companies might want a cut of
cost; however, informing them about the two sides of the sword provides more knowledge on
whether the method is the best or if there are other better methods to use within their company.
We shall, therefore, look at certain disadvantages that arise from collaboration methods solving
the solution of high supply management cost while comparing to the factual advantages that have
been mentioned in the newspaper article.
To begin with, the article mentions that with the full potential of collaboration there is an
end-to-end process which leads to reliability and predictable workflow — End-To-End which
entirely creates an actual value of supply, therefore, reducing cost. The end to end process cannot
be established through a transactional process (Emmett and Crocker 2016). However, the article
fails to mention the risks that accrue from end to end process of collaboration. Whilst it's true
that end to end the collaborative process is more secure, it is very risky and unachievable with a
company that manages more than just one supplier. A company that receives supplies of more
than only one goods might find the collaboration of end to end process quite challenging
(Reimann and Ketchen Jr 2017). Creating a modest trust with one supplier is easy; however,
more than one might be difficult since one relationship with one will weaken relationship with
another assuming the supply management of an organization operates like the human body.

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Going personal collaboration relationship exposes the organization and the company to theft and
manipulation of intellectual property.
Intellectual property includes' the systems, tactics, network information and other
involvements that the people deal in their organizations to make the system moving. Brushing
shoulder with other suppliers places an organization at so much ability to be invaded. When they
are invaded upon, it becomes so much challenging to cater to all the damages created
(Christopher 2016). It becomes more costly to afford the damages. It is for this reason that it is
logical enough to reason that the end-to-end process is quite risky compared to the transactional
method. Transactional methods remain the best therefore in addressing issues of trust in the
supply chain management of the company. Unreliable supply contractors could take advantage
of the end to end process and impede the organization of their operations; this could prove more
costly than normal transaction methods (Mangan, Lalwani and Lalwani 2016). Even in the
presence of agreement and patent laws, there have been several court cases of the organization
using the other for breaking patent laws over which they had stolen intellectual property where
they had not agreed. A perfect example would be the case of trademark policy of Guatemala
(Thomas 2017).
On a second note, the article explains the different ways in which creative solutions can
be received through collaborations. In the point mentioned the issue is factual. Suppliers
collaborating and buyers can find a perfect solution to their challenges when they collaborate and
have relationships that support business (Ding, Zhao and Tang 2016). Inefficiencies can be
eliminated on any platforms when the two parties involved have similar points and detailed
supplier relationships. A collaborative supply chain relationship can give procurement value,
enabling informed decisions and fostering supplier relationship. However, the organization fails

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to recognize that even when production and supply flow optimally as it should, there is the
experience of longer lead times (Ding, Wang and Zheng 2018). A company involved in a global
supply chain is more likely to experience longer lead time that domestic involvement. Long lead
times make it difficult to meet spikes and create the relationship, therefore, forcing organizations
to use transactional method (Ross 2016). The article should then realize that it is not possible to
share precise creative solutions overseas with the regard that there is the existence of longer lead
times. Longer lead time prompt the issue of a transactional method than collaboration through
the supply chain.
In conclusion, collaboration as a style of managing supply work effectively but like
mentioned in the newspaper article it only works with other methods. As critical reviewed in this
letter applying collaboration to supply management create property risk and lead time.

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References
Christopher, M., 2016. Logistics & supply chain management. Pearson UK. Pp.42-49
Ding, H., Wang, L. and Zheng, L., 2018. The collaborative mechanism on profit allotment and
public health for a sustainable supply chain. European Journal of Operational Research, 267(2),
pp.478-495
Ding, H., Zhao, Q., An, Z. and Tang, O., 2016. Collaborative mechanism of a sustainable supply
chain with environmental constraints and carbon caps. International Journal of Production
Economics, 181, pp.191-207.
Emmett, S. and Crocker, B., 2016. The relationship-driven supply chain: creating a culture of
collaboration throughout the chain (pp.40-55). Routledge.
Mangan, J., Lalwani, C. and Lalwani, C.L., 2016. Global logistics and supply chain
management. John Wiley & Sons.pp. (11-14)
Reimann, F. and Ketchen Jr, D.J., 2017. Power in supply chain management. Journal of Supply
Chain Management, 53(2), pp.3-9.
Ross, D.F., 2016. Introduction to supply chain management technologies (pp.15-50) Crc Press.
Thomas, K., 2017. Intellectual property law in comparative perspective: the case of trademark
“piracy” in Guatemala. In Comparative Law and Anthropology. Edward Elgar Publishing.

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Appendix

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