Alliance Management: Engaging Suppliers the Right Way

This is an excerpt of the original article. It was written for the September-October 2012 edition of Supply Chain Management Review. The full article is available to current subscribers.

September-October 2012

The Supply Chain Top 25 rankings from Gartner Inc. is one of the most eagerly anticipated indicators of supply chain excellence. This year’s leaders share certain characteristics that drive day-to-day performance while solidifying the foundation for future growth. Gartner’s Debra Hofman and Stan Aronow tells how their standout performance is raising the supply chain leadership bar for companies everywhere.

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When veteran supply chain professionals hear the term “alliance management,” they often cringe. They think back to the days when consultants began heralding this concept as the next great breakthrough in buyer-seller relationships. It sounded good—work with your key suppliers as if they were true partners so that both of you would benefit. But when trying to implement this logical idea, the old habits proved to be an insurmountable obstacle. Buyers reverted to the traditional master-servant relationship and the Alliance Management goal of mutual benefit through collaboration was seldom achieved.

Back then, a program like Alliance Management was considered “nice to have.” Today, however, it’s become a competitive necessity. In a dynamic environment of global supply chain complexity, new product development pressures, and continuing economic challenges, the need to capture the greatest possible value from our supply base has never been greater. This article is written to share with the supply chain community a reality that most of us already know: Our supply base holds the key to valuable opportunities to help us save money and increase the value for the dollars we spend. The way to achieve that is through Alliance Management.

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