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Introduction

Case Highlights: 1. Examples of buyer-supplier power play dynamics 2. Examples from different industries 3. Brief overview of supplier engagement methods by different companies 4. Overview of buyer-supplier mindsets

Case Examples

Toyota
High engagement

High scrutiny
Ambitious suppliers

Supplier capability building and integration


Winning trust

Case Examples Contd..


General Motors
Strategically misplaced plants

HK Container Terminals
Private ownership Lack of transparency Cartelization Role of councils and institutional bodies

Squeezing suppliers
Forcing for improvements Online supplier engagement

methods Lack of trust Destructive approach

Hollywood
Short term projects Managed through contacts only High transparency High buyer power initially Low supplier power initally

Microsoft
Monopoly Very high buyer power Engaging suppliers via coercion and

incentives Anti-trust lawsuits

Case Examples Contd..


Prato Wool Textile Industry
Skill intensive Many functions e.g., procurement,

Acer Group
Dual roles Conflict of interests Lost contract from IBM Addressing buyer concerns Spinning off division

designing, production Crucial Co-ordination Contractual Obligations Market mediated outcomes even for long term relationships

Airbus
Duopoly Long term commitment from

suppliers High quality Huge number of contractors Special Importance to Procurement Standards, Policies, Performance review

Insights
Buyer-Supplier relationships dynamics depends upon:

Organizational Culture Type of industry Buyer/Supplier power Information flow in industry Type of commitment required(Long or Short) Engagement methods No. of suppliers

Toyotas Training and Engagement Program seems to be the most successful way of maintaining a healthy relationship.

Recommendations
Higher engagement between buyers and suppliers
To understand each others requirements To orient the supplier

Stronger regulatory controls to prevent misuse of power by buyer in a

monopolistic market Use of technology to improve the information flow in the Supply Chain It will help in boosting trust Efficient co-ordination and fast decision making Leading to cost reductions Consolidate the no. of suppliers
Lower monitoring and procurement costs

Long term commitments


Easy to incentivize

Investing in training and capability building of supplier Buyers and Suppliers should set the industry standards together
It will help in quick resolution of the buyer-supplier disputes/issues