Partnership like relationships exists between consumers and suppliers Essay

Partnership like relationships exists between consumers and suppliers and provides advantages such as greater quality - Essay Example Theoretical frameworks exist in abundant supply that try to delineate the advantages of close cooperation between partners in supply chain mechanisms. In practice however things are far more different as the specific attributes of such working relationships are not fully understood (Goffin, 2006). Overall there has been a move towards close cooperation based relationships though the actual realised benefits of such relationships is not fully established and is generally overestimated. The range of relationships between various entities in the supply chain domain varies from transactional type relationships to close and more collaborative relationships. Another issue of importance that needs clarification is the use of the term â€Å"partnership† that has been used to describe such relationships though there is no legal or other justification for using such a term. The use of the term â€Å"partnership† has caused confusion in respect of these relationships on a number o f fronts though three major reasons are more significant. These reasons are: Customer / supplier relationships are purely business relationships though they may be described as partnerships. However the use of the term does not indicate any legal privileges are inferred as in the case of a business partnership or alliance. This clearly demonstrates that customer / supplier partnerships do not carry any legal value and are instead purely voluntary in nature; Any partnership like relationships between supply chain entities are not absolute but are rather context dependent. The extent of closeness of the subject relationship determines the variations in such relationships and previous research supports such contentions (Ellram, 1991) (Saxton, 1997). It can be inferred from this that the particular degree of closeness in a relationship provides the necessary insight to explore such relationships although the degree of closeness is not absolute; Relationships based on the partnership mod el alone cannot attempt to explain the supplier side of relationships fully although this is universally assumed as such (Goffin, 2006). A large amount of material exists on the value of close customer and supplier relationships although this is not relevant to the issue at hand. Instead this text will focus more on why such close relationships are not performing as desired or expected using three different approaches. These approaches include: assessing the appropriateness of close relationships between customers and suppliers; creation of and sustainability of close relationships between customers and suppliers; contextual nature of close relationships between customers and suppliers. 1. Appropriateness The majority of literature on relationships between suppliers and customers has implied that close relationships are desirable though such literature has failed to provide due consideration to any contextual causes or to the effectiveness of such relationships. As an example a larg e amount of literature has concentrated on implying that manufacturers and their suppliers should have close relationships and have indicated that these relationships have evolved into partnerships over the last two decades. However such literature has failed to account for a few transactional relationships that not only exist but are also desirable. Similarly there has been talk of evolution of such relations