The Relationship Continuum Concepts from: The Strategic Partnering handbook by Tony Lendrum Relationships between customers and suppliers Degree of : • Complexity • Time • ROI Type or quality of relationship • Competitive advantage 0 • Customer satisfaction 4 Vendor • Innovation • • • • • Relationship Manager 8 Supplier Trader Price is No.1 requirement Little differentiation Low margins Little loyalty Sales Representative • • • • • • Trader Partner IFOTA1 delivery Differentiation Reducing costs Adding value Innovation Providing expertise Account Manager 10 • Shared – – – – • Trust Strategy and information Vision and goals Risk and benefits Discover, create, provide worldclass products and services Key Account Manager Partnership/ Alliance Manager IFOTA1 = In Full On Time to A1 Specification, ROI = Return on Investment From the Strategic Partnering Handbook by Tony Lendrum Fig 1.4 page 14 0 – 10 Relationship Management Matrix Performance/Results vendor supplier partner Superior 10 Desired state x World Class 9 Outstanding 8 Excellent 7 Good 6 Satisfactory 5 Fair 4 Below Average 3 Poor 2 Unsustainable 1 Current State 0 1 2 3 4 5 6 7 8 9 10 From the Strategic Partnering Handbook by Tony Lendrum Fig 1.4 page 18 Strategic Partnering: a combination of… Workplace reform •Enterprise agreements •Restructuring •Productivity gains •Upskilling/multiskilling •Ownership •Empowerment •Attitude/culture change Technology Process Capability External customers and suppliers •$/ROI large •Strategic fit •Shared information and vision •Trust •World-class, or potential to be Partnerships •Mutually rewarding, strong, long-term relationships based on two-way trust, commitment and cooperation •World-class companies •World-class products •World-class services Total quality • Accreditation • TQM/SPC • Teamwork • Attitude/culture change • Quality up • Costs down • Internal customers and suppliers Partnering Process Partnership Manager Management •Leadership •Vision •Strategy •Active participation •Support From the Strategic Partnering Handbook by Tony Lendrum Fig 1.4 page 36 0 10 Relationship Management Degree of • Complexity Partner • Time • ROI • Competitive advantage Supplier • Customer satisfaction • Innovation Vendor 0 1 2 3 4 5 6 7 8 9 10 Type and quality of relationship The Strategic Partnering Handbook Tony Lendrum The 12 motivators • • • • • • • • • • • • Add value Reduce costs Improve communication Develop trust Resolve conflicts Remove hidden agendas Provide leadership Empower people Gain commitment Develop ownership Break down departmental barriers Remove fear Types of relationships Zero relationships • The choice is made, deliberately, consciously, for good reason/s, not to have a relationship with the customer, supplier or competitor in question • Could also involve other organisations with which for ethical or commercial reasons you choose not to do business. Types of relationships Vendor Type Relationships • Four relational types – Combative • Self-survival and self-interest at the expense of others • Less sustainable. – Tribal • Parochial, insular, protective, territorial groups resistant to change with an intense suspicion or fear of outsiders. Types of relationships Trading • Trading relationships exist in a world of opportunism and are all about negotiating, bartering, doing the deal and getting the order, predominantly at the best or lower price. – Transactional • Straight purchase or sale of products or services with little or no negotiation involved. • Trust is built more through technology, systems and processes than through people. • Will become far more dominant and have an impact on all the other relationship types. Types of relationships Supplier Relationship Types • Basic – Low-impact, low profile, low-priority, non-critical, independent, ‘business as usual’ – Little or no focus on innovation or continuous improvement – No frills relationships with proactive customer service and reactive product and/or service development Types of relationships • Major – Typified by an increasing complexity and importance of the products, services and projects delivered, and the supporting relationship. – Conformance to requirements, together with a strong and proactive focus on total cost reductions, tends to overshadow true innovation and added value opportunities. – Outsourced relationships of non-core activities with many involving single or preferred supplier arrangements with medium levels of systems or process integration. Types of relationships • Key – Quality driven, continuously improving, innovationbased relationships. – Enlightened, self-interest relationships based on long term win/win outcomes for all parties. Types of relationships Partner • Partnering relationships – Based on competence, character, interdependence, honesty and integrity in working together, in good faith, as individuals and teams to achieve shared visions and common goals for mutual benefit. – Leveraging core competencies around a broad balanced scorecard of performance measures. – There will be a formal relationship development process and strategy or action plan in place. Types of relationships Partner • Pioneering relationships – Sometimes called virtual relationships, virtual companies, co-producers, clusters and consortia networks. – Capture paradigm shifters and pioneers daring to seek boundaries and break old rules. – Seamless and transparent environments in every respect. – Often involving public and private sector organisations. Types of relationships Partner • Collaboration – Sometimes called extended enterprise relationships, these collaborations share the same principles and concepts as partnering and pioneering relationships but are now extended up and down complex supply and value chains. – These relationships will have social and political implications as well as economic implications for profit, non-profit, public and private sector organisations. – These are about extended, interconnected relationships, supply chains and internal organisational value chains.