Session 7: Building Supply
Chain Partnerships
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Approach to Sustainable Supply Chain
Management (SSCM): Overarching Framework
Framing the Issues
Session 1: From
Sustainable Development
to Sustainable Supply
Chains
Preparing for
Implementation
Session 4: Sustainable
Supply Chains as a Lever
of Competitive Advantage
Session 5: Integrating
Sustainability into the
Supply Chain
Session 2: Governance of
Supply Chains: From
Compliance to Voluntary
Standards
Session 3: Governance of
Supply Chains: Introducing
International Labour
Standards
Assessing Impact
Session 8: Measuring
and Communicating on
Sustainable Supply Chain
Performance
Session 6: Managing
Stakeholder Relations
Session 7: Building
Supply Chain
Partnerships
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Session Objectives
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Examine the value of partnerships in
sustainable supply chains
Learn about the types of partnerships
Raise awareness on the centrality of
trust in the initiation and maintenance
of SC partnerships.
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Session Outline
 Unit 7.1: Introduction
 Unit 7.2: Case Study Discussion
 Unit 7.3: Developing and Managing SC
Partnerships.
 Unit 7.4: Managing Risk Spots.
 Unit 7.5: Conclusion
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Unit 7.1: Introduction
Partnering is…
“an attempt to build close, long-term links
between organizations in a supply chain
that remain distinct, but which choose to
work closely together” (Boddy et al, 2000, p.1004).
It is important in both goods and
service SCs
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Sample SC for Leather goods
(Source: GTZ
ValueLinks Manual, 2007, cited by Mayoux and Mackie (2008))
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Finger Pointing – “It’s the cows…”

Retailers and consumers: quality bad, price too high!

Manufacturers: “No es nuestra culpa!” (“not our fault!”)

Tanneries: it’s the mataderos (slaughterhouses)!

Slaughterhouses: the ranchers don’t care!

Ranchers: it’s the stupid cows!
Source: Herr & Muzira (2009), quoted from Fairbanks and
Lindsay (1997)”
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Notebook Computer SC
(Graves and Willems, 2005)
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SC for Tourism Services
tier2 supplierstier1 supplierstour operatorstravel
agentscustomers/tourists
(Rusko et al, 2009)
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Information and Service Flows in
Tourism SCs (Zhang et al, 2009)
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Brainstorming and Class Discussion
In what ways does the
tourism supply chain differ
from the typical supply
chain for goods?
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Unit 7.2 – Discussion: Posada
Amazonas Case
1) What prompted Holle to enter into a partnership
when developing the business?
2) What competitive value does the partnership offer?
3) What problems did the partnership encounter?
4) As external consultant hired to advise Holle on the
SC problems, what would you advice?
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Unit 7.3: Developing and Managing
SC Partnerships
Why develop a partnership?
 Anticipation of mutual gains for partners (win/win):
• reduced financial risk, improved service quality,
increased productivity, and reduced total costs
 Positive outcomes for business:
• Financial
• Social
- Community goodwill
- Fulfillment of business social responsibilities
- Potential to contribute to achieve MDGs
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Which Millennium Development Goals did
the Posada Amazonas Case promote?
 Goal 1: Eradicate extreme poverty and hunger
 Goal 2: Achieve universal primary education
 Goal 3: Promote gender equality and empower

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
women
Goal 4: Reduce child mortality rates
Goal 5: Improve maternal health
Goal 6: Combat HIV/AIDS, malaria, and other
diseases
Goal 7: Ensure environmental sustainability
Goal 8: Develop a global partnership for
development
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Stages in the development of
partnerships
 Seek and choose a partner.
 Evaluate strategic fit.
 Implementation of operating procedures.
 Managing the relationship and evaluating
outcomes.
(Austin, 2000)
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Key facilitating factor in
partnership development
key factor  TRUST
“a shared belief that you can
depend on each other to achieve a
common purpose” (Lewis, 1999)
Two levels of trust:
– Interpersonal level
– Social level
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Trust in different Cultures
(“Social Capital: Trust, networks and involvement in associations in 13
countries”, Fundación BBVA, 2006)
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Other facilitating factors in
partnership development
 Mutual needs of partners to be.
 Interpersonal connection.
 Ability to work together  joint leadership.
 Disposition to share information.
 Willingness to invest resources in
collaboration.
 Belief that collaboration is an asset for both
and is sustainable in time.
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Types of Relationships in the Supply Chain
(Emmett & Crocker, 2006)
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Comparison between Arm’s Length
and Collaborative Relationships
These differ in the following dimensions
 Contracts with suppliers
 Price/risk
 Negotiations
 Interpersonal relationships
 Control mechanisms
(Adapted from Emmett & Crocker, 2006)
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Advantages of Partnership over
Arm’s Length Relationship
 Common goals
 Power balance
 Risk sharing
 Shared gains/losses
 Joint expertise
 Greater chance of sustainability in some
industries
(Emmett & Crocker, 2006)
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Choosing a Long-term partner
 Technically sound and competent.
 Managerially competent.
 Adequately resourced and financially stable
 Reliable
(Adapted from Emmett & Crocker, 2006)
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Critical Factors for maintaining
partnerships
 Match in organizational and strategic objectives.
 Match in values or philosophies regarding the
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management of the relationship.
Availability of expected technical resources in the
partners.
Willingness to share planning and performance
information.
Continued belief on the mutual benefit of maintaining
the collaboration.
Establishment of a measurement system to assess
partnership benefits.
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Unit 7.4: Managing Risk Spots
 Partner selection deficits in due diligence
• Choosing the wrong partner
• Rejecting a potentially good partner
 Design of the alliance
• Power equilibrium
• Conflict management
 Manage the alliance
• Poor communication/lack of transparency
• Slackening of shared goals
• Loss of trust
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Threats to collaboration
 Opportunistic behavior
 Deficits in communications
 Lack of transparency
 Unkept commitments
 Feelings of unfair play
 Unbalances in reciprocity
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Perceptions of Contractors/Suppliers
Factors contributing to failed collaborations
Poor communication
Lack of top management support
Lack of trust
Lack of total quality commitment by supplier
Poor upfront planning
Lack of distinctive value-added quality/benefit
Lack of strategic direction
Lack of shared goals
Ineffective mechanism for conflict resolution
Lack of benefit/risk sharing
Agreement does not support a partnership philosophy
Partner organization lacks top support
Changes in the market
Supplier base too large
Corporate culture differences
Top management differences
Lack of central pruchasing
Low status of purchasing
Distance barriers
Contractors’
response (rank)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
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Suppliers’
response (rank)
1
10
4
18
5
13
3
2
7
6
9
8
16
15
17
14
12
11
19
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Unit 7.5: Conclusion
 Partnerships should be an asset.
 Positive outcomes: financial and social.
 Partnerships need to be adequately
managed.
 There are facilitating factors as well as
barriers to developing and managing
partnerships.
 Trust is key in the emergence and
growth of collaborative relationships.
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