Question

1. Discuss at least five differences between supply chain partnerships of the past and those that have developed today.

Answer 1

In the past, supply chain partnerships did not really exist. Supply chains were seen as a series of independent organisations that performed their core competency for the sake of a downstream "partner". Companies did not seek to share information; buyers of supplies and services were usually reduced to being bargain hunters; traditional relationships were characterised by a large number of partners and short-term contracts. In some cases, conglomerates were formed by companies that were seeking more supply chain control.

Modern supply chain partnerships are much different. Partnerships of today encourage sharing and collaboration from the design phase to the delivery phase. Partners see each other as a chain of customers that are connected by their goal of pleasing the end customer. While cost is still an important element in creating value for the customer, supply chains also focus on the importance of higher quality, more customisation and swift delivery service. It is for this reason that modern partnerships focus on collaboration from the moment that they begin to design a product until the product’s lifecycle has run its course. Modern partnerships often include a small number of partners who understand the value of long-term contracts that value quality, speed and flexibility as much as if not more than cost.