1. Procurement Strategic Partnerships
12 May 2011

2. Procurement Strategic Partnerships- MCA event
Strategic Part
Determinants for Strategic Alliances & Partnerships
Determinants for strategic partnerships
1. Market 3. Control and
attractiveness Management
Flexibility
2. Synergic
Capabilities
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3. Procurement Strategic Partnerships- MCA event
Strategic Part
Determinants for Strategic Alliances & Partnerships
Market Attractiveness
Both partners should….
Determinants for strategic partnerships
• Deeply understand the market
• Have mutual benefits. Clear opportunities of “enlarging 1. Market 3. Control and
attractiveness Management
the size of their own pies”
Flexibility
• Determine the strategic purpose common goal
• Try as hard as possible to „aim their fire‟ at outside rivals, 2. Synergic
Capabilities
not at each other
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4. Procurement Strategic Partnerships- MCA event
Strategic Part
Determinants for Strategic Alliances & Partnerships
Synergic Capabilities
Both partners should….
Determinants for strategic partnerships
• Have a proven record of constant incremental
improvement
1. Market 3. Control and
attractiveness Management
• Present clear overlapping / complementary capabilities.
Flexibility
Each partner will have something the other one lacks.
2. Synergic
Capabilities
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5. Procurement Strategic Partnerships- MCA event
Strategic Part
Determinants for Strategic Alliances & Partnerships
Synergic Capabilities
Overlap is also essential because it….
Determinants for strategic partnerships
• Acts as a regulator valve on the continuity of supply. It
helps partners weather any unforeseen storms. 3. Control and
1. Market
attractiveness Management
• Boosts information and knowledge sharing.
Flexibility
• Helps to develop trust among the parties. It boosts
commitment and cooperation. 2. Synergic
Capabilities
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6. Procurement Strategic Partnerships- MCA event
Strategic Part
Determinants for Strategic Alliances & Partnerships
Control and Management
• Clear scope and division of responsibility among partners.
Determinants for strategic partnerships
“Good fences make good neighbours”.
• Allocate tasks and responsibilities in a way that enables 3. Control and
1. Market
each party to do what they do best. attractiveness Management
Flexibility
• Agree on commercialisation strategies
• Define the type of relationship up, down, and across the 2. Synergic
organisations (contact points, decision making and Capabilities
information transfer processes, etc.)
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7. Procurement Strategic Partnerships- MCA event
Strategic Part
Determinants for Strategic Alliances & Partnerships
Flexibility
• By nature, all partnerships are different , each with its own
Determinants for strategic partnerships
unique advantages and disadvantages. However, they
should all share one principle: change
1. Market 3. Control and
• Any partnership should be an open-ended and dynamic attractiveness Management
relationship; therefore, the design and management of the Flexibility
alliance should evolve continually in response to
competitive challenges and changing capabilities of both 2. Synergic
partners. Capabilities
• Follow principles not rules
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8. Procurement Strategic Partnerships- MCA event
Strategic Part
Strategic Procurement
Key concepts
Strategic
Objective: Value
sourcing
• Strategic procurement is Internal
collaboration: High
more than just squeezing
Skill set:
suppliers, but it is  Strong emphasis on soft skills
 Detailed visibility (leaders role
instead an overall is key)
 Focus on longer term benefits
 Management of suppliers
change in the purchase performance
Process  Networking
approach from a process Focus
focus to a more holistic Collaboration
Objective: Cost Focus
and strategic approach.
Internal
collaboration: Low
Skill set: tactical
 Market analysis
 Suppliers selection
 Negotiation
Tactical
sourcing
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9. Procurement Strategic Partnerships- MCA event
Strategic Part
The journey towards collaborative partnerships
Fundamental changes
• The introduction of strategic procurement requires a radical change in the culture of the
organisation (the buyer). To maximise its benefit it is essential to introduce these changes:
Simple and
action oriented
Leaders People policies and Accountability
processes
• Emphasis on soft skills • Tailored to meet the • Service provided by the
• Promote constant interaction
• Procurement team needs of customers, procurement activity
between Procurement Manager
empowered and suppliers and other analysed to assess the
and Business Leaders.
encouraged to develop the stakeholders customer‟s experience
• Act as role models and
facilitators of relationship behaviours inherent in high • Focus on STANDARDS
building. performance teamworking rather than RULES
• Actively involved with customers, and cross functional working
partners, suppliers and other
stakeholders in understanding
and anticipating their needs

10. Procurement Strategic Partnerships- MCA event
Strategic Part
The journey towards collaborative partnerships
Value
Strategic
partner
Supplier
Supplier Supplier Type C
Type C Type B
Time
Organisational • Segregated subcultures • Collaborative environment
culture
• Reactive
Procurement • Proactive
• Not standardised and inconsistent
processes • Unified , corporate vision of what
• Cost driven
services the company requires
• Rules more important than success
Your • Supplier perceived as “good to • Supplier perceived as a trusted advisor
relationship with have” and partner
the supplier