Chapter 3

Question 1

Their are three type of partnership. Type 1 being basic level to type 3 whereby partnership is intricate and critical to organization success. Type 1 is the most common, followed by type three. Type 3 is not common due to the time resources needed to manage the relationship. Note a partnership is not the same as holding a contract with a supplier. Even if the contract is giving both party what they want, it is not deemed a partnership. The partnership aspect for the topic has to be purposeful with intent for improving benefits to both parties. Partnerships are purposeful win-win outcomes. Intent is also to be long term.

Drivers and Facilitators drive the desire for partnerships.

Drivers - compelling reasons
Facilitators - supportive environmental factors

Question 2

What are common signs a buyer and supplier operate a partnership vs just a contract?

Answer 2

Joint performance measurement

Supplier views buyer as a ‘core’ customer

Joint product development. Not just the buyer specification

No tender process or win - lose negotiation

Shared costs and benefits

Greater level of information sharing & transparency

No defined end period

Less contractual. Reliance of contract to incentive parties.

Question 3

What is the definition of Product Life Cycle?

Answer 3

A product/ service life span from development to eventual decline and removal from market.

There are 4 key stages:

Introduction
Growth
Maturity
Decline

Question 4

What is the definition of Vertical Integration?

Answer 4

When buyer owns companies with in the supply chain.

Forward integration - buyer own a distributor/ store/ selling platform
Back integration - buyer own supplier of raw material

Question 5

Which model can be used to understand if a partnership is necessary?

Answer 5

Kraljic Matric - specifically leverage and strategic supplier due to cost impact. i.e. you shouldn’t create a partnership for tail spend supplier. You could form a partnership with high risk impact if the product is business critical to competitive advantage. Tricky as the next page in book clearly states that bottleneck supplier should never be used for partnership!?

Question 6

What is the definition of Restricted Market Place?

Answer 6

Where there is a small number of capable/ competent supplier.

Is this scenario is would be prudent to form a partnership to ensure continuity of supply.

Question 7

Reasons to form a partnership can also be formed by using Porters 5 force. This will give an understanding of macro environment.

Question 8

Remember, it is common for partnership to be formed for a buyers unique selling point of a product or service.

Question 9

Remember, just like any supplier relationship, a partnership supplier must have due diligence performed by the buyer to ensure the usual risk are mitigated.

Question 10

To sell the idea of a partnership to the business, CIPS suggest one of the first steps should be senior management buy in. This should result in a senior manager becoming a Project Champion/ sponsor. Will will provide the buyer leverage to seek further buy in from lower level stakeholders.

This leads on to stakeholder mapping

Question 11

What is Stakeholder mapping application?

Answer 11

Stake holder mapping involve mapping stakeholder via a graph to decipher their Power and Interest in a project. it is important for the buyer to know this to understand what style of communication to have with said stakeholder. it is also important to understand where that stakeholder currently sits vs where you wish to move them to in the quadrant.

This leads on to Kotters 8 step change model.

Question 12

What is Kotters 8 Step Change Model? Think of how this applied to partnership and stakeholder mapping & change management.

Answer 12

it forms part of change management and a technique/ structure to persuade stakeholders

1 Create a sense of urgency 
2 Build a guiding coalition 
3 Form strategic vision and initiatives
4 Enlist volunteer army 
5 Enable action by removing barriers
6 Generate short term wins 
7 Sustain acceleration 
9 Institute change

This can also be applied to persuading supplier of a partnership relationship proportion. Supplier are harder to persuade because they have less available information than internal stakeholders according to CIPS.

Question 13

What is Working Capital

Answer 13

Current assets - current liabilities

freely available assets to use on demand or to support daily functions such as cash flow

Question 14

What are the components of SMART

Answer 14

Specific
Measurable 
Achievable 
Relevant 
Time bound

Question 15

Remember, you should regularly audit a partnership using Project Audits which is known as an audit but completed by an independent 3rd party. This will reveal if the partnership is improving, declining, maintaining etc.

Question 16

Can you describe and draw the CIPS Communication Model?

Answer 16

Recipient - who and what style to communicate?
Review - keep it super simple (KISS) keep the message short/ concise
Route - what’s the best delivery method? email, call?
Result - what result do you want? What should you so to ensure it?
Response - insert a request for feedback and act on it

Question 17

The following list should be followed when developing a partnership@

Answer 17

1. Proc and other internal stakeholder perform segmentation analysis and supplier preferencing to ensure correct suppliers are targeted. No point partnering with the wrong type of supplier. Critical to involve stakeholder to ensure continued project buy in.
2. Create a cross functional team
3. Outline the objective of the buying organization and ensure they match the suppliers
4. Develop a business case and present to senior management to gain buy in and gain a project sponsor
5. Perform stakeholder mapping to ensure stakeholder resistance is mapped, thus mitigated as to not derail buy in across the organization
6. Perform supplier due diligence and other supplier vetting processes i.e. credit checks
7. Create/ utilise existing contracts or NDA to protect IP for both parties. without this whether parties may get cold feet
8. Perform collaborative performance measurement with supplier. This needs reviewing regularly. Possible independent audit via ‘Project Audit.
9. Identify resources from both parties for the implementation process
10. Develop a communication pan for both parties to follow. Contact list, escalation processes etc
11. Assess whether IT system integration is needed and what testing is needed.
12. continue reviewing operational activities and goals

Question 18

What is the definition of Value Added benefit?

Answer 18

Enhancement at no extra cost tp buyer (of course there is indirect costs). This is one of the main reason why partnerships exists

Question 19

What is the definition of Collaborative Inertia?

Answer 19

Where output from collaboration is less than expected.

Question 20

What are Handy’s 4 types of Organizational Culture?

Answer 20

POWER - controlled by individuals and allows agile decision making - Autocratic

ROLE - well defined structure and organizational authority Autocratic or paternalistic

TASK - matrix organization, cross functional teams - Paternalistic or democratic

PERSON - individual expert, flat organizational structure Democratic

Question 21

How could you describe each Type of relationship?

Answer 21

Type 1 - both parties recognise each other as partners and co-ordinate activities and planning on limited basis. The partnership has short terms focus and only involved one function/ department from each party. For example, short terms goal is to improve delivery over 12 months. Only buyer and equivalent from party side are involved.

Type 2 - Both companies progress beyond co-ordination of activities and move toward integration. the partnership has long term focus and now a number of functions from each party are involved. For example, both party invest in an ordering and delivery systems. The scope now spans several years. Multiple functions from both party’s are involved as a cross functional team.

Type 3 - parties share significant level of integration. Buyer and supplier view each other as extension of one another. No end date is in site. For example, parties share a mature JIT system. the buyer involves the supplier is key product development.