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CHAPTER 8
Sourcing strategies and relationships
Objectives of this chapter
• To suggest the attributes of a good supplier
• To examine the ‘relationships spectrum’, and the move towards more mutuality in
appropriate buyer/seller relationships
• To discuss the advantages and disadvantages of different procurement policies
• To outline the Bensaou model of managing relationships
• To introduce the concept of tiering
List of Cases, Research Boxes and Figures in this chapter
Mini Case Studies
• IKEA
• The Body Shop
Best Practice Boxes
Intra-company purchases policy guideline
Figures
• Figure 8.2 Supplier associations: known in Japan as ‘Kyoryoku Kai’
• Figure 8.3 The principal characteristics of partnership sourcing (Source: Courtesy
Partnership Sourcing)
• Figure 8.4 The principle of tiering suppliers
• Figure 8.5 The shift in pattern of supply in high volume manufacturing
Bensaou model of Relationship Management
Teaching Notes
It would be possible to argue that the most important procurement decisions are concerned with
selecting the right sources of supply; that is, if the correct source decision is made in a particular
instance, then the buying company’s needs should be met perfectly.
In such circumstances it would receive the required goods or services at all times. However, the
very simplicity of this statement belies the complexity of source decision making, for in arriving
at the right decision many factors have to be considered.
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