Hi Jamiew
I think it is important to truly understand the commodities you are considering for strategic alliance contracts.

If the commodity is low risk to your company, and there is no or very little supply constraints, such contracts can offer quick win savings. If needed, you can revert to another supplier with no or little disruption.

If, on the other hand you are talking about strategic commodities and suppliers, especially in a market with supply constraints, it is possibly not the best idea to deal with a demand aggregator.

However, you may be in a position to be a demand aggregator, and thereby strengthen your position in the market.

I believe procurement should look for opportunities across functions and the extended supply chain. If you do not drive improvement and change, someone else will, and they will have the power in the relationship.

I look forward to comments from the community.

Regards

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David van der Walt

Hi Guys,
I have made the experience that vertical relationships have two sides. There are companies that provide amazing software applications that would help the buyer to research their online catalog to find products you currently buy but cheaper. Their relationship with suppliers is important, though. What you said about benchmarking sounds familiar to me. I am involved with a company that does that but you dont surrender your contract, in fact you can integrate yours or negotiate a better deal with your supplier if you want to be on-contract.

Hi,

I would be carefull with this - establishing a startegic alliance should only be done on basis of best value (not price).

Thus, incorporating total solutions as opposed to contract pricing. Furthermore, these strategic alliances could be worth their weight in gold if the scope and framework is clearly defined and set.

You should make a clear cut choice - ALL or nothing. A lot of the strategic alliances fail to take off due to "cherry picking" on commodities.

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Jacques Fourie
Director Operations
Wanama Solutions
+27836450618
www.wanama.co.za
jacques.fourie@wanama.co.za