By M Briers
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Extra info for Controls in Strategic Supplier Relationships
Example text
What the supplier would do is they would come out with all potential bearings that would be in that particular mill, depending on what our engineers had specified. They wouldn't charge us for those bearings unless we used them. So at the FIRM A: ALUMINIUM PRODUCTS 19 end of the maintenance program they would come back and they would say, `Okay, 25 bearings were delivered. You only needed to use 10. ' With those sorts of programs we were then able to drive our own costs down. Firm A was also able to eliminate the activities and costs relating to storage of inventory through the development of an SSR with its inventory supplier.
Three sources of trust were identified. The first, process-based trust, relates to norms of reciprocity promoted by repeated interactions between exchange participants. By relying on ascribed background characteristics such as experience and technical competence, the second source, character-based trust, provides a basis for predictions of how exchange participants will behave in specific situations. Here the critical nature of the initial supplier selection process in assessing character-based trust was highlighted.
The authority to FIRM B: STEEL SUPPLIER 31 request performance information from the supplier, ensure that the performance of the supplier is reviewed regularly, and take any actions deemed necessary in the management of the supplier is similarly vested in a contract owner. The vesting of detailed supplier management authorities in specific organisational positions reinforces the authority control in Firm B's SSRs. Socialisation mechanisms Similar to Firm A, socialisation mechanisms are also used by Firm B in an attempt to control suppliers.