What Are the Best Tips for Forming a Business Partnership?

Supply chain partnership (SCP) generally refers to a coordination relationship formed between two or more independent members within the supply chain to ensure the achievement of a specific goal or benefit. The purpose of establishing a supply chain partnership is to improve the level of information sharing, reduce the total inventory of products throughout the supply chain, reduce costs, and improve the performance of the entire supply chain.

Supply chain partnership

Introduction

As market demand uncertainty increases, all parties to the cooperation must minimize the impact and risk of demand uncertainty.

set up

The steps to establish a supply chain partnership can be divided into the following areas.

Demand Analysis for Establishing Strategic Cooperation in Supply Chain

Determine criteria, choose suppliers, choose partners

Formal partnership

Implement and strengthen strategic partnerships

set up

Constraints in establishing supply chain partnerships

High-level attitude

Good

Six development trends in supply chain partnerships

The Internet and e-commerce will make a significant change in the relationship between suppliers and customers. Their relationship will no longer be limited to the sales of products, but will instead serve to sell products to customers in a service-oriented manner. More and more customers not only fulfill their needs by purchasing products, but also pay more attention to the planning and implementation of future applications, system operation and maintenance, etc. In essence, they need a certain utility or capability rather than a product In itself, this will dramatically change the relationship between suppliers and customers.

global

Chinese industrial enterprises born out of the planned economy, in the process of transition from the planned economy to the market economy, for a considerable period of time, the enterprise mechanism and management ideas have lagged behind the requirements of the development of the market economy.

Lack of motivation and motivation to take the initiative to attack the market

The actual survey results show that the use of external resources of enterprises is low, and the cooperation between enterprises and suppliers has not yet formed strategic alliances and other relationships with strategic alliances. Under the traditional planned economic system, the mountain-headed ideology of me is still present in many enterprises. There are only a few global supply chains at regional and transnational borders.

cooperation method

Although many state-owned enterprises have a certain degree of market competitiveness, in terms of cooperation with other enterprises, they are still accustomed to acting in accordance with the planned economic model, have not carried out scientific consultation and decision-making and research on cooperation countermeasures, and lack scientific awareness of market competition.

Due to the special principal-agent model of state-owned enterprises

The incentive cost of principal-agent (IncentiveCost) is far greater than the incentive cost of free competition in the market, and the defeat in the agency problem is quite serious.

Dual identity, dual role

The typical characteristics of a state-owned enterprise's principal are the dual identity and dual role of the principal (both the principal and the agent). The agency problem is more complicated than other types of conventional agency problems.

Short- and medium-term behaviors in corporate partnerships are also common

Due to the special nature of the agency problem, short-term behaviors are common in state-owned enterprises. The negotiation process of enterprises has strong non-economic factors and personal preferences.

Ratchet effect

Due to the existence of the Ratchet Effect under the planned economy system, the enthusiasm and initiative of enterprises in cooperative competition are not high. In addition, the structure allocation mechanism of China's market resources does not conform to the standardized Pareto allocation model. Low efficiency, high transaction costs, and the loss of state-owned assets due to information asymmetry in the process of principal-agent implementation are very difficult.

Supply chain model

The Internet / Intranet-based supply chain model is the future development direction of supply chain enterprise cooperation methods and principal-agent implementation. However, many Chinese enterprises have not made full use of advanced information communication methods such as EDI / Internet, and the information transmission tools between enterprises are backward. In the process of using Internet / Intranet for business activities, there is a lack of scientific cooperation countermeasures and entrusted implementation mechanisms, an incomplete legal system and an imperfect credit system. In 1998, China's first e-commerce fraud case occurred when a company in Hainan and a company in Hong Kong conducted online e-commerce, which fully illustrates the importance of Chinese companies' research on cooperation countermeasures and commission implementation mechanisms in global supply chain activities.

Because of these problems, the application of supply chain management thinking in Chinese enterprises is much more resistant than expected, and the deepening of corporate reforms urgently needs to change the existing enterprise operating mechanisms and management models. Therefore, improving the supply chain management thinking and operation methods, and solving the corporate cooperation countermeasures and principal-agent implementation mechanisms that Chinese enterprises urgently need to solve during the implementation of supply chain management are the keys to whether the supply chain management model can be well implemented in China. . ^[1]