SUPPLIER-CUSTOMER RELATIONSHIPS: A GUIDE FOR ASSESSMENT AND MANAGEMENT

Supplier-customer relationships come in many forms. Traditionally, these forms were governed by the bidding process and the hidden hand of the market. More recently, close business relationships have become fashionable, and the discussion of these has dominated the landscape. However, as those involved in the management of supplier-customer relationships already realize, many varied types of relationships exist and there is no single successful management approach that can be applied. Thus, the aim of this research was to identify the specific forms of relationships that exist between suppliers and customers and to identify the distinguishing attributes that characterize these relationships. This information will give relationship managers a framework by which to classify the relationships they manage and present them with a set of controllable variables that can be used to execute successful management approaches. To execute the research, a large set of relationship managers provided their interpretations of their best, average, and worst relationships with customers or suppliers. Using appropriate statistical techniques, the relationships were classified into seven distinct groups: nonstrategic transactions, administered relationship, contractual relationship, specialty contract relationship, partnership, joint venture, and strategic alliance. Definitions and descriptions were developed for each group and are presented in this report. The results of this research support the idea that firms must develop negotiations and relationship management strategies for each of the seven types of relationships to ensure that each type of relationship is properly managed considering differences in the levels of trust, interaction frequency, and commitment.