© 2011 Sixhills Consulting LtdHowever, empirical evidence from research suggests that there may be a wide variety of ways to combine partnership and arm’s-length principles in new, innovative buyer-supplier modelsP5IT Commercial Skills Development - Part 2Coherent Combinations Create New ModelsAdversarialCompetition in collaborative frameworkOther innovative combinationDurable arm’s-length relationships (Dyer et al)Performance-based partnershipCooperationExamplesDurable arm’s-length relationships• Smaller number of suppliers• Capability benchmarking• Price benchmarking (rather than competition)• Some limited dedicated investmentCompetition in collaborative framework• Regular price negotiations• Open book on bids (suppliers can compare pricing)• Comparative rating of suppliers (shared)Performance-based partnerships• Limited number of preferred suppliers• Clear performance expectations• Accurate measurement• Assurance of long-term relationshipsWhat is the suitable model for our partners?Source: Mair (Birkbeck)Arm’s-length‘Partnership’
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