The threat to core competence posed by developing closer supply chain relationships

Parry, Glenn; James-Moore, Mike; Graves, Andrew

Abstract

Supply bases have been rationalised and now fewer “preferred” suppliers are in direct contact with customers, who demand more personal attention and greater responsiveness from them. In developing closer supplier relationships, the exchange of proprietary information becomes more likely and also the potential loss of core competences. This paper assesses the applicability to UK aerospace companies of supplier models by Cox and Kraljic that link relationship types to core competence. During the research a method of procurement was uncovered in which the customer placed a team of engineers to work with competing suppliers to develop their bids. In doing so, the customer absorbed technical knowledge from the supplier. The customer's objective was to obtain acceptable technical offers from both suppliers. This method delivered best value to the customer, but may be in breach of competition law.

• Journal Article Type: Article
• Publication Date: Sep 3, 2006
• Journal: International Journal of Logistics Research and Applications
• Print ISSN: 1367-5567
• Electronic ISSN: 1469-848X
• Publisher: Taylor & Francis (Routledge)
• Peer Reviewed: Peer Reviewed
• Volume: 9
• Issue: 3
• Pages: 295-305
• DOI: https://doi.org/10.1080/13675560600859524
• Keywords: supplier relationship, core competence, procurement, cost
• Public URL: https://uwe-repository.worktribe.com/output/1044993
• Publisher URL: http://dx.doi.org/10.1080/13675560600859524