Where do buyers and their suppliers see the potential for creating added value together? Is the price the main factor in their cooperation and supersedes any other aspects? The report’s findings illustrate the approaches of the two transactional sides towards creating shared value and the differences between them.
The price remains most important
The main area where buyers and suppliers see the potential for creating added value in closer cooperation is cost reduction understood as optimisation of the supplier’s processes. From the buyer’s perspective, improved efficiency of the supplier’s processes means lower purchase costs of service or product in the future. For the supplier, the value lies in the new source of know-how about the possibilities of processes’ optimisation.
The emphasis on costs as the main area for collaboration has a negative impact on the idea of a long-term partnership, because it means that the most important criterion is the price, and not the concept of mutual relations and non-price benefits. The aim of collaboration is not to plan production or sales together, or to share knowledge, so it is difficult to see the foundation for durability of mutual relations.
Are suppliers more interested in creating value?
Interestingly, the results show that suppliers more often ranked on higher positions the criteria that pointed to the need for building long-term relations or for activities that drive innovation. . This is probably because, from the supplier’s perspective, joint activities with a client (e.g. relating to innovation) are investment that may result in further orders in the future. However, for buyers, such a solution does not bring obvious benefits, particularly, in the case of companies that are able to conduct developmental studies on their own. The role of suppliers in the area of innovation is taken into account only in the last stages of implementation, and is usually limited to providing opinions, and no active participation is expected.
Creating value requires trust
On the last position, both buyers and suppliers ranked the production planning. This is probably due to the fact that production planning is possible only with a certain level of trust and long-term collaboration between business partners as it often involves a disclosure of company’s development plans to the contractor.