Success factors in strategic supplier alliances: The buying company perspective

The emerging area of supply chain alliances has received considerable attention in the academic and managerial press, yet there are many unanswered questions regarding the dynamics of such relationships. A number of such fundamental issues drive this research initiative, including how alliances are developed, their key success factors, and the specific benefits to be achieved. The study begins by establishing a definition of strategic supplier alliances, based on a comparison of both theoretical and managerial descriptions. The critical antecedents associated with the success of strategic supplier alliances are next developed, and the magnitude of the effect of these factors on partnership success is assessed. The analysis employs both qualitative and quantitative data, collected through an electronic network of over 200 companies, as part of an ongoing benchmarking initiative in supply chain management. From the perspective of the buying company in the alliance, the following attributes of supplier alliances were found to be significantly related to partnership success: trust and coordination, interdependence, information quality and participation, information sharing, joint problem solving, avoiding the use of severe conflict resolution tactics, and the existence of a formal supplier/commodity alliance selection process. Resource commitment and smoothing over problems were found to be poor predictors of alliance success. The implications of these results for managerial decision making in supplier alliance development are discussed.