Practitioner Insight

In the increasingly important context of inter-organisational relationships the quality of the connections between inter-dependent companies is becoming as important as the performance of each business. We live in a networked world where the health of the relationship between companies can significantly influence business success. Just like plant, capital and people, business relationships are key assets and our research shows they need to be measured and managed accordingly.

These risk were driven by (a) disruptions due to environment disasters, resulting from climatic change, and (b) reputational risk, stemming from the working practices of suppliers in their chains. It was argued that to ensure a company’s long-term survival, resilience must be built into an organizations supply chain. Lastly, the article concluded that being green and focusing on sustainability is also a more efficient and profitable way of working.

For some participants – especially the multiple retailers – the adoption of lean principles may lead to a positive outcome with stable and/or increasing profitability. For the majority of participants in these industry supply chains, however, the adoption of lean principles may result in a high level of dependency on buyers and to low or declining levels of profitability.