As the markets continue to grow so as supply chain, Retailers and manufacturers are today increasing their operation beyond the national borders and through this, improving responsiveness on customer demands and on rapid change on economic conditions has become vital when engaging to globalization.
Therefore to meet this requirement companies are working on establishing partnership and collaboration with foreign firms, suppliers to accommodate expansion of supply chain.Definition of Collaboration and Supply chain partnership Firstly according to Malone et al (2010) collaboration means that companies are involved on working together to meet one mutual objective while supply chain partnership means the relationship that is made between two independent entities in supply chain channels to achieve specific objectives and benefits.In most cases this partnership is formed having in mind the objectives of improving on financial and performance issues to both parties involved through ensuring that total costs of the firm are reduced, there Is Increased Information sharing rather than being only concerned about the price. So expanding supply chain globally forces companies to or suppliers who will work with them on improving customer service, bring new technological advancement and new design.Establishment of partnership and collaboration in supply chain will ensure that the end user customer obtain high quality, (Lee et a’, 2009) further elaborated that supply chain partnership will generate wealth and strong controlћ barriers which most often exist between the supplier and the buyer will be reduced because as the supply chain expand globally quality standard are very high and establishing partnership will mean considering to have few reliable suppliers who provide optimum quality.
Macbeth et al (2010) notes that recognizing strategic buyer and supplier partnership in expanded supply chain is a necessary driver for successful global outsourcing however Trend and Monika (2000) suggested that throughout globalization, forming partnership with foreign firm but within the organization It Important that supplier is involved In cross functional sourcing teams to improve on supply chain effectiveness.While some companies have required vertical integration on their acquisition to harness supplier expertise (Dwyer 2009; Macbeth and Ferguson, 2010) argued that formation of partnership can also yield similar benefits without the need for ownership, supplier-buyer partnership will provide increased communication in foreign operation thereby minimize the risk from externalities. Engaging on supplier collaboration and partnership will promote supply chain integration which will In turn provide Increased revenue, market share, create strong competitive advantage and also increase company value (Lee et al, 2010).For instance, Dell Computers serve as an example throughout how collaboration and partnership have enhance their competitiveness in the industry as a whole.
For Dell Computers competition is not created through only focusing on technology as most manufacturers in the industry use the same technology but Dell success has been centered by considering costs suppliers, involving their suppliers on planning and on forecasting.And this for Dell computers have provided the delivery of Just In Time principle (Gators et al, 2010). According to Carter et al (2000) supply chain expansion will require companies to continue focusing on finding core competencies and further ensuring that they obtain access to new products and technology, In addition the author further notes in true companies will continue perform outsourcing manufacturing, operational services, logistics from time to time.Therefore this means that success of companies will lie on having the ability to clearly create external resources and competency needs and exchanges technical expertise that will benefit both partners. As companies get involve in foreign outsourcing, in order to be competitive it will require companies not to act independent in the supply chain but forming strategic alliance will be fundamental in maintaining competitive advantage.