Collaborative Advantage
Working in partnership with strategic suppliers.
Author(s): Jeffrey H. Dyer
Publisher: Oxford University Press
Date of publication: 2000
Manageris opinion
Toyota's remarkable performance is largely attributable to the automaker's production system. Rather than manufacturing its own parts, or buying them from the cheapest supplier, Toyota works in close collaboration with a network of longstanding suppliers. Likewise, Chrysler's spectacular turnaround in the early nineties is directly linked to the adoption of this model.
From these two examples, ""Collaborative Advantage"" draws lessons that can be applied by companies in any industry:
- Companies derive many advantages by working in close collaboration with their suppliers, such as greater control over costs and shorter development cycle time.
- This organizational model is well suited to complex products, because efficient coordination is particularly critical as components become more interdependent.
- Three success factors are key to the success of the extended company, i.e. build trust, organize the transfer of knowledge and
experience, and convince suppliers to invest in assets dedicated to the partnership.
