Difference between revisions of "Adversarial Purchasing"
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'''Adversarial Purchasing''' is traditional purchasing philosophy where an organization utilizes several vendors for each product. It is a strategic management tool to increase competition in order to lower prices while increasing the level of service and attention paid to the organization by its suppliers. | '''Adversarial Purchasing''' is traditional purchasing philosophy where an organization utilizes several vendors for each product. It is a strategic management tool to increase competition in order to lower prices while increasing the level of service and attention paid to the organization by its suppliers. | ||
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| + | Adversarial Purchasing is usually considered to be inferior to some form of partnership sourcing. In the procurement literature partnership sourcing is said to have the following advantages over competitive supply(Lamming and Cox, 1995): | ||
| + | *Avoiding unnecessary costs of excessive tendering and frequent competitions | ||
| + | *Fewer, dedicated suppliers | ||
| + | *Long-term contracts | ||
| + | *Coordinated strategies between buyers and suppliers. | ||
| + | *A sharing of risks and rewards | ||
| + | *Trust relationships | ||
| + | *Single sourcing | ||
| + | *Resulting mutual benefit ('win-win' outcomes). | ||
| + | In comparison, adversarial or competitive sourcing is held to have the following disadvantages | ||
| + | *Arm's length relationships• Frequent tendering which is risky and costly | ||
| + | *Reliance on price• Spot contracts or complex contingent claim contracting | ||
| + | *Multi-sourcing | ||
| + | *Lack of trust | ||
| + | *Reluctance to share information | ||
| + | *Adversarial attitudes ('win-lose' outcomes) | ||
| + | Partnership sourcing and adversarial are often discussed in terms of discrete categories so that the advantages and disadvantages of each method are clearly delineated. However, even casual observation of actual supply relationships reveals that there are different forms of partnership sourcing (e.g. from strong to weak forms) and different forms of competition (e.g. very short-term contracting to longer-term competitive contracting) | ||
Revision as of 19:45, 15 February 2022
Adversarial Purchasing is traditional purchasing philosophy where an organization utilizes several vendors for each product. It is a strategic management tool to increase competition in order to lower prices while increasing the level of service and attention paid to the organization by its suppliers.
Adversarial Purchasing is usually considered to be inferior to some form of partnership sourcing. In the procurement literature partnership sourcing is said to have the following advantages over competitive supply(Lamming and Cox, 1995):
- Avoiding unnecessary costs of excessive tendering and frequent competitions
- Fewer, dedicated suppliers
- Long-term contracts
- Coordinated strategies between buyers and suppliers.
- A sharing of risks and rewards
- Trust relationships
- Single sourcing
- Resulting mutual benefit ('win-win' outcomes).
In comparison, adversarial or competitive sourcing is held to have the following disadvantages
- Arm's length relationships• Frequent tendering which is risky and costly
- Reliance on price• Spot contracts or complex contingent claim contracting
- Multi-sourcing
- Lack of trust
- Reluctance to share information
- Adversarial attitudes ('win-lose' outcomes)
Partnership sourcing and adversarial are often discussed in terms of discrete categories so that the advantages and disadvantages of each method are clearly delineated. However, even casual observation of actual supply relationships reveals that there are different forms of partnership sourcing (e.g. from strong to weak forms) and different forms of competition (e.g. very short-term contracting to longer-term competitive contracting)