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Article: Procuring a partner. (company partnership sourcing)
- Article from:
- Management Accounting (British)
- Article date:
- June 1, 1995
- Author:
CopyrightCOPYRIGHT 1995 Chartered Institute of Management Accountants (CIMA). This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Let's begin with a statement of the practical benefits of partnership sourcing for the buyer in the manufacturing sector:
* reducing the transaction costs of dealing with many suppliers;
* gaining the full benefit of experience curve effects by concentrating production;
* encouraging the supplier to invest in more expensive, longer-term tooling to gain higher efficiency;
* allowing the supplier to dedicate staff to the partnership (similar to the 'guest engineers' that Japanese companies collect in each other's premises);
* the spreading of development cost and risk among many participants while permitting the purchaser to gain full ...