The discussion of partnership makes me uneasy. I agree there are times when establishing a stronger relationship with a supplier is beneficial. But too often I see suppliers pushing partnership as a way to lock up business. After all, if we are "partners" you should not be testing the market price or looking for a new source of supply. "Partnership" is the suppliers antidote to buyers flexing their muscles.

With cautions understood we can proceed to discuss when partnerships are appropriate. My test is if a suppliers failure of success can affect my stock price, I need a partnership with them! Partnerships should be progression. I like to use the dating, going steady, and getting married analogy. In the dating stage demand forecasts are shared, improvement opportunities are routinely discussed, and performance feedback is frequent and two way. Going steady is longer term and often involves sharing not only tactical information (e.g. production schedules) but also strategic direction (e.g. new products). Information systems are often links to facilitate sharing. Partnerships where a "wedding" has taken place are not time specific, involve employee changes and joint strategy development.

When partnerships work they are very powerful. Most fail because management changes, priorities change or the business environment evolves. Remember: The best partnership agreements detail how the partnership will end … just in case!