A Study of Relationship between Customer and Supplier in Cutlery Outsourcing

Abstract

The importance of having a ‘win-win’ relationship between customer and supplier has many significant benefits to both parties and this point is increasingly emphasized by commentators within the context of outsourcing activities. Arguably, for many organizations outsourcing of non-core activities has a central strategic pillar survival in a fierce and competitive global environment and hence the need to develop effective customer and supplier relationships within outsourcing arrangement has become more crucial. However, establishing and maintaining a successful relationship is not easy. Many outsourcing relationship failures have been observed. This paper aims to examine the dominant relationship factors during the course of customersupplier interactions as well as attempt to identify practical approaches to building up and maintaining successful relationship within the context of outsourcing activities. The nature of relationships between a Chinese cutlery manufacturer and its western customers is explored in the form of four types of relationship models including the ‘middleman’ model which was found to be effective in establishing and maintaining the good customer and supplier relationship. Conceivably, this can be seen as a ‘fast track’ model for building zero to a high level relationship performance. Although the middleman might become ‘redundant’ when the relationship between the two trading partners is mature and trustworthy, however its importance in the early stages should not be ignored.