8.3 Supply chain partnership models
In supply chain, the role of partnering is mainly to complement the strength of the firm, or as Ayer has put it, to cover holes in the supply chain. There are many examples of partnerships encompassing different activities and with different degrees of involvement. The following are examples of partnership models in supply chain management related activities. This is, however, not an exhaustive list.
- manufacturer and supplier
- manufacturer and 3PL service providers.
- manufacturer and distributor
- suppliers and retailers
These models are basically what are known as vertically oriented supply chain models. The other kind of partnership is the horizontal partnership in which partners do have overlapping capabilities. Ayers(2001) cites the example of the combination of two telecommunication companies, one focused on wireless and one on long distance. A number of factors may aid in forming such partnerships, including wider market coverage and better capacity utilisation. Liner shipping companies or airlines achieving greater economies of scale, connectivity and load factor by slot sharing or code sharing are prime examples of this kind of horizontal partnership in the transportation and logistics sector.

Figure 8.1 Partnership direction and models (Source: Ayers 2001)
We will look at some of the emerging partnership models in supply chain management.