What process should be contracted to a supplier with a high level of trust?

Study for the CIPS Introducing Procurement and Supply (L2M1) Test. Engage with flashcards and multiple choice questions, each question includes hints and explanations. Ace your exam with confidence!

Establishing a strategic alliance with a supplier who has a high level of trust is an effective way to foster collaboration and capitalize on mutual strengths. In a strategic alliance, both parties agree to work closely together to achieve common goals, which can lead to increased innovation, shared resources, and enhanced market positioning.

When trust is high, organizations can share sensitive information and rely on each other’s capabilities, leading to better decision-making and flexibility in adapting to changes. This is particularly beneficial in complex or changing markets where a close partnership can create value that is not achievable alone. In such an arrangement, both parties are largely invested in each other's success, promoting a collaborative culture that encourages long-term commitment and stability.

Alternatives to a strategic alliance, such as outsourcing, retaining, or eliminating processes, do not typically leverage the same level of trust and mutual benefit. Outsourcing often suggests a more transactional relationship, where control and communication may be less collaborative. Retaining processes implies keeping everything in-house without the advantage of shared resources that come with a trusted partnership. Eliminating processes suggests a complete removal, which does not foster collaboration or trust. Thus, engaging in a strategic alliance is the most appropriate choice in this context.

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