Strategies that lower WTS also pay off in improved supplier relationships. Even prior to the COVID-19 pandemic and the increasingly frequent disruptions of global supply chains as a result of climate change, experts readily recognized the value of close and adaptable collaborations with suppliers.
If you find ways to reduce a supplier’s cost of working with your company, you can capture a part of the value that you helped create. However, what is straightforward in theory is often difficult in practice.
Many buyer-supplier relationships do not live up to their potential, not because it is challenging to see how one might create value, but because we fear the other party will capture most of the benefits from a successful collaboration.