Organizations need suppliers in order to operate efficiently and efficiently. Organizations cannot be successful without the support of the suppliers whether short- term or long- term. Businesses are building collaborative relationships with their suppliers to ensure that efficiencies, flexibility and competitive advantage are achieved. [Corsten and Kumar, 2005] Collaborative relationships tend to adopt long- term approaches with combined efforts form both buyers and suppliers in order to create unique value that either buyers or suppliers can create independently.
Most organizations seek long- term relationships with their respected suppliers in order to secure valued resources and technologies, link supplier skills and strengths and to gain from quality. [Kalwani and Narayandas, 1995] Businesses struggle to achieve the desired level of collaboration and the expected benefit of buyer- supplier relationships, this is due to the critical details often being overlooked, such as selecting the right suppliers, matching inter- organizational needs and capabilities and clearly defining standards and goals. [Daugherty et al, 2006]
Questions arise about whether buyers and suppliers benefit from collaborations. A study of collaborative relationships found that even though both the buyers and suppliers benefited from the collaboration but there was a feeling of inequality in the collaboration on the suppliers’ part. It is crucial for this issue to be addressed in order to achieve future success. [Terpend et al, 2008]
The South African automotive industry
“The South Africa’s automotive industry is a global, turbo- charged engine for the manufacture and export of vehicles and components.” [Van der Merwe, 2009] In the past years South Africa has been able to develop a major automotive industry with local vehicle manufacturing plans for companies such as Volkswagen, BMW,