Value Co-Creation in Industrial Buyer-Seller Partnerships ... - Doria

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” We are in the process of developing the system where instead of just blindly changingparts, we measure and test whether there is a need to change it without taking it outand change it when there is an actual need to do it. A more intelligent system, but itrequires some development when there are 20 ships involved, in this case it has to bedeveloped systematically so that it works. There is potential in this. Some people mighthave a different opinion, but in the case of this size of firm there certainly is potentialin this” . (Interview: Buyer 1)Risk sharingA motivation for the Buyer to work with partners whom they trust is the risk sharing ispossible. Mr BR9 repeated several times that he personally is comfortable when he knowsthat someone is sharing responsibility with him, that he has responsibility of the safety of60,000 passengers each day, and still has to be able to sleep well at night. In the case of anemergency he needs to know that the Seller is there to support him.Openness in communicationPartly connected to both cost avoidance and overall operational efficiency is the openness incommunication that the Buyer asks for, and perceive to get through a partnership. As a partof the cooperation agreement they want to get access to critical technical information aboutdifficulties and damage that the Seller has experienced on other ships anywhere in theworld, in order to be pro-active and avoid damage on their own fleet.” Such a thing like when there is a problem occurring in some other part of the worldwith engines that we have. Something that one is not certain about, and don’t quiteknow what the problem is, but we would very much like to have that information evenwhen it is not solid. An informal email from the Seller to us where they say: ” hey thisis what we have seen on this or that power plant” . Wherever in the world it is. We donot know what it is, but this is for your information.” (Interview: Buyer 7)Operational efficiencyThe diesel engines, which are the main object of the exchange between the Buyer and theSeller, are the power source for an entire cruise ship, and therefore the operating of theengines is one of the biggest costs for a cruise ship operator. Evidently the main benefit thatthe Buyer expects to get out of the relationship with the Seller is related to operational141
efficiency. Efficiency is related to a number of activities, namely condition-basedmaintenance and optimization of component lifetime, fleet-wide standardization ofprocedures, improved fuel economies and optimizing procurement, and logistics.Regarding changing of components, the Buyer wants to optimize component lifetimeand create a system through which they would not change components according toprescribed specifications by the supplier according to running hours, but instead switch to asystem where they would assess the need for changing a certain part and only change itwhen there is an actual need. In order to do this they need the specific know-how possessedby the Seller to be able to determine the critical balance between level of deterioration andreliability of the component. The condition-based maintenance program is an effort in thisdirection.” We are in the process of developing the system where instead of just blindly changingparts, we measure and test whether there is a need to change it. We do it withouttaking the part out and change it only when there is an actual need for it. A moreintelligent system, but it requires some development when there are 20 ships involved,in this case it has to be developed systematically and so that it works. There ispotential in this. Some people might have a different opinion, but in the case of thissize of firm there certainly is potential in this” . (Interview: Buyer 1)Cost avoidance is believed to be a factor affecting operational efficiency. It is believed thatby working for the long term with a trusted partner unnecessary costs can be avoided.“ And one of the things I’ve talked a lot to my boss about and he’s supportive of it, andis something that I am trying to do across our team, is, even though, ultimately, as acompany, you know, I have to add value to the company, how much money did I makethe company today? Ultimately, that’s the question, but much of my job, whether it’ sworking with the Seller or anybody else, is cost avoidance. And again, that’s hard toqualify because I didn’t bring you a dollar or savings but I just did something thatprevented the cause… something that prevented the cause, or the ship not to get a partthat was critical to their operation. And so to me, we need to capture that positivething. And we do a lot of cost avoidance.” (Interview: Buyer 14)One of the most obvious benefits in the area of operational efficiency that can be gainedfrom a partnership with a supplier is to find more efficient ways of taking care of logistics.The dealing with spare parts is the biggest day-to-day activity between the companies andthe Buyer considers that a benefit of the partnership is that there are efficiencies to begained for both parties concerning more efficient handling of spare parts.142” It is clear that if we can avoid having a certain spare part on board the ship we cansave a lot of money. We have some millions of dollars in spares on board the ships,
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Birgitta ForsströmValue Co-Creatio
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VALUE CO-CREATION IN INDUSTRIAL BUY
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CIP Cataloguing in PublicationForss
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Suokannas and Annica Isacsson my de
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3.3 The use of the value concept in
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7.2.1 Price as a benefit and a sacr
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Figure 8.1: Interdependence, involv
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81. INTRODUCTIONEconomic theory rel
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Portfolio management and key accoun
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value - ways to understand and thin
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creation in a world of relationship
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Möller and Halinen-Kaila (1999) cr
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Value of a Relationship: When discu
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1.3 Outline of the studyThe study s
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in such relationships, and on how t
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2.2 Research approach“ Human gras
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“ In case study both the research
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interview ended up being different
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simplifying and combining observati
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the purpose of why it is studied an
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started paying attention to issues
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The analysis of the material was an
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are: setting the boundaries of the
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Critical events during the process
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interviewing, observing, reading, r
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unit. Going even further back in hi
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3.4.1 Overview of the use of the va
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est way to organize, any way of org
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4.2 The IMP view on relationships a
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ecent book discuss how creating val
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not simply mutual dependence betwee
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interdependence is associated with
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“ The performance of supplier arr
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Figure 4.5: Different value creatin
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“ organizational arrangements tha
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There is no simple or universal def
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The question of win-win in partners
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The following chapter, number five,
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The world cruise industry is domina
Page 98 and 99: Figure 5.2: The actors and the setu
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Page 102 and 103: :: ]:: ]In normal cases the Seller
Page 104 and 105: the top 10 suppliers for the cruise
Page 106 and 107: 6. THE DEVELOPMENT OF THE RELATIONS
Page 108 and 109: In 1997 when Mr BR9 got the positio
Page 110 and 111: The relationship between the compan
Page 112 and 113: ” He (BR9) often talks about the
Page 114 and 115: With some years of experience with
Page 116 and 117: offering, the Buyer still sees the
Page 118 and 119: When the Seller realized that they
Page 120 and 121: we have a new development in the pr
Page 122 and 123: to serving the customers - the part
Page 124 and 125: ” This is the most problematic ag
Page 126 and 127: • Optimize operations i.e. fuel o
Page 128 and 129: They also commented that the person
Page 130 and 131: 6.7.5 Comments on internal issuesAt
Page 132 and 133: changes, and that the Seller would
Page 134 and 135: survey 14 that the Seller had condu
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Page 138 and 139: Seller. At present there are three
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Page 146 and 147: 7.1 Perceived value as a prerequisi
Page 150 and 151: and that is insane. We must be able
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Page 154 and 155: We learn their way of handling thin
Page 156 and 157: Price receivedThe price received ca
Page 158 and 159: partnership with the Seller, the as
Page 160 and 161: In the light of this, one could say
Page 162 and 163: dependence. If managers were not ab
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Page 166 and 167: Seller’ s products and concepts,
Page 168 and 169: forth between the companies. This h
Page 170 and 171: What I found even more interesting
Page 172 and 173: The Buyer sees that the interest fo
Page 174 and 175: decision to pursue a collaborative
Page 176 and 177: methodology. I will also direct som
Page 178 and 179: years to come. Consequently the par
Page 180 and 181: €‚ƒ‡ ˆ„~„| }~different
Page 182 and 183: Question 1: How is the value concep
Page 184 and 185: exists, the value co-creation poten
Page 186 and 187: partnering and cooperating are so o
Page 188 and 189: process of analyzing the material s
Page 190 and 191: Barney, JB. (1991). Firms resources
Page 192 and 193: Forsström, B., (1998). Trouble & S
Page 194 and 195: Katz, M & Shapiro, C (1985). Networ
Page 196 and 197: Shapiro, B.P., Rangan V.K., Moriart
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Interviews:Interview: Buyer 1Interv
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Relationships between buyers and se
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