Achieving Supply Chain Integration: Connecting the Supply Chain Inside and Out for Competitive Advantage

9. Supplier Integration via Vested Relationships

By Kate Vitasek¹

Today most experts agree that typical organizations spend between 40 and 80 percent of revenue with suppliers that help them develop, manufacture, sell, and service their goods/services. For example, the automobile industry spends 70 percent of its revenue with suppliers.² And if you are like most, this means roughly half of your procurement spend is on services that require a more sophisticated approach to sourcing.

For the most part, procurement professionals use transaction-based approaches as the foundation for buying goods and services. However, the nature of business is shifting. First, the C-suite executives around the world took the advice of legendary management guru Peter ...