Dictionary of Procurement Terms

There are three principal relationships between buyers and suppliers: 1. Transactional: An arm’s-length relationship, wherein neither party is concerned with the well-being of the other. Price is the focus of the relationship. 2. Collaborative: A strategic relationship that results in the reduction of risk and uncertainty. This type of relationship creates interdependency and cooperation. 3. Alliance: A relationship that is based on institutional trust. Alliance partners share a vision of the future in which ethics take precedence over expediency.