Supply chain outsourcing is tightly connected with the concept of a partnership not just another vendor relationship. It involves two companies striving for the same goal in mind - higher business performance. In this case study Hewlett Packard (hereinafter HP) needed to find a supplier that had the logistical capabilities that would provide a varied range of transportation alternatives to deal with a hi-tech company and the short-life cycle that comes with it as well as always changing international complexities . HP found the desired capabilities in United Parcel Service (hereinafter UPS) to create a partnership.
While HP and UPS may strive for a similar goal in mind - higher business performance their business strategies are slightly different. HP is looking to offer hi-tech products at a low cost and deliver the best possible customer service. While UPS offers a vast array of services and solutions leveraged by customers to create and sustain a competitive edge.
The partnership of these two companies strategically makes sense and they mesh well together. On one hand you have the customer (HP) who needs to get their products to their customers quickly and efficiently but supply chain is not one of their core capabilities so the solution was to outsource. Well who better to outsource than to a company whose business strategy to help their customers create a competitive edge. However a partnership at this level can be risky and takes a lot of trust, which will be discussed later on.