Innovative approaches to formation of supply chain relationships

Supply chain organisations realise that closer, long-term relationships are fundamental to management success and these are in importance in today's dynamic and complex business world. Supply chain researchers (Cooper et al., 1997; Golicic, Foggin and Mentzer, 2003) agree that in many instances, not all inter-firm relationships need to be either co-operative or collaborative and that there is no unique relationship suitable for all circumstances. The existence of numerous relationships within supply chains challenges actors such as freight businesses to think about the need to understand the formation and managment of a portfolio of relationships. The key objective of this study is to explore the impact of trust, power and sharing to the formation of inter-organisational relationships in the Australian road freight transport industry. This study is part of a wider research project and represents the responses from a sample of 120 organisations involved in road freight. Initial findings indicate the importance of trust and power to relationships and the centrality of sharing to operationalise any long-term relationship. This clearly demonstrates to managers the importance of understanding the need to establish trust and balance power in forming a relationship between organisations.