Executive Briefings

Putting the Strategy in Strategic Alliances

Ocean Spray and Nestle have enjoyed a successful long-term partnership that both parties describe as "strategic." June Youngs, director of supply chain for Ocean Spray, says that both parties are guided by "the best commercial effort" in operating the alliance.

"This means that both parties are willing to make decisions different from those they would make if operating alone," Youngs explains. "For example, if we truly want to collaborate on strategic sourcing, we have to keep the interests of both companies in mind. What we need to do as a mutual provider working within an alliance may not always be what would be best if we were working as a sole provider and optimizing just for our business," says Youngs. Decisions often may benefit one partner more than the other, but the differences average out over time, she says. "Net/net, the important thing is to make decisions that are in the best interests of the alliance," she says.

Since the alliance began, Nestle has transitioned some of its manufacturing to Ocean Spray facilities, and the companies have joined to procure common raw materials and packaging supplies as well as to collaborate on the supply chain.

The partners have a steering committee that meets quarterly. "We review scorecards at these meetings and talk about service, manufacturing performance, distribution performance, procurement goals and even our financial goals," says Youngs. "If there are changes in either of the businesses or in the economic environment, we adjust for that, still acting in line with the best commercial effort," she says.

Additionally, top executives of each company meet once a year. With this structure, "we make sure the alliance is meeting its goals and we adjust accordingly, but we also stay focused on the long-term nature of the relationship and and big decisions are made with that in mind," Youngs says.

To view video in its entirety, click here

Ocean Spray and Nestle have enjoyed a successful long-term partnership that both parties describe as "strategic." June Youngs, director of supply chain for Ocean Spray, says that both parties are guided by "the best commercial effort" in operating the alliance.

"This means that both parties are willing to make decisions different from those they would make if operating alone," Youngs explains. "For example, if we truly want to collaborate on strategic sourcing, we have to keep the interests of both companies in mind. What we need to do as a mutual provider working within an alliance may not always be what would be best if we were working as a sole provider and optimizing just for our business," says Youngs. Decisions often may benefit one partner more than the other, but the differences average out over time, she says. "Net/net, the important thing is to make decisions that are in the best interests of the alliance," she says.

Since the alliance began, Nestle has transitioned some of its manufacturing to Ocean Spray facilities, and the companies have joined to procure common raw materials and packaging supplies as well as to collaborate on the supply chain.

The partners have a steering committee that meets quarterly. "We review scorecards at these meetings and talk about service, manufacturing performance, distribution performance, procurement goals and even our financial goals," says Youngs. "If there are changes in either of the businesses or in the economic environment, we adjust for that, still acting in line with the best commercial effort," she says.

Additionally, top executives of each company meet once a year. With this structure, "we make sure the alliance is meeting its goals and we adjust accordingly, but we also stay focused on the long-term nature of the relationship and and big decisions are made with that in mind," Youngs says.

To view video in its entirety, click here