With credit availability non existent or in sharp decline, a more transparent relationship between suppliers and customers is needed to overcome the credit hurdle.
In times when money is short a very open relationship based on partnership will allow a chain of suppliers and customers to fulfill orders in a “joint venture per order” kind of way. This will allow small and medium size business to compete successfully with bigger business and take the order. Everyone in the chain has to agree to get paid when the order is finally fulfilled.
This is however not going to solve the problem of financial difficulty in businesses for historic reasons or based on too high fixed cost. In these times cash-flow is more essential than ever. So outsourcing and reducing fixed cost is paramount at every juncture.
I have been talking about the fact that we live in a time of business partnerships, the traditional supplier – customer relationships do not work anymore. This has never been more true than at the moment.
How are you partner skills, I hope for you, they are good. –ST.