Openness! Key to Successful Buyer–Supplier Relationships? A Case of AB Packaging and Star Appliances

AB Packaging was manufacturing expanded polystyrene (EPS)-based packaging materials in Pakistan. Star Appliances, a local subsidiary of Proxima group of Turkey and a manufacturer of home and kitchen appliances, recently decided to gradually outsource its packaging material manufacturing and focus more on its core capability, that is, appliance manufacturing. Following due search and evaluation procedures, Star Appliances outsourced one-third of their packaging material demand to AB Packaging. Winning this business was a major achievement for AB Packaging. However, after signing the contract and as soon as the business gained momentum, procurement-related challenges started appearing at the end of AB Packaging. This soon led to the newly formed business relationship being put in jeopardy. Decisionmakers at AB Packaging must find a way out of the dilemma to save the relationship. However, this requires rethinking and realignment of strategic interests and operational procedures governing the buyer–supplier relationship.