007 - 0392 Formal Contracts in Supply Chain Management : a Case Study

Although adequate management of relationships is often considered a key factor in Supply Chain Management, the use of formal contracts in this context has still been little studied or reported, even in the automotive industry. This article discuss the major findings of a study conducted in a representative supply chain of the auto industry to verify the use of contracts and how they affect the relationships of the companies in question. Based on an intentional sampling approach, a case study was made of an automaker that uses the industrial condominium configuration, two first tier suppliers operating inside the condominium, and a first tier supplier operating outside the condominium (a conventional supplier). Additionally, a basic framework was built to guide and define the key content of the research, which considered two premises and eleven parameters in the companies in question. The results pointed to some key findings, such as the fact that, whereas the formal contract in the conventional arm’s length relation has a “commercial” bias, in the condominium relations it has a “management” bias.