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156 CHAPTER 5 • PuRCHAsing And suPPly sTRATEgy

Figure 5.2 supply networks are the interconnections of relationships between
operations

Upstream Focal Downstream
level

Second-tier First-tier First-tier Second-tier
suppliers suppliers customers customers

Company A

Company B

X
Company C X

X X X
X
Supply side of Demand side of
the network the network
For Company A
Internal supply network Flow of products/services
Flow of information
Immediate supply network
Total supply network

parallel relationships there are several supply chains. These are the sequential link-
ages of operations that intersect at the focal company. So, for example, the operations
marked with an X form one of the supply chains passing through company C.

describing supply networks – dyads and triads
Figure 5.2, and all diagrams that try to describe supply networks, can be complex. There
are many operations, all interacting in different ways, to produce end products and
services. Because of this, and to understand them better, supply network academics and
professionals often choose to focus on the individual interaction between two specific
operations in the network. This is called a ‘dyadic’ (simply meaning ‘two’) interaction,
or dyadic relationship, and the two operations are referred to as a ‘dyad’. So, if one
wanted to examine the interactions that a focal operation had with one of its suppliers

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