In order to compete effectively in the world market, a company must have a network of competent suppliers. A supplier development program is designed to create and maintain such a network—and to improve various supplier capabilities that are necessary for the buying organization to meet its increasing competitive challenges. This article details a conceptual model that describes the organizational decision process associated with a supplier development program. The proposed decision model can serve as a guideline for designing a supplier development program that can link purchasing strategy with a firm's overall corporate competitive strategy. Empirical evidence drawn from the experience of several companies actively involved with such a program is used to validate the model.
To compete effectively in the global marketplace, a company must have a network of competent suppliers. A supplier development program is designed to create and maintain such a network—and to improve various supplier capabilities that are necessary for the buying organization to meet its increasing competitive challenges.
This article discusses the results of a survey dealing with supplier development activity. The survey was undertaken to determine the current level of involvement in supplier development programs and to assess the success of the current programs. The results indicate that supplier development programs are more prevalent than expected and that large companies are more likely to be involved. The results also show the importance of formal supplier evaluation to the supplier development process.
To compete effectively in the global marketplace, a firm must have a competent and strategically integrated purchasing organization. It is important that all functional area strategies and capabilities, including purchasing, be consistent with corporate competitive strategy. It is also critical that a company's suppliers have the capability to meet its strategic priorities. This article develops a conceptual framework to aid in linking purchasing to corporate competitive strategy and to other functional area strategies as well. The proposed model can be used to begin to integrate purchasing into overall corporate strategy.
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