To deal with increasingly competitive challenges, today’s companies consider supplier performance as a crucial factor to their competitive advantage. Supplier development is one of the recent approaches to supplier performance enhancement and consistently requires relationship-specific investments. It is important to invest money, experts and/or machines in a supplier to minimize the risk of an inefficient supply chain while maximizing the level of profitability. This paper provides the number of optimization models to confront this issue utilizing Model Predictive Control. We consider a centralized and distributed setting with two manufacturers and one supplier, which enables us to simulate more realistic scenarios. We implement cooperative and non-cooperative scenarios to assess their impact on the manufacturers’ revenue. Results reveal that the cooperative setting between manufacturers pays off better than non-cooperative and collaborative settings in long-term investments. However, for short-term investments, the non-cooperative setting performs better than the others. We can conclude that, in short-term supplier development investments, an added value is generated since both the manufacturers and the supplier gain flexibility, therefore, investing separately can end up with higher profit for both manufacturers.

Over the last decades, supplier development has become an increasingly important concept to remain competitive in today’s markets. Therefore, manufacturers invest resources in their suppliers to increase their abilities and, ultimately, to reduce their product prices. Thereby, most approaches found in the literature focus on long-term supplier development programs. Nevertheless, today’s volatile and dynamic markets require flexible approaches to deal with this complexity. We apply Model Predictive Control to optimize the number of supplier development projects in order to achieve flexibility while maintaining a certain level of security for all parties. Thereby, the article focusses on a multimanufacturer scenario, where two manufacturers aim to develop the same supplier. These manufacturers can establish different levels of horizontal collaboration. While previous results already show the benefits of applying this approach to a static scenario, this article extends this formulation by introducing market dynamics in the numerical simulations as well as into the optimization approach. Thus, the article proposes to derive regression models using real-world data. The article evaluates the effects of real-world market dynamics on two use cases: an automotive use case and a use case from the mobile phone sector. The results show that assuming market dynamics during the optimization leads to increased or at least close-to-equal revenues across the involved partners. The average increase ranges from approximately 1% to 5% depending on the type and magnitude of the dynamics. Thereby, the results differ depending on the selected collaboration scheme. While a full-cooperative collaboration scheme benefits the least from regarding dynamics in the optimization, it results in the highest overall revenue across all partners.

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Supplier development constitutes one of the current tools to enhance supply chain performance. While most literature in this context focuses on the relationship between manufacturers and suppliers, supplier development also provides an opportunity for distinct manufacturers to collaborate in enhancing a joint supplier. This article proposes a model for the optimization of such joint supplier development programs, which incorporates the effects of trust in the manufacturer-to-manufacturer relationship. This article uses a model-predictive formulation to obtain optimal supplier development investment decisions to consider the strong dynamics of the markets. Thereby, the model is designed to be highly customizable to the needs and requirements of different companies. We analyzed the price development related to Mercedes’ A-Class cars and the cost development in the automotive sector over the last ten years in Germany. According to the obtained result, the proposed model shows a sensible behavior in including trust and its effects in supplier development, even when just applying a set of generalized rules. Moreover, the numeric experiments showed that aiming for a balanced mix of optimizing revenue and trust results in the highest revenue obtained by each partner.