Analysis of preferred customer enablers from supplier’s perspective

Abstract

Purpose The purpose of this paper is to identify, rank, classify and establish the structural relationships between the preferred customer enablers (PCEs). This analysis would assist a manufacturer in selectively exercising the PCEs and effectively run-through the concept of reverse marketing in the buyer-supplier relationships. Design/methodology/approach In the current study, the interpretive structure modelling and Fuzzy Matriced’ Impacts Croisés Appliquée á un Classement methods are used to analyze and structurally relate the PCEs for Indian automotive component manufacturing industry. Furthermore, the structural relationships among the PCEs were confirmed by applying a Student’s t-test. Findings The classification of PCEs through driver dependence diagrams, structural digraphs of PCEs and statistical significance of the relationships between the PCEs are the main outcomes of this study. Further, certain PCEs (under supplier interest and common interest domains) were recommended in the Indian manufacturing environment to broadly control and monitor for achieving the preferred customer status (PCS). Research limitations/implications The current study provides certain basis for a manufacturer to selectively emphasize and monitor the right PCEs and in turn effectively achieve the PCS from its key suppliers. The findings from the current analysis are more applicable in the context of Indian automotive component manufacturing industry. Practical implications The outcomes from the methodology would provide a basis for a manufacturer to develop the right strategies to become a preferred supply chain partner. Originality/value Even though the concept of PCS or reverse marketing can make remarkable impact on the business practices, it has been an ignored topic of research and its practice has been passively prophesied. In this regard, the current study could be a worthy addition toward the practice of preferred customer concept.

The purchasing department's leadership role in developing and maintaining a preferred customer status

“…Research to date has identified several tangible benefits associated to the preferred customer status, such as: early access to supplier innovation and support in the research and development programs (Schiele, 2012;Kumar and Routroy, 2016b;Patrucco et al, 2020); better quality products (Nollet et al, 2012); improved availability of products, services and resources (Steinle and Schiele, 2008;Nollet et al, 2012); price benefits (Schiele et al, 2011;Nollet et al, 2012); prioritized services (Hüttinger et al, 2012); faster transactions and on time deliveries (Nollet et al, 2012); reduced risk despite the increasing dependency (Schiele and Vos, 2015;Reichenbachs et al, 2017); lower transaction costs and better economies of scale (Bew, 2007;Bemelmans et al, 2015;Vos et al, 2016).…”

“…In other words, the purchasing department should carefully segment suppliers, identifying those who are really strategic. This would allow the organization to better adapt its approaches and practices according to those of the most important suppliers (Schiele, 2012;Kumar and Routroy, 2016a). In fact, the purchasing department could take a leadership position to effectively coordinate activities across several organizational members and the supplier, and avoid some pitfalls in the preferred customer relationship.…”