The Supplier Development Program: A Conceptual Model

Abstract

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.

Benchmarking Supplier Development: An Empirical Case Study of Validating a Framework to Improve Buyer-Supplier Relationship

“…Moreover, researchers have focused on the firm's operations strategy inclined towards supplier development and improved supplier performance. They highlighted some supplier development approaches and drivers that are most important supporting factors in transforming buyers' efforts into supplier development and performance improvement [26,27] and [8].…”

“…Reference [20] highlighted the importance of certification and evaluation in supplier development process and stated that it provides not only a competitive edge to buyers to assess their suppliers' performance but a strategic way to set a vision for suppliers. Similarly, supplier assessment is a critical success source of evaluating the competency, quality, technical know-how, cost, and delivery capability of suppliers [39] and [26]. Feedback in supplier assessment is a useful tool which contains the important information about the suppliers' performance.…”

Supplier development and its incentives in infrastructure mega-projects: A case study on Hong Kong–Zhuhai–Macao Bridge project

“…Therefore, the perception of the future market demand will influence the strategy chosen by the supplier, furthermore, the successive supplier development activities (Nagati and Rebolledo, 2013). 4) Trust, bilateral communication and suppliers' competitiveness Apart from the above-mentioned factors, the mutual trust between the owner and the supplier (Handfield et al, 2000;Li et al, 2007;Sako, 2004), bilateral communication (Krause, 1999), and competitiveness of the supplier (Hahn et al, 1990;Mahapatra et al, 2012;Modi and Mabert, 2007) may influence supplier development. Table 1 summarizes the drivers and barriers of construction supplier development.…”

“…Krause et al, 2000;Nagati and Rebolledo, 2013;Li et al, 2007;Krause, 1999 Suppliers' competitiveness Suppliers' own abilities, including product quality, productivity, and management capacity, affect the owner's supplier selection and supplier development method and input. Hahn et al, 1990;Mahapatra et al, 2012;Modi and Mabert, 2007 land near the construction site to assemble large segments of steel box girders. Therefore, the perception of the future market demand will influence the strategy chosen by the supplier, furthermore, the successive supplier development activities (Nagati and Rebolledo, 2013).…”

“…The latter is market-driven supplier development that requires both a buyer and a supplier to invest many resources to enhance the long-term performance of the supplier (Krause et al, 1998). Supplier development generally involves the evaluation of supplier, covering the supplier's technology, quality, delivery, funding, and management, identification of domains that need improvement, formulation of supplier development plans and programs, and assessment of the supplier development effect (Hahn et al, 1990).…”