Why most of the supplier development programs fail in discrete manufacturing – findings from selected Indian discrete manufacturing industries

Abstract

Supplier relationship management is one of the key functions of supply chain management and strategically important for many competitive organizations. The critical function of the supplier relationship is to identify the organizational strategic need and to develop the suppliers in line with that. However, most supplier development programs fail in discrete manufacturing industries due to associated problems in both the buying and selling organizations. This research explores the importance of supplier development along with attributes responsible for failure of supplier development programs in discrete manufacturing industries. This study also provides theoretical frameworks for supplier development and barriers to supplier development in the discrete manufacturing segment.

Supplier service quality in supply chains of Indian SMEs: A dual direction dyadic perspective

“…Traditionally, service quality driven operations have been overlooked in such units with an understanding that transaction specific opportunistic approach may work best for SMEs. Mohanty et al (2014) argue that in the supply of raw materials, the quality of service is a major factor in competition. This may be more relevant in the SME clusters where manufacturers produce intrinsically similar products.…”

Ranking the barriers of supplier development using fuzzy AHP approach

“…Effective communication and feedback between buyer and supplier plays a key role for implementation of SD activities. The lack of effective communication against the supplier evaluation and lack of information sharing makes difficult for implementation of SD activity (Mohanty et al, 2014). The efforts like unstructured quality improvement programs without knowing the exact need of supplier can also are an important barrier for implementation of SD activity (Dou et al, 2014).…”

Ranking the barriers of supplier development using fuzzy AHP approach

“…Strategic SDBs SDB1 Lack of top management support Qi et al(2012) and Govindan et al (2010) SDB2 Lack of buyer commitment Dou et al (2014), Farzad and Kuan (2011) and Talluri et al (2010) SDB3 Lack of recognition of suppliers awards and incentives Sillanpää et al (2015) and Bai and Sarkis (2011) SDB4 Lack of long term contracts between buyer and supplier Wu and Wu (2015) SDB5 Lack of buyer supplier interdependency Habib et al (2015), Rosell and Lakemond (2012) and Krause et al (2007) SDB6 Differences in supplier's strategic objectives and goals Li et al(2012) SDB7 Attitude difference of buyer and supplier towards SD activity Farzad and Kuan (2011) and Talluri et al (2010) Mutual trust SDBs SDB8 Short term relationships or lack of long-term relationship Alireza and Gianmarco (2010), Batson (2008) and Wagner (2011) SDB9 Non-cooperative efforts Sevinc (2013) and Li et al (2012) SDB10 Buyer's frequently switching suppliers Mohanty et al (2014) and Raafat et al (2012) SDB11 Suppliers concern about buyer earning more profit Das et al (2006) SDB12 Opportunistic behaviour of supplier Li et al (2012) and Wagner (2006) Supplier's reliability and capability SDBs SDB13 Lack of supplier commitment or supplier's reliability Li et al (2012) and Giannakis (2008) SDB14 Customer dissatisfaction due to non-improvement in supplier performance Sevinc (2013) and More and Mattin (2012) SDB15 Current and future capabilities of supplier Sharma and Yu (2013), Kumar et al (2012) and Esposito and Passaro (2009) SDB16 Lack of environmental awareness and performance …”

“…The manufacturing organisations are always reluctant for investment, as along with benefits there may be risk associated with SD activity (Mohanty et al, 2014). The buyers always invest in transaction specific activities instead of investment in supplier's capability improvement; this becomes an obstacle in development of long term relationship and trust between buyer and supplier (Alireza and Gianmarco, 2010).…”

“…The buyers always invest in transaction specific activities instead of investment in supplier's capability improvement; this becomes an obstacle in development of long term relationship and trust between buyer and supplier (Alireza and Gianmarco, 2010). Most of the times buyers are interested for limited investment in number of suppliers (Mohanty et al, 2014), which could not help supplier to develop their capability. These are the financial constraints, which is always a prime challenge for buyers to invest in supplier's activities.…”