Supplier Developmet: Theories and Practices

Abstract

The purpose of this paper is to find out current supplier development practices employed by different organization. Paper mainly focuses on supplier development, supplier development activities, programs, critical elements and beneficial move by buyer. Importance of relationship development and factors responsible for it long with current gaps in this field is discussed in brief.

The latest ‘big thing’ for South African companies: Enterprise and supplier development – proposing an implementation framework

“…Supplier development (SD) is defined as any effort of a buying firm with its suppliers to increase the performance or capabilities of the supplier with a view to meeting the buying firm's supply needs (Krause & Ellram 1997). Supplier development also refers to an organisation's efforts to create and maintain a network of competent suppliers (Rajendra, Mahajan & Joshi 2012). Like other market actors such as producers and traders, suppliers have an important role to play in enterprise development.…”

“…This multi-dimensionality can be seen from various typologies that describe the concept. For example, Rajendra et al (2012) distinguish between results oriented and process-oriented supplier development programmes.…”

“…According to the proposed framework, supplier development involves any activity meant to develop the capabilities of suppliers within the buying firm's supply chains. As discussed earlier, SD can be either 'results-oriented', in which case its focus lies on solving a specific problem of a supplier, such as in the areas of quality and cost, or 'process-oriented', which is meant for continuous improvement of a supplier, such as helping increase their capabilities for continuous improvement (Rajendra et al 2012) for the long-term mutual benefit of both parties (Sako 2004). Unlike initiatives focused on solving a supplier's specific problem, SD for continuous improvement is a resource-intensive process which requires relatively huge financial and human investments.…”

Przedsiębiorczość: jednostka, organizacja, kontekst

“…Długookresowe i oparte na współpracy zaangażowanie pomiędzy przedsiębiorstwem i dostawcą powinno poprawić jego zdolności w zakresie techniki, kosztów, jakości, realizacji dostaw, jak również wspierać wdrażanie usprawnień (Hahn, Watts i Kim, 1990;za: Watts i Hahn, 1993). Ujmując rozwój dostawców jako strategię, podkreśla się, że jest ona inicjowana przez organizację-kupującą w dążeniu do wzmocnienia efektów działań i/lub możliwości dostawcy, by mógł on zaspokajać potrzeby zakupowe tej organizacji w sposób bardziej efektywny i niezawodny, co z kolei zwiększy jej przewagę konkurencyjną (Chavhan, Mahajan i Sarang, 2012).…”

Incentives for production capacity improvement in construction supplier development

“…For the strategic orientation, the reactive efforts include making only limited, minimal and specific investments in terms of resources or time, to eliminate a specific supplier's deficiencies and achieve short-term improvements based on problemdriven requirement [11]. The proactive efforts include a large amount of resource commitment and investment in capacity development to establish continuity in buyer-supplier relationships and continuously improve the long-term capabilities of suppliers based on market-driven requirement [19].…”