Evaluating the critical success factors of supplier development: a case study

Purpose – The purpose of this paper is to identify and evaluate the critical success factors (CSFs) responsible for supplier development (SD) in a manufacturing supply chain environment.Design/methodology/approach – In total, 13 CSFs for SD are identified (i.e. long‐term strategic goal; top management commitment; incentives; supplier's supplier condition; proximity to manufacturing base; supplier certification; innovation capability; information sharing; environmental readiness; external environment; project completion experience; supplier status and direct involvement) through extensive literature review and discussion held with managers/engineers in different Indian manufacturing companies. A fuzzy analytic hierarchy process (FAHP) is proposed and developed to evaluate the degree of impact of each CSF on SD.Findings – The degree of impact for each CSF on SD is established for an Indian company. The results are discussed in detail with managerial implications. The long‐term strategic goal is found to be ...

[1]  Daniel R. Krause,et al.  Supplier Development Practices: Product- and Service-Based Industry Comparisons , 2002 .

[2]  Amy Hsin-I Lee,et al.  A fuzzy supplier selection model with the consideration of benefits, opportunities, costs and risks , 2009, Expert Syst. Appl..

[3]  He-Yau Kang,et al.  A green supplier selection model for high-tech industry , 2009, Expert Syst. Appl..

[4]  Kannan Govindan,et al.  Analyzing supplier development criteria for an automobile industry , 2010, Ind. Manag. Data Syst..

[5]  Sasmita Choudhury,et al.  Why most of the supplier development programs fail in discrete manufacturing – findings from selected Indian discrete manufacturing industries , 2014 .

[6]  Stephan M. Wagner.  A firm's responses to deficient suppliers and competitive advantage , 2006 .

[7]  Joongsan Oh,et al.  The influence of supplier capabilities and technology uncertainty on manufacturer‐supplier collaboration: A study of the Korean automotive industry , 2008 .

[8]  Richard R. Young,et al.  Supplier Assistance Within Supplier Development Initiatives , 2004 .

[9]  Manoj Kumar Tiwari,et al.  Global supplier selection: a fuzzy-AHP approach , 2008 .

[10]  Catherine L. Wang,et al.  The development and validation of the organisational innovativeness construct using confirmatory factor analysis , 2004 .

[11]  Daniel R. Krause.  The antecedents of buying firms' efforts to improve suppliers , 1999 .

[12]  W. Ouchi,et al.  JAPANESE-STYLE PARTNERSHIPS -- GIVING COMPANIES A COMPETITIVE EDGE. , 1993 .

[13]  Om Prakash Yadav,et al.  A fuzzy-AHP approach to prioritization of CS attributes in target planning for automotive product development , 2010, Expert Syst. Appl..

[14]  Ufuk Cebeci,et al.  Fuzzy AHP-based decision support system for selecting ERP systems in textile industry by using balanced scorecard , 2009, Expert Syst. Appl..

[15]  Srikanta Routroy,et al.  Addressing the Root Cause Impediments for Supplier Development in Manufacturing Environment , 2014 .

[16]  John N. Pearson,et al.  Strategically managed buyer–supplier relationships and performance outcomes , 1999 .

[17]  Sachin B. Modi,et al.  Supplier development: Improving supplier performance through knowledge transfer , 2007 .

[18]  Chan K. Hahn,et al.  The Supplier Development Program: A Conceptual Model , 1990 .

[19]  Jinwoo Park,et al.  An integrative framework for supplier relationship management , 2010, Ind. Manag. Data Syst..

[20]  Kathryn Walsh,et al.  Enhancing technological capability through supplier development: a study of the UK aerospace industry , 2002, IEEE Trans. Engineering Management.

[21]  T. Cheng,et al.  The impact of specific supplier development efforts on buyer competitive advantage: an empirical model , 2007 .

[22]  R. Batson.  A survey of best practices in automotive supplier development , 2008 .

[23]  Jan Stentoft Arlbjørn,et al.  Impact of relational norms, supplier development and trust on supplier performance , 2008 .

[24]  Srinivas Talluri,et al.  Manufacturer cooperation in supplier development under risk , 2010, Eur. J. Oper. Res..

[25]  T. Saaty,et al.  The Analytic Hierarchy Process , 1985 .

[26]  Roger Calantone,et al.  A Structural Analysis of the Effectiveness of Buying Firms' Strategies to Improve Supplier Performance , 2000, Decis. Sci..

[27]  He Mao,et al.  Suppliers' Innovative Capabilities and Their Relationship with Customers: An Evidence from Packaging Machinery Industry in China , 2007, 2007 International Conference on Computational Intelligence and Security Workshops (CISW 2007).

[28]  Peter Naudé,et al.  How is information technology affecting business relationships? Results from a UK survey , 2003 .

[29]  Larry C. Giunipero,et al.  Motivating and Monitoring JIT Supplier Performance , 1990 .

[30]  Daniel R. Krause,et al.  Avoid the Pitfalls in Supplier Development , 2000 .

[31]  Mohan M. Kumaraswamy,et al.  Predicting purchasing performance: The role of supplier development programs , 2003 .

[32]  S. G. Deshmukh,et al.  Analyzing the interaction of critical factors of supplier development using Interpretive Structural Modeling—an empirical study , 2009 .

[33]  Daniel R. Krause,et al.  The relationships between supplier development, commitment, social capital accumulation and performance improvement , 2007 .

[34]  F. Nabhani,et al.  Supplier development practice: Arising the problems of upstream delivery for a food distribution SME in the UK , 2010 .

[35]  Kun Liao,et al.  Achieving mass customization through trust‐driven information sharing: a supplier's perspective , 2011 .

[36]  P. Humphreys,et al.  The impact of supplier development on buyer-supplier performance , 2004 .

[37]  Michael Quayle.  Supplier Development for UK Small and Medium-sized Enterprises , 2000 .

[38]  Kannan Govindan,et al.  Selection of third party reverse logistics provider using Fuzzy extent analysis , 2011 .

[39]  R. M. Monczka,et al.  Supply Base Strategies to Maximize Supplier Performance , 1993 .

[40]  Ozcan Kilincci,et al.  Fuzzy AHP approach for supplier selection in a washing machine company , 2011, Expert Syst. Appl..

[41]  Janet L. Hartley,et al.  Process Oriented Supplier Development: Building the Capability for Change , 1997 .

[42]  C. Watts,et al.  Supplier Development Programs: An Empirical Analysis , 1993 .

[43]  Daniel R. Krause,et al.  Critical elements of supplier development The buying-firm perspective , 1997 .

[44]  Stephan M. Wagner.  Supplier development practices: an exploratory study , 2006 .

[45]  Cengiz Kahraman,et al.  Multi-attribute comparison of catering service companies using fuzzy AHP: The case of Turkey , 2004 .

[46]  A. Petroni,et al.  Innovation as a determinant of suppliers’ roles and performances: an empirical study in the food machinery industry , 2002 .

[47]  Yu Jing,et al.  A discussion on Extent Analysis Method and applications of fuzzy AHP , 1999, Eur. J. Oper. Res..

[48]  Daniel R. Krause,et al.  An empirical investigation of supplier development: reactive and strategic processes , 1998 .

[49]  He-Yau Kang,et al.  Fuzzy multiple goal programming applied to TFT-LCD supplier selection by downstream manufacturers , 2009, Expert Syst. Appl..

[50]  M. Meulenberg,et al.  Market Orientation, Innovativeness, Product Innovation, and Performance in Small Firms , 2004 .

[51]  David Carson.  Marketing and entrepreneurship in SMEs : an innovative approach , 1995 .

[52]  R. J. Kuo,et al.  Developing a supplier selection system through integrating fuzzy AHP and fuzzy DEA: a case study on an auto lighting system company in Taiwan , 2010 .

[53]  Wai Keung Wong,et al.  A heuristic time-invariant model for fuzzy time series forecasting , 2011, Expert Syst. Appl..

[54]  Marc Wouters,et al.  Supplier development and cost management in Southeast Asia—Results from a field study , 2007 .

[55]  D. Chang.  Applications of the extent analysis method on fuzzy AHP , 1996 .

[56]  R. Abdullah,et al.  Critical Elements of Supplier Development in the Malaysian Automobile Industry: Parts and Components Procurement and Supplier Development Practice at Proton , 2003 .

[57]  Sheung-Kwon Kim,et al.  An effective supplier development methodology for enhancing supply chain performance , 2000, Proceedings of the 2000 IEEE International Conference on Management of Innovation and Technology. ICMIT 2000. 'Management in the 21st Century' (Cat. No.00EX457).

[58]  Stephan M. Wagner.  Supplier development and the relationship life-cycle , 2011 .

[59]  Timon C. Du,et al.  Applying Six-Sigma to Supplier Development , 2004 .

[60]  Felix T.S. Chan,et al.  Integrating environmental criteria into the supplier selection process , 2003 .

[61]  Mari Sako,et al.  Supplier development at Honda, Nissan and Toyota: comparative case studies of organizational capability enhancement , 2004 .

[62]  Selçuk Perçin,et al.  Journal of Enterprise Information Management Use of fuzzy AHP for evaluating the benefits of information-sharing decisions in a supply chain , 2015 .

[63]  G. Hult,et al.  Innovativeness: Its antecedents and impact on business performance , 2004 .

[64]  A. Carr,et al.  Communication methods, information sharing, supplier development and performance , 2007 .

[65]  Christian Hicks,et al.  Specifications and supplier development in the UK electrical transmission and distribution equipment industry , 2004 .

[66]  J. H. Dyer,et al.  Creating and managing a high‐performance knowledge‐sharing network: the Toyota case , 2000 .

[67]  Stephan M. Wagner.  Indirect and Direct Supplier Development: Performance Implications of Individual and Combined Effects , 2010, IEEE Transactions on Engineering Management.

[68]  C K Kwong,et al.  Determining the Importance Weights for the Customer Requirements in QFD Using a Fuzzy AHP with an Extent Analysis Approach , 2003 .

[69]  Daniel R. Krause.  Supplier Development: Current Practices and Outcomes , 1997 .

[70]  P. Humphreys,et al.  An investigation into supplier development activities and their influence on performance in the Chinese electronics industry , 2011 .

[71]  C. Kahraman,et al.  Multi‐criteria supplier selection using fuzzy AHP , 2003 .

[72]  Joseph Sarkis,et al.  Evaluating supplier development programs with a grey based rough set methodology , 2011, Expert Syst. Appl..

[73]  Manoj Kumar Tiwari,et al.  Justification for the selection of a reconfigurable manufacturing system: a fuzzy analytical hierarchy based approach , 2007 .

[74]  Wann‐Yih Wu,et al.  The mediating effect of relationship learning on the relationship between supplier development strategy and raising competence , 2011 .