Supplier Development

SUPPLIER DEVELOPMENT

JUSTIN PARKINSON & JAMES DZIEPAK

6768923 & 6497325

LEAN CONCEPTS & CONTINUOUS IMPROVEMENT TOOLS

PROFESSOR: KEVIN HILL

FEBRUARY 23RD 2016

Buyers often have many reasons for choosing to develop key suppliers. The most compelling reason a buying firm chooses to do so, is to enhance its competitive advantage in the market and improve the relationship between the buyer and seller. (Humphreys&Chan, 2003).

A selling firm is unlikely to initiate programs designed to enhance its own performance with the goal of improving the Buying firm’s competitiveness in the market. For this reason many selling firms do not see the value in having their customers tell them how they should run their business. However, this kind of thinking is short sighted and a selling firm should take advantage of the opportunity to implement Continuous Improvement tools such as Total Quality Management, Just-In-Time, or Six Sigma. Selling firms do not always see the extrinsic value their customers have, other than the monetary value they provide from the purchase of their goods. Selling firms often ignore the experience and resources at the buying firm’s disposal.

For these reasons we believe that Supplier Development and Integration can be a key factor to the success of both the buyer and the seller, and should be throughout the supply chain to improve total supply chain performance.

The Supplier development Process does have some limitations however. The process is not the be-all-end-all to correcting the poor performance of a business. Also, the process should not be relied upon solely to increase operation efficiency. The Supplier Development process is a tool, much like the Continuous Improvement tools, it should be seen as a journey with no fixed destination or a never ending stairway of improvement. The supplier development process also relies on the willingness of both firms to do business and make operational improvements...