Abstract
Supplier development constitutes one of the current tools to enhance supply chain performance. While most literature in this context focuses on the relationship between manufacturers and suppliers, supplier development also provides an opportunity for distinct manufacturers to collaborate in enhancing a joint supplier. This article proposes a model for the optimization of such joint supplier development programs, which incorporates the effects of trust in the manufacturer-to-manufacturer relationship. This article uses a model-predictive formulation to obtain optimal supplier development investment decisions to consider the strong dynamics of the markets. Thereby, the model is designed to be highly customizable to the needs and requirements of different companies. We analyzed the price development related to Mercedes’ A-Class cars and the cost development in the automotive sector over the last ten years in Germany. According to the obtained result, the proposed model shows a sensible behavior in including trust and its effects in supplier development, even when just applying a set of generalized rules. Moreover, the numeric experiments showed that aiming for a balanced mix of optimizing revenue and trust results in the highest revenue obtained by each partner.
Highlights
Today’s original equipment manufacturers (OEMs) consider supplier performance as a significant factor in their competitive advantage
This article proposes a model for the optimization of such joint supplier development programs, which incorporates the effects of trust in the manufacturer-to-manufacturer relationship
This paper aims to consider the effect of trust on the gains of supplier development for engaged OEMs who invest in the same supplier
Summary
Today’s original equipment manufacturers (OEMs) consider supplier performance as a significant factor in their competitive advantage. OEMs can further improve their products by investments; at some point, they need suppliers to modify their performance, processes, or components. OEMs often have to rely heavily on their suppliers, even engaging in close cooperation to enhance the suppliers’ competencies. As a result of the high specialization, several manufacturers often involve the same supplier in their supplier development programs. Despite the close cooperation these programs require, OEMs need to continuously revise these programs, e.g., due to quickly changing market dynamics or because future investments might not yield the expected results. Previous studies showed that collaboration or even cooperation between multiple manufacturers provides extensive advantages concerning their respective supplier development programs [1,2]
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