Improving supplier capability through training: Evidence from the Chinese Automobile Industry

Abstract

Supplier training to develop and improve supplier capabilities to meet the needs of the Original Equipment Manufacturers (OEMs) is necessary for supply chain efficiency and effectiveness. In the absence of any comprehensive model for supplier training need assessment and measurement, in this paper, we first propose a supplier training model and then use the internationally accepted framework of MMOG/LE (Materials Management Operations Guidelines/Logistics Evaluation) to identify the supplier training needs and to design a supplier training curriculum for an OEM in the Chinese automobile industry. Then we adopt the MMOG/LE standards to assess the effectiveness of the proposed supplier training curriculum to improve the perceptions of supplier capabilities related to production and logistics management including sustainability and risk management topics. We found that supplier capabilities perceptions of the purchasing department of the OEM, average supplier capability scores, and the pass rates on the MMOG/LE standard test increased after the completion of the supplier training. Based on these findings, we conclude that supplier training can be used to improve supplier’s capability to meet the needs of the OEMs in improving their performance while contributing to the success of their suppliers at the same time. Thus, our proposed supplier training model development and effectiveness assessment framework can be supplemented with some existing analytical approaches to improve buyer–supplier relationship and enhance the profitability of each partner in a supply chain.