Supplier Development Programs Research Articles

Supplier relationship management for enterprise development in the cement industry

Background: Local small, medium and micro enterprises (SMMEs) are ready to join the cement mining companies’ supply chains. However, the perceived risks of doing business with SMMEs cause mines to be hesitant to engage in meaningful relationships with SMME suppliers.Aim: The aim of this study was to explore the nature of supplier relationship management (SRM) for enterprise and supplier development in a cement mining industry.Setting: The study is conducted in the cement mining companies and explores insights from SMMEs and cement mines insofar as SRM is concerned.Methods: The study employed a qualitative research approach, employing interviews as a research strategy and data collection method. In all, 16 individuals were purposively selected based on their expertise and experience in the area SRM for enterprise and supplier development in the cement mining industry. Thematic analysis was used as a data analysis method.Results: Following thematic data analysis, the following six themes emerged from the primary data: funding the relationship, skills development, segmenting suppliers, supplier compliance, information sharing, and supplier performance monitoring and evaluation.Conclusion: Enterprise and supplier development (ESD) programmes should be sufficiently formalised and funded. This will enable meaningful skills development for SMMEs with the specific focus on compliance and performance improvement. Enterprise and supplier development programmes should also be designed to facilitate information sharing between the mining company and SMMEs.Contribution: The study proposes the building blocks for SRM for enterprise and supplier development in the cement mining industry. The study further extends literature in the areas of SRM.

Proposal of a Hesitant Fuzzy Linguistic TOPSIS model for Supplier Sustainability Evaluation

Objective: The literature presents several multi-criteria models to support the evaluation of supplier sustainability. However, most of them deals with the environmental, social and economic dimensions in a compensatory way, and none allow the use of linguistic expressions. In order to fill these gaps, this study proposes a decision-making model, based on the Hesitant Fuzzy Linguistic (HFL) TOPSIS method, to support the supplier sustainability evaluation. Method: It can be classified as quantitative research based on modeling and simulation. The research stages encompass bibliographical research, computational modeling, pilot application in a company and analysis of results. The implementation of four computational models based on HFL-TOPSIS was done using Microsoft Excel. Results and conclusion: Results of the pilot application indicated that the model is capable of providing consistent results which are easily interpretable by the decision maker. In the application in question, economic criteria received greater weight, which reflects the priorities of the company in question. The evaluation of six suppliers by a decision maker made it possible to categorize them in a three-dimensional matrix. Research Implications: The proposed model provides support for the elaboration of supplier development programs. Another benefit is related to modeling sustainability dimensions in a non-compensatory way. Thus, if a supplier achieves high performance in one dimension, this does not compensate for a possible low performance in another dimension. Originality: In contrast to the previous approaches, It supports modeling preferences in a way closer to human cognition. It also deals with situations in which there is hesitation in choosing linguistic terms.

Decision-making models for formulating and evaluating supplier development programs: A state-of-the-art review and research paths

Supplier development refers to the efforts of a purchasing company and its suppliers to improve supplier performance and its ability to fulfill the purchasing company’s supply needs. Recently, several quantitative models have appeared in the literature that support decision-making processes regarding supplier development programs (SDPs). To update the latest research related to this subject, as well as contribute towards the establishment of a research agenda, this study presents a review of the literature on decision-making models that assist the formulating and evaluating of SDPs. This review analyzes 65 articles published in relevant journals, which are characterized in terms of several factors which are inherent to decision making in supplier development. The results show that most models focus on formulating SDPs, whereas the most common decision-making methods are Data Envelopment Analysis and Rough Set Theory. The use of multicriteria models and Fuzzy Sets has increased. The research gaps identified allowed us to propose some future research directions on the topic, calling attention to the need of developing new models considering elements that have not yet been studied in the literature, as well as performing comparative studies between them. Our results here can help orient researchers and managers in developing their decision-making processes in terms of SDP formulation and evaluation.

Integration mechanisms for material suppliers in the construction supply chain: a systematic literature review

The construction industry has long been criticized for its fragmented, inefficient, and uncoordinated supply chain. Thus, construction companies are actively looking for new strategies to overcome these issues and to improve their productivity. Supply chain integration is one strategy and many articles have addressed the mechanisms to help integrate the construction supply chain. However, little interest has been paid to material supplier integration despite their important role and their vast experience in the market. Hence, this study aims to identify the mechanisms that could contribute to facilitate material supplier integration in the construction supply chain. A systematic literature review was conducted to uncover the studies on this topic. A total of 310 articles were reviewed and analyzed to first reveal six integration mechanism categories: supplier qualification, supplier development program, contractual and relational policies, information sharing and integration systems, joint team working and problem solving, as well as supplier integration evaluation. Secondly, this study proposes a roadmap to illustrate when these mechanisms should be implemented in a construction project, according to both the project phases and the project delivery system. Finally, research gaps in the field are identified as well as future research directions that could be further explored by researchers and professionals.

Exact Solution of the Optimal Control Problem of Coordinating a Supplier-manufacturer Supply Chain in Advanced Geometric Concepts

Supply chain coordination deals with collaborative efforts of supply chain parties and making globally-optimal decisions that can improve overall performance and efficiency of the entire supply chain. In many situations, the problem of supply chain coordination requires formulation of a continuous time optimal control model, in which optimal solution is identified approximately through numerical estimation. Therefore, in this paper, a novel approach was presented for optimal control problem by developing a new formulation based on advanced ingredients of differential and Poisson geometry. Thus, the exact optimal solution of control problem can be obtained using an analytical methodology that converts the Hamilton-Jacobi-Bellman partial differential equation (PDE) into a reduced Hamiltonian system. The proposed approach was applied to the problem of coordinating supplier development programs in a two-echelon supply chain comprising of a single supplier and a manufacturing firm. For further illustrating applicability and efficiency of the proposed methodology, a numerical example was also provided. The proposed approach offers unique advantages and can be applied to find the exact solution of optimal control models in various optimization problems.

A hesitant fuzzy linguistic QFD approach for formulating sustainable supplier development programs

Buying companies increasingly need to establish supplier development programs to improve the economic, environmental, and social performance of their suppliers. However, decision models that support the analysis and choice of sustainable supplier development programs (SSDPs) are relatively scarce in the literature. Given this context, this study proposes a model to support the formulation of SSDPs based on the HFLTS-QFD method, which combines Hesitant Fuzzy Linguistic Term Sets with the Quality Function Deployment technique. This model was applied to a European automotive company based on the judgments of an expert who evaluated six SSDPs regarding a set of buying company requirements. In this application, cost and quality were considered to be the most important requirements, whereas the programs related to the adjustment of production capacity, cost reduction, and the creation of a Kaizen system were classified as priorities for implementation. The results of the sensitivity analysis tests considering pessimistic and optimistic scenarios reinforced the robustness of the model. When compared with previous approaches, the proposed model presents several advantages, such as: it allows decision makers to use more than one linguistic term and linguistic expressions to evaluate buying company requirements and SSDPs; it considers the difficulty of implementation as a decision factor in selecting the most suitable SSDPs; and it provides an implementation ranking for the selected SSDPs based on the estimated implementation time and its potential to generate benefits for the buying company.

A stochastic programming model with endogenous uncertainty for selecting supplier development programs to proactively mitigate supplier risk

Poor supplier performance can result in delays that disrupt manufacturing operations. By proactively managing supplier performance, the likelihood and severity of supplier risk can be minimized. In this paper, we study the problem of selecting optimal supplier development programs (SDPs) to improve suppliers’ performance with a limited budget to proactively reduce supplier risks for a manufacturer. A key feature of our research is that it incorporates the uncertainty in supplier performance in response to SDPs selection decisions. This uncertainty is endogenous (decision-dependent), as the probability of supplier performance depends on the selection of SDPs, which introduces modeling and algorithmic challenges. We formulate this problem as a two-stage stochastic program with decision-dependent uncertainty. We implement a sample-based greedy algorithm and an accelerated Benders’ decomposition method to solve the developed model. We evaluate our methodology using the numerical cases of four low-volume, high-value manufacturing firms. The results provide insights into the effects of the budget amount and of the number of SDPs on the firm’s expected profit. Numerical experiments demonstrate that an increase in budget results in profit growth, e.g., 5.09% profit growth for one firm. At a lower budget level, increasing the number of available SDPs results in more profit growth. The results also demonstrate the significance of considering uncertainty in supplier performance and considering multiple supplier risks for the firm. In addition, computational experiments demonstrate that our algorithms, especially our greedy approximation algorithm, can solve large-sized problems in a reasonable time.

On the effectiveness of supplier development programs: The role of supply-side moderators

Given the managerial/financial commitments needed for supplier development programs, buying firms need to be selective of the suppliers they engage for development. This paper examines the moderating role of five supply-side factors (i.e. supplier size, supply share, product complexity, buyer-supplier integration, and the supplier's management systems) in the relationship between supplier development and supplier performance, through a structural model, which is developed theoretically, and tested empirically using survey data of 142 firms.The results indicate that when supplier development is in the form of buyer direct involvement, its impact on supplier performance is significantly moderated by supplier size, product complexity, buyer-supplier integration, and the supplier's management systems. Meanwhile, the impact of supplier development, in the form of assessment/certification, is moderated by buyer-supplier integration. The outcomes of this paper fill the gaps in the existing knowledge of supplier development, and show the sensitivity of supplier development programs to some newly introduced supply-side factors.

Supplier Development Program Through Knowledge Sharing Effectiveness: A Mentorship Approach

The market in which firms compete magnifies the need for buying firms to effectively manage and develop their supply chain. One of the important notions in the management and development of the supply chain is the implementation of supplier development program. Previous extensive literature review has identified various types of activity in the supplier development program, which categorized as low involvement activity to high involvement activity. Further, extensive literatures on supplier development program implementation and its implication on supplier’s capability are also available. However, there is still limited empirical research for investigating the determinants of knowledge sharing effectiveness in supplier development programs. Aimed at bridging that gap, this study attempts to investigating the role of supplier’s organizational culture, information and communication technology (ICT), and perceived behavioral control as the determinants of knowledge sharing effectiveness by mentorship in the supplier development program (SD). A survey questionnaire was employed to collect data from 200 suppliers after conducting mentorship training at the suppliers’ site. The data were analyzed using bootstrap resampling method (with 5,000 resamples). The bootstrap samples are used to estimate the Partial Least Square (PLS) path model. The results of path analysis indicated that all variables are significantly associated with knowledge sharing effectiveness with mentoring mechanism (p-values< 0.05) except collaborative culture to knowledge sharing effectiveness which was insignificant. It was also observed that ICT and perceived behavioral control affected the effectiveness of knowledge sharing by mentorship in the SD program.

Satisfaction of professionals of participating companies with the performance of supplier development programs

Abstract: With the aim of demonstrating the elements that lead to the satisfaction of the professionals of participating companies with the performance of the Supplier Development Programs - SDPs, something that can improve the performance of this type of program, this research aimed to identify if the trust, in its affective, behavioral and cognitive components, influences the commitment and the perception of less risks, leading, consequently, to the satisfaction of the professionals of participating companies with the performance of the SDPs to which they are linked. Based on studies involving all the analyzed constructs, relationships between them were suggested and a structural model was proposed associating them. A quantitative, descriptive and cross-sectional study was carried out involving professionals from buyers and suppliers that participate in SDPs from all over Brazil, obtaining a sample, characterized as non-probabilistic and by accessibility, of 609 respondents from the application of a self-administered electronic questionnaire. For the analysis of the data, the modeling of structural equations was used, which indicated a positive relation for almost all the hypotheses, with only one being rejected. The findings suggest that reinforcing trust, mainly behavioral and cognitive, can increase the commitment of companies to the actions developed by the SDPs to which they are linked, as well as generate the perception that there are fewer risks when transacting with companies also linked to these programs, resulting in the satisfaction of buyers and suppliers. This may result in better program efficiency and effectiveness, and this is a contribution of this study, by identifying what leads participants to SDPs to be satisfied.

Managing financially distressed suppliers in supplier development programmes : a case study in the South African retail industry

Managing financially distressed suppliers in supplier development programmes : a case study in the South African retail industry

Buyer-led environmental supplier development: Can suppliers really help it?

The importance of supplier development programs to enhance supply chain environmental capabilities has often been posited. However, the literature is limited in identifying and explaining the factors that may influence or mediate the effectiveness of such programs. This paper examines the role of environmental supplier development programs led by the buying organization on supplier environmental practices, while testing the mediating effects of the supplier in the forms of resource allocation and collaboration with the buyer. The relationships are tested based on survey data from 267 supplier organizations in the UK using Partial Least Squares (PLS). The results indicate that supplier development in the form of setting requirements and audits has a wide, positive impact on all supplier environmental activities, while environmental supplier development in the form of direct projects only affects supplier environmental activities in logistics and transport. The results for the mediation effects tested are varied: while supplier collaboration is important to enhance the supplier logistics and transport activities, supplier resource allocation proves to be mediating the impact of environmental supplier development on the supplier energy efficiency and logistics and transport activities. The research sheds new light on the effectiveness of supplier development and environmental programs. The findings indicate that buying organizations should make explicit reference to the way they define supplier collaboration and resource allocation for their environmental plans and environmental supplier development programs to be effective.

New approaches to supermarket supplier development programmes in Southern Africa

ABSTRACT Supermarkets are strong catalysts to stimulate the growth and development of suppliers of processed food and manufactured products in Southern Africa. This paper assesses the role of supermarkets and governments in developing supplier capabilities through supplier development programmes. In South Africa, a shift is evident in supplier development programmes by supermarkets away from mere compliance as part of black economic empowerment or social responsibility objectives, to more mutually beneficial, commercially oriented and long-term investments. There is still considerable scope to replicate, broaden and deepen these programmes, including extending them to the region. The paper draws lessons from the Namibian Retail Sector Charter as the first and only sector-wide intervention in the region that combines a voluntary code of conduct and supplier development commitments, with complementary support from the government. The paper also highlights interventions in South Africa and internationally on efforts to curb supermarket buyer power which negatively affects suppliers.

Green supplier development programmes selection: a hybrid fuzzy multi-criteria decision-making approach

ABSTRACT This study aims to evaluate the Green Supplier Development Programs (GSDPs) for greening a supply chain. However, this problem is threatened by restricted quantitative information, the specific context of the organisation, lack of prior experience and varying supplier backgrounds. In this paper, we propose a fuzzy integrated Multi-Criteria Decision-Making approach for investigating and prioritising GSDPs. The approach is developed by integrating fuzzy Decision-Making Trial and Evaluation Laboratory (DEMATEL), fuzzy Analytic Hierarchy Process (AHP) and Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) methods. First, fuzzy DEMATEL is applied to determine the main green factors, then the fuzzy AHP method is used to acquire the local weights of criteria, and finally, the GSDPs are prioritised based on the green factors by fuzzy TOPSIS. The proposed approach is employed to estimate GSDPs of the painting companies. The outcomes indicate that ‘requiring ISO 14,000 certification for suppliers? and ‘building top management commitment for suppliers for green supply practices’ have the highest and lowest impact on improving the environmental performance of suppliers, respectively. It is also concluded that ‘green procurement’ measure has the highest effect on prioritising the GSDPs.

The influence of supplier development programs on supplier performance

A major responsibility of purchasing professionals is to monitor the performance of suppliers in their supply chain system. Governance relates to processes and decisions that seek to define actions, and verify supplier performance. Governance mechanisms are the tools in which power and risk are stabilized in interorganizational relationships. As a governance mechanism, supplier development programs (SDPs), which include supplier bilateral/communications, incentives, competitive pressures and direct involvement, represent a surrogate form of power exerted by buying organizations. Bilateral/communication is defined as two-way communication using an evaluation process. The ultimate success of SDPs must assess and be mindful of the supplying organizations’ vantage point. Little is understood about how SDPs influence supplier performance. This is the first large-scale empirical study to investigate the use of supplier development programs (SDPs) as a surrogate for governance power on supplying organizations. Using structural equation modeling and primary data from 141 first-tier North American automotive suppliers, the results suggest that the relationship between SDP and supplier performance is mediated by bilateral/communication, cooperation and commitment, and that SDPs directly affect the relationship between buying and selling organizations. It was found that it is fruitless for buying organizations to implement bilateral/communications, incentives, competitive pressure or direct involvement without first building exceptional relationships with their suppliers. Finally, the findings suggest that bilateral/communications, cooperation and commitment are key drivers of supplier performance.

공급자 기술역량 개발을 위한 공급자 개발 프로그램과 전략적 파트너십의 역할에 관한 연구: 국내 공급자 관점에서

공급자 기술역량 개발을 위한 공급자 개발 프로그램과 전략적 파트너십의 역할에 관한 연구: 국내 공급자 관점에서

Optimization of Supplier Development under Market Dynamics

Over the last decades, supplier development has become an increasingly important concept to remain competitive in today’s markets. Therefore, manufacturers invest resources in their suppliers to increase their abilities and, ultimately, to reduce their product prices. Thereby, most approaches found in the literature focus on long-term supplier development programs. Nevertheless, today’s volatile and dynamic markets require flexible approaches to deal with this complexity. We apply Model Predictive Control to optimize the number of supplier development projects in order to achieve flexibility while maintaining a certain level of security for all parties. Thereby, the article focusses on a multimanufacturer scenario, where two manufacturers aim to develop the same supplier. These manufacturers can establish different levels of horizontal collaboration. While previous results already show the benefits of applying this approach to a static scenario, this article extends this formulation by introducing market dynamics in the numerical simulations as well as into the optimization approach. Thus, the article proposes to derive regression models using real-world data. The article evaluates the effects of real-world market dynamics on two use cases: an automotive use case and a use case from the mobile phone sector. The results show that assuming market dynamics during the optimization leads to increased or at least close-to-equal revenues across the involved partners. The average increase ranges from approximately 1% to 5% depending on the type and magnitude of the dynamics. Thereby, the results differ depending on the selected collaboration scheme. While a full-cooperative collaboration scheme benefits the least from regarding dynamics in the optimization, it results in the highest overall revenue across all partners.

Barriers for green supplier development programs in manufacturing industry

Green supplier development (GSD) has emerged as an important green supply chain management activity since the supplier environmental performance is the overall greatest contributor to environmental issues in manufacturing industry. In order to successfully implement GSD, manufacturing firms should seek to identify barriers and remove them in the initial stages of green supplier development programs (GSDPs). These barriers do not only affect the GSDPs but also influence each other. Their relationship and their role in the implementation of GSDPs require additional investigation. In this article, GSD barriers are identified for the manufacturing industry. A hybrid methodology is developed involving Grey-DEMATEL and Grey-ISM to identify their relationships and roles in the implementation of GSDPs under uncertainty. Empirical data from the equipment manufacturing industry in China are utilized to gain insights into the GSD barriers phenomena. Findings using Grey-MICMAC analysis imply that four barriers have been identified as weak linkage variables. The results obtained from Grey-ISM analysis show that manufacturing firms first and foremost need the support of government regulations externally and the top management commitment internally to effectively implement GSDPs in the manufacturing industry in China. Implications and directions for further studies are identified based on the exploratory findings.

A Numerical Study on the Effects of Trust in Supplier Development

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.

Differences Between Supplier Development Programme of Foreign and Local Malaysian Automotive Suppliers

Research into supplier development has raised issues on the buyer’s relationship with the supplier. A buyer with collaborative relationship would have more interest in supplier development. From the viewpoint of the suppliers, buyers who provided assistance could help the suppliers in developing their capability, a situation that might be particularly relevant in developing and emerging countries. The automotive manufacturers have implemented supplier development programmes for their suppliers, both in developed and developing countries. This raises a question on supplier development programmes in developing countries: How do supplier development programmes differ between a local (Malaysian) supplier and a foreign (non-Malaysian) supplier for Malaysian automakers (buyers)? In this research, interviews were conducted at three supplier organisations, of which one was Australian and two were Malaysian, where all three were suppliers for a Malaysian automaker. This study found that the Malaysian and Australian suppliers differed in supplier categories, customisation versus standardised products and buyer involvement. The study suggests that buyer differences with regard to supplier relationship, supplier commitment, type of product and size of supplier organisation play a role in supplier development.