The Supplier Development Program: A Conceptual Model

Chan K. Hahn, Charles A. Watts, Kee Young Kim

Journal of Purchasing and Materials Management · 1990 · 331 citations · 1 references

Concepts

TL;DR

To compete effectively in the global market, firms must maintain a network of competent suppliers. This article presents a conceptual model of the organizational decision process for a supplier development program, aimed at creating and sustaining such a network and enhancing supplier capabilities to meet competitive challenges. The model is grounded in empirical evidence from several companies actively engaged in supplier development programs. The decision model serves as a guideline for designing programs that align purchasing strategy with a firm’s overall competitive strategy, as validated by the empirical evidence.

Abstract

In order to compete effectively in the world market, a company must have a network of competent suppliers. A supplier development program is designed to create and maintain such a network—and to improve various supplier capabilities that are necessary for the buying organization to meet its increasing competitive challenges. This article details a conceptual model that describes the organizational decision process associated with a supplier development program. The proposed decision model can serve as a guideline for designing a supplier development program that can link purchasing strategy with a firm's overall corporate competitive strategy. Empirical evidence drawn from the experience of several companies actively involved with such a program is used to validate the model.

References

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