Managing suppliers: when fewer can mean more

TLDR

Manufacturing firms emphasize supply‑chain management, yet literature increasingly highlights a trend toward reducing supplier bases. The study examined four firms and found that cutting suppliers frees time to manage the remaining ones more effectively. Analysis of 201 UK manufacturers shows a 9–35% reduction in suppliers, driven by criteria that avoid single‑sourcing and aim to free time for better supplier management, offering insights for researchers and industry managers.

Abstract

Shows that manufacturing companies place a strong emphasis on the role of supply‐chain management ‐ the management of supplies, suppliers, inventory and distribution. Much of the literature talks about the trend to reduce supplier base. Database analysis gave empirical evidence of this trend in UK manufacturing companies ‐ 201 companies from different industrial sectors cut their supplier base over the last four years, by 9 per cent in the household products sector and approximately 35 per cent in the process, engineering and electronics sectors. Reports on further research at four companies, looking at their experiences with suppliers and establishes that a key reason for supplier base reduction is to free time to manage the remaining suppliers more effectively. Identifies the criteria used for supplier selection and reasons why single‐sourcing was avoided. Suggests that these findings on supplier management have implications for both researchers and managers in industry.