Evaluating the critical success factors of supplier development: a case study

Structural transformation of fuzzy analytical hierarchy process: a relevant case for Covid-19

Covid-19 has posed difficult and challenging situations to the supply chains and companies are in fix how to choose the vendors under the uncertainty and complexity in recent years. Therefore, this research aims to incorporate structural transformation of the fuzzy analytical hierarchy process (FAHP) that is most appropriate for the uncertainty and disruption caused by Covid-19 like situation for ensuring supplies from vendors. The conventional approaches for vendor selection and evaluation use numerous multi-criteria decision-making tools that may not ensure reliability in a dynamic situation caused due to Covid-19. In this research, Fleiss’ Kappa method ensures the reliability of responses from eight respondents by using pairwise comparisons and assigning weights as envisaged in FAHP. In addition to determine the reliability of responses, a step under FAHP has been altered. This alteration is demonstrated in the vendor selection case in the Covid-19 scenario. The research suggests a plausible system required to address the uncertainties associated with Covid-19 to select and evaluate vendors by modifying a FAHP. The proposed altered mechanism can be incorporated in a similar type of other decision-making circumstances such as Covid-19, where the decision-makers are more than one, and the situation is very dynamic. The study is likely to facilitate information management, algorithmic development in decision making, or machine-driven decisions in uncertain conditions. The study offers managerial implications to purchase managers to accommodate and combine multiple factors and responses concerning the vendor performances for their evaluation, thus making a process more reliable.

Supplier development under cooperative and non-cooperative investment structures

Purpose

This study analyzes supplier development investment decisions under a triadic setting (two buyers and a common supplier). In a triadic setting, the supplier development investment decision of one buyer can have a spillover effect of the benefits on other buyer. Therefore, it is utmost important for the investing buyer to understand the impact of benefit spillover on other competing buyers'. Therefore, one of the purposes of this study to analyze the supplier development investment decision of buyers under two scenarios. First, under cooperative development structure where both buyers jointly invest in supplier and share equal benefits. Second, non-cooperative investment structure where both buyers individually invest in supplier development and share unequal benefits.

Design/methodology/approach

In order to assess the impact of supplier development investment decisions on the profitability of buyers and the common supplier, the authors used game-theoretic approach. The authors design a Stackelberg leader-follower game where the supplier acts as Stackelberg leader and buyers follow the supplier's pricing decision to maximize their profit level. Additionally, both buyers decide either to cooperate or non-cooperate while investing in supplier development.

Findings

The results show that the cooperative investment is always an optimal strategy for buyers and supplier. Interestingly, the efficient buyer's share of investment level is lower under non-cooperative investment structure and he is better-off due to its capability of taking advantage from the other buyer's investment. However, the inefficient buyer, on the other hand, is worse-off under non-cooperative investment. Furthermore, comparative analysis between the two shows that initially, the buyer who extracts more profit because of the other buyers' development investment tends to prefer the non-cooperative development investment set up. However, after a certain point, the same buyer is better-off under cooperative development investment through cooperation, and sharing equal benefit of the supplier's development, as the supplier in turn, starts charging a higher wholesale price under non-cooperative investment case.

Originality/value

To the best of authors’ knowledge, extant literature on supplier development has mostly focused on. One supplier-one buyer; thus, the learning spillover effect has almost been unexplored. In real-life, different buyers often purchase from the shared supplier. Therefore, it is important to analyze the spillover of supplier development benefits due to investment of one buyer on other buyer and deriving the condition under which buyers would be incentivized to invest jointly or individually.

Multi-criteria decision-making toward supplier selection: exploration of PROMETHEE II method

Purpose

Supplier Selection (SS) is one of the vital decisions frequently executed by numerous industries. In recent times, the number of suppliers has increased enormously depending on a wide range of criteria. A selection of suppliers is a sensitive process that may impact various supply chain activities. The purpose of this research is to explore an underutilized technique called PROMETHEE II method for SS.

Design/methodology/approach

Various tools and techniques are available under multi-criteria decision-making tools, which sometimes creates confusion in researchers' minds regarding reliability. PROMETHEE II was the most prominent method for ranking all available alternatives that ultimately avoid decision-making errors. To execute this equal and unequal weights approach has been used with three case studies.

Findings

In this research, three case studies have been used and soved with the help of the PROMETHEE II approach. The study also provides fundamental insights into the supplier's ranking on different criteria using sensitivity analysis. Further, criteria were divided as per benefits and non-beneficial to get a robust result. The pros and cons of PROMETHEE II approaches are also highlighted compared to other MCDM tools in this study.

Originality/value

Most of the SS research uses either AHP or TOPSIS as per existing literature. There are very few attempts highlighted in the literature that use PROMETHEE II for the SS problem with sensitivity analysis. The proposed method is probable to motivate decision-makers to consider using a more sophisticated method like PROMETHEE II in supplier evaluation processes. This study opens a new direction for the ranking of suppliers in the field of the supply chain. The study also bears significant practical as well as managerial implications.

Reviewing and conceptualizing supplier development

Purpose

The literature on supplier development (SD) is mostly fragmented, and very little research offers insights on the interrelations of the critical elements of SD. This research aims to evaluate the significance of SD and reconceptualise it by identifying and linking the key constructs and items of SD.

Design/methodology/approach

A structured literature review of SD literature was performed, and it was followed by conducting a contingency analysis of defined constructs and the items of SD. Applying a literature review and contingency analysis allows assessing the degree to which core constructs and their operational items are addressed in the SD literature.

Findings

Our findings show that a high degree of interrelations exists among enablers, relationships and supplier development strategies (SDS), of which, only indirect SDS drives the performance outcomes. However, interrelations between the individual items of the main categories of SD remain unexplored.

Research limitations/implications

The proposed revised framework reveals significant research gaps in SD and calls for a thorough examination of the topic.

Originality/value

The key contribution of the paper is reconceptualising SD and contributing to the theoretical development of SD.

Identification of barriers to synergistic implementation of TQM-SCM

Purpose

The study aims at finding out major barriers for synergistic adoption of TQM-SCM in the medium- and large-scale manufacturing organizations in India. All these barriers create hurdles for the organizations as well as supply chain partners in improving their business performance. The study is a blend of theoretical and practical frameworks, which will focus on key barriers leading to interrupt the successful synergistic implementation of TQM-SCM in manufacturing organization.

Design/methodology/approach

Firstly, survey of 116 Indian organizations has been carried out to identify barriers that hinder successful implementation of TQM-SCM. Afterward, VIKOR approach was proposed to rank the major barriers of TQM-SCM implementation in Indian manufacturing organizations.

Findings

Identification of barriers to synergistic implementation of TQM-SCM in the manufacturing industry of India, ranking of these barriers in terms of their severity.

Originality/value

The adoption of TQM-SCM on synergistic basis is still in its early stages in India. To the authors’ knowledge, this is the first study that is designed to prioritize barriers responsible for hindering successful synergistic implementation of (TQM-SCM) in Indian manufacturing industry. Further, the results of the study will be helpful for managers in order to prepare action plans to overcome the hurdles to TQM-SCM implementation.

Numeric Evaluation of Game-Theoretic Collaboration Modes in Supplier Development

To deal with increasingly competitive challenges, today’s companies consider supplier performance as a crucial factor to their competitive advantage. Supplier development is one of the recent approaches to supplier performance enhancement and consistently requires relationship-specific investments. It is important to invest money, experts and/or machines in a supplier to minimize the risk of an inefficient supply chain while maximizing the level of profitability. This paper provides the number of optimization models to confront this issue utilizing Model Predictive Control. We consider a centralized and distributed setting with two manufacturers and one supplier, which enables us to simulate more realistic scenarios. We implement cooperative and non-cooperative scenarios to assess their impact on the manufacturers’ revenue. Results reveal that the cooperative setting between manufacturers pays off better than non-cooperative and collaborative settings in long-term investments. However, for short-term investments, the non-cooperative setting performs better than the others. We can conclude that, in short-term supplier development investments, an added value is generated since both the manufacturers and the supplier gain flexibility, therefore, investing separately can end up with higher profit for both manufacturers.

Importance of innovation and flexibility in configuring supply network sustainability

Purpose

The alignment of procurement strategy with overall business strategy is important for superior firm performance. It is also essential for firms’ purchasing structure to fit the purchasing strategy whether it is cost reduction; value analysis and/or improving delivery and increasing flexibility for achieving superior purchasing performance. The purpose of this paper is to scientifically examine the influence of organization culture (OC), green supplier development (GSD), supplier relationship management, flexibility and innovation on sustainability in supply network (SSN) under the moderation effect of institutional pressures and resources availability.

Design/methodology/approach

The study is grounded by integrating institutional theory (IT) and resource-based view (RBV) theory. The study empirically tests the conceptual model through survey data gathered from 175 respondents in the KwaZulu-Natal province of Southern Africa using structural equation modeling which is a multivariate data analysis technique that permits to simultaneously examine many relationships among manifest and latent variables.

Findings

It was found that OC plays a crucial role in shaping the workforce behavior and responsible for enhancing GSDs and building good relationship with suppliers which ultimately results into increased flexibility and innovativeness. Coercive pressures (CPs) play a moderating role between the causal relationship of innovation and SSN. Therefore, CPs have got the ability to amplify or reverse the effect between innovation and SSNs.

Research limitations/implications

The study suffers from few limitations. First, the study is restricted to one particular province in South Africa. Second, cross-sectional data were used for testing of model in the research study.

Practical implications

The findings are of great importance for both the researchers and supply chain practitioners. Supply chain practitioners may use this knowledge for benchmarking the supply network configuration process and continuously improve the process. The tested model actually shows the mechanism for enhancing SSNs. In today’s dynamic and uncertain business environment, all firms in the supply network aims to minimize risks and maximize profitability. The findings show that CPs play a moderating effect on the relationship between innovation and SSN. Whenever government authorities and institutions pressurize firms for minimizing pollution levels, we see a trend of increased innovations in the form of new product developments, usage of eco-friendly raw material and application of eco-friendly technology which ultimately minimizes the carbon footprint. Through such initiatives steel and engineering firms conform to the government norms and regulations. However, innovations are possible through collaboration with specialist suppliers and sub-suppliers by adopting a common standard across the supply network. Through this overall process of innovation, the focal firm and sub-suppliers linked in the network will benefit and ultimately achieve a competitive edge. Therefore, firms can experience multiple benefits in terms of lower development costs, lower project cycle completion time, improvement in design for re-manufacturability, low downtime, low supply risks, reduction of greenhouse gas emissions and, ultimately, sustainable development.

Originality/value

The study is unique from dual perspective – both in terms of scope and contribution to supply chain management literature. First, the study integrates flexibility and innovation to study the impact on SSNs. Second, it integrates both IT and RBV theory of firm to test the moderation effect and the findings further opens up window for future research.

Effect of supplier development activities on performance outcomes: an empirical study

Purpose

The purpose of this paper is to examine the role of supplier development activities (SDAs) in the context of three major performance outcomes (POs), i.e. supplier performance improvement (SPI), buyer’s competitive advantage improvement (BCAI) and buyer-supplier relationship improvement (BSRI).

Design/methodology/approach

A survey was conducted of 214 manufacturing organizations and the data were analyzed using factor analysis, correlation analysis and multiple hierarchical regression analysis.

Findings

This paper categorizes the identified 28 SDAs and 33 POs into five and three major categories of SDAs and POs, respectively. The results indicate a significant relationship between each aspect of SDAs and POs, except investment. The effect of each category of SDA is determined through a developed framework.

Research limitations/implications

This present study analyzes the SDAs and POs from the buyer’s point of view. A paired buyer and supplier data may provide some additional information about the relationship between SDAs and POs.

Practical implications

The outcome of this study will provide significant information for managers and academicians who are involved in outsourcing.

Originality/value

For the first time, the relationship and effect of each category of SDAs was analyzed in combination with three major POs, i.e. SPI, BSRI and BCAI.

To examine the relationships between supplier development practices and supplier-buyer relationship practices from the supplier’s perspective

Purpose

The purpose of this paper is to examine the relationships between supplier development practices (SDPs) and supplier-buyer relationship practices from the supplier’s perspective (SBRSP), and seek to understand how specific SDPs may impact a buyer’s operational performance as well as supplier-buyer relationship practices.

Design/methodology/approach

The authors conducted a survey of 512 respondents from the different manufacturing firms in India and applied structural equation modelling to test a structural model that proposes the impacts of various efforts of SDPs on a buyer’s performance as well as SBRSP.

Findings

The study concludes that SDPs and SBRSP together improve the relationship between a buyer and supplier, and this improved relationship leads to competitive advantages (CAs) followed by profitability. Results indicate that supplier perspective of buyer-supplier relationship can be improved under the condition of SDPs and SBRSP together. SDPs are driven by productive measure and competitive pressure, whereas customer uncertainty is found to be statistically insignificant.

Research limitations/implications

The study was carried out in North Maharashtra Industrial Zone of India, where the auto sector and machine/components manufacturing firms have been established for a considerable period of time. Results of the study are limited to manufacturing organizations predominantly focussing on the automobile sector and machine/components manufacturing firms.

Practical implications

This study provides significant insights into the specific impact of various SDPs and SBRSP for both academics and practitioners. SDPs along with SBRSP practices lead to improvement in the relationship leading to CAs. SBRSP suggests that trust, long-term commitments and the supplier’s perspective are important practices for relationship improvement.

Originality/value

The current study attempts to identify what are the success factors for the supplier-buyer relationship from the supplier’s perspective and SDPs and how the supplier-buyer relationship can be improved under the condition of SDPs and SBRSP. Hence, the aim is to develop a more thorough understanding of the outcomes of a supplier-buyer relationship improvement from both buyer’s and supplier’s perspective, under the conditions of supplier development to achieve CAs leading to profitability. Furthermore, the study analyses the effect of the improved supplier-buyer relationship for achieving CAs leading to profitability.

An approach to address principal supplier development impediments

Purpose

The purpose of this paper is to assist a manufacturer for determining the principal supplier development impediments (SDIs) that are affecting the supplier development programs (SDPs) and yield a basis for drawing the appropriate mitigation strategies.

Design/methodology/approach

The proposed approach starts with the application of fuzzy analytic hierarchy process and Pareto analysis to obtain the principal SDIs. Subsequently, the interpretive structural modeling and Fuzzy-Matrice d’Impacts Croisés-Multiplication Appliquée à un Classement analysis are applied on the principal SDIs to explore the root causes inducing ineffectiveness in the SDPs.

Findings

The outcomes of the proposed approach were demonstrated through a case study conducted in an Indian automotive components manufacturing company. The principal SDIs were identified, ranked, classified and structurally related for the said case company’s manufacturing environment. It was found that the lack of competent workforce, level of nascent relationship between manufacturer and suppliers and poor devolution of authority were the main SDIs that the case company has to primarily focus to make its SDPs effective.

Research limitations/implications

Although the study was conducted in a practical case situation, the obtained results are not indiscriminate to the other case situations. However, the proposed approach can be applied for analyzing the SDIs in any manufacturing environment once the set of SDIs relevant to that environment are carefully chosen.

Practical implications

The methodology would assist a manufacturer to proactively identify the SDIs that it has to primarily focus and subsequently devise the mitigation strategies for smooth running of its SDPs.

Originality/value

By utilizing the identified SDIs and applying the proposed methodology a manufacturer can find the main SDIs that are making the SDPs ineffective and accordingly fix the hindrances through certain mitigation strategies designed.

Performance analysis of supplier development programs

Purpose

The purpose of this paper is to provide an approach that a manufacturer can periodically use to measure the performances of its supplier development programs (SDPs). It also quantifies and indicates the specific supplier development outcomes (SDOs) that a manufacturer has to concentrate in improving its SDPs.

Design/methodology/approach

The proposed methodology integrates fuzzy analytic hierarchy process (to determine the importance of SDOs), Pareto analysis (to choose the significant SDOs) and fuzzy logic (to periodically determine the performance indices and grades of the SDPs) methods to measure the performances of SDPs. In order to demonstrate the utility of the methodology, a case situation is presented where the performance measures of SDPs running at five key suppliers of an Indian turbine manufacturing company were determined.

Findings

By periodically applying the above mentioned methodology, the performance indices of a manufacturer’s SDPs are measured, monitored and managed effectively. It is shown that the methodology is advantageous in clearly indicating the scope of improvement for the SDPs along the specific SDOs.

Research limitations/implications

Since the obtained results in this study are specific to a manufacturing environment, they may not be generalized. However, the generic lists of SDOs mentioned in the paper and the proposed approach can be used in any manufacturing environment for analyzing the performances of SDPs.

Practical implications

The performance analysis of SDPs would help a manufacturer to know more about the functioning of its SDPs along the timeline and provide the scope for improvement.

Originality/value

The proposed approach successfully measures and also grades the performances of SDPs. The results enable the supplier development managers to effectively distribute their investments and efforts along the SDPs.

Supplier development for sustainability: contextual barriers in global supply chains

Purpose

– The purpose of this paper is to explore contextual barriers to supplier development for sustainability (SDS) in global supply chains and managerial remedies to mitigate such barriers.

Design/methodology/approach

– A dyadic case study design was adopted with a Western European buyer and six of its Chinese suppliers. The database consists of 41 interviews and 81 documents.

Findings

– Contextual barriers to SDS in global supply chains derive from complexities in the sustainability concept, socio-economic differences, spatial and linguistic distance, as well as cultural differences between buyers and suppliers. Partial remedies include effective joint communications, an open organizational culture, and the fostering of cross-contextual understanding.

Research limitations/implications

– The findings contribute to theory development at the intersection of sustainable and global supply chain management research. They help to explain why scarce sustainability-related progress in global supply chains has occurred in recent years.

Practical implications

– The identified barriers facilitate managerial decision making that will expedite SDS progress in global contexts.

Social implications

– By diffusing knowledge regarding available remedies, the study contributes to improving SDS effectiveness, thereby fostering sustainability capabilities and performance of suppliers.

Originality/value

– This research highlights the criticality of contextual barriers to SDS. The barrier effects that stem from differing real-world conceptions of sustainability may inform future sustainable supply chain management research within and beyond SDS.

Consistency of strategic and tactical benchmarking performance measures

Purpose

– The purpose of this paper is to examine the consistency of benchmarking performance measures and to investigate the impact of organizational size and managerial positions on the deployment of strategic and tactical benchmarking performance measures.

Design/methodology/approach

– A set of eight hypotheses was used to examine the consistency of the benchmarking performance measures and the impact of organizational size and managerial positions on selection of strategic and tactical benchmarking performance measures. A questionnaire-based survey data were used to test the hypotheses. The target population was manufacturing firms in Midwestern USA; the sample covers organizations in a variety of industries. Out of 91 completed surveys received, 84 surveys were usable resulting in a response rate of 17 percent.

Findings

– The paper found evidence of misalignment between organizational goals and objectives and proactive development of organizational core capabilities. The result also indicates that managers with high-level positions as well as managers from large organizations placed higher emphasis on strategic benchmarking performance measures.

Research limitations/implications

– Research is general and not industry specific.

Practical implications

– Effective performance measurement is a critical element of organizational success. It requires a thorough understanding of organizational strategy and deployment of the strategy into consistent sub-strategies.

Originality/value

– For effective benchmarking, managers must develop a complete understanding of their own business strategy and choose long-term and short-term benchmarking performance measures that are consistent with organizational strategy.

The links between just-in-time practices and alignment of benchmarking performance measures

Purpose

– The purpose of this paper is to examine if there are links between just-in-time (JIT) practices and consistency of benchmarking performance measures at various levels of organization.

Design/methodology/approach

– A set of ten hypotheses were used to examine the differences between traditional and JIT organizations in the effectiveness of benchmarking performance measures. A questionnaire-based survey data were used to test the hypotheses. The target population was manufacturing firms in Midwestern US; the sample covers organizations in a variety of industries. Out of 91 completed surveys received, 84 surveys were usable resulting in a response rate of 17 per cent. Out of 84 usable surveys, 33 organizations were grouped as JIT and 51 as traditional organizations.

Findings

– JIT organizations are better in recognizing external environmental factors, developing organizational core competencies, building learning organization through knowledge workforce, and using a broad and balanced mix of performance measures that are consistent with organizational strategy.

Research limitations/implications

– Research is general and not industry specific.

Practical implications

– Effective performance measurement is a critical element of organizational success. It requires a thorough understanding of organizational strategy and deployment of the strategy into consistent sub-strategies and action plans.

Originality/value

– The benefits of JIT principles go beyond inventory management. These principles can be applied to other areas such as effective performance measurement.