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An empirical investigation of supplier development: reactive and strategic processes
Author(s) -
Krause Daniel R.,
Handfield Robert B.,
Scannell Thomas V.
Publication year - 1998
Publication title -
journal of operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.649
H-Index - 191
eISSN - 1873-1317
pISSN - 0272-6963
DOI - 10.1016/s0272-6963(98)00030-8
Subject(s) - business , competitive advantage , supply chain , outsourcing , supplier relationship management , core competency , industrial organization , supply chain management , strategic sourcing , process (computing) , marketing , process management , strategic planning , computer science , strategic financial management , operating system
As firms continue to focus on core competencies and outsource non‐core products and services to external suppliers, supply chain management is increasingly viewed as a source of competitive advantage. However, if the supply chain is to be a source of competitive advantage, suppliers' performance must be managed and developed to meet the needs of the buying firm. In an exploratory study based on data collected from 84 companies, the authors develop a process model for supplier development. Using this process model as a framework, the authors then compare two approaches buying firms use in supplier development: (1) reactive efforts to increase the performance of laggard suppliers, and (2) strategic efforts to increase the capabilities of the supply base to enhance the buying firm's long‐term competitive advantage. Strategic efforts were found to significantly increase the buying company's involvement in suppliers' processes, and required greater dedication of resources, personnel and communication.