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Supplier Development Practices: Product‐ and Service‐Based Industry Comparisons
Author(s) -
Krause Daniel R.,
Scannell Thomas V.
Publication year - 2002
Publication title -
journal of supply chain management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.75
H-Index - 92
eISSN - 1745-493X
pISSN - 1523-2409
DOI - 10.1111/j.1745-493x.2002.tb00125.x
Subject(s) - business , outsourcing , incentive , industrial organization , supplier relationship management , service (business) , new product development , product (mathematics) , supply chain , marketing , core competency , supply chain management , economics , microeconomics , geometry , mathematics
SUMMARY Supplier development has become a viable supply chain management practice across industries as firms continue to focus on their core competencies and outsource a significant percentage of the costs of goods sold. Supplier development practices used by buying firms include formal supplier assessment and feedback, supplier incentives, competitive pressure, and direct involvement improving performance through activities such as training and investment. Although it is apparent that such strategies and processes are used to some extent across industries, it is unclear if there are differences in supplier development approaches between product‐ and service‐based firms. The findings indicate that service firms tend to rely on the competitive pressure of market forces to instigate supplier performance to a greater extent than product‐based firms and that productbased firms tend to use assessment, incentives, and direct involvement to a greater extent than service firms.