Supplier Development: Practices and Critical Factors : A Dyadic Multiple-case Study

Abstract: Background:  As enterprises focus on their core competence, outsourcing other activities other firms can do better, the necessity of managing supplier relationships and upgrading the inter-firm relationships become evident. Supplier development as a potential attempt, tries to fill the gap between ideal criteria and the particular suppliers’ actual capabilities and performance in the supply chain. The buying firms initiate the supplier development efforts in order to increase their abilities to create and deliver a superior value to their own customers. In this respect, it is essential to investigate the practices and story of what the buyer and the supplier do in relation to supplier development and what factors contribute to the success of the program and benefits of the dyad. Furthermore, acknowledgment of difficulties that might bring failure in the SD should be taken into consideration so as to possibly avoid them. The supplier development is widely neglected a dyadic view in literature review. The importance of this study is adding the supplier’s standpoint to the buyer’s view in order to achieve the dyadic perspective associated with the practices, the success factors and the barriers. Purpose: This research aims to identify and describe the practices of supplier development in buyer-supplier dyads. The success factors of the supplier development program and the barriers to the supplier development programs are also investigated based on the buying and supplying firms’ perspectives. The main goal is to contribute to a better understanding of the supplier development from a dyadic standpoint. Method: This study is conducted from an interpretivism standpoint with the use of a deductive approach and qualitative strategy. A holistic multiple-case study of two plastic manufacturing firms as the buyers and their three main suppliers (three dyads) is applied in Iran. The empirical data is gathered via 6 different semi-structured interviews. The empirical evidence is analyzed by using within-case, cross-case and pattern matching analysis. The study considers the ethical issues; harm to participant, informed consents, invasion privacy and deception. The research quality is based upon trustworthiness and authenticity.   Result, conclusion: Thanks to within-case analysis which generates the dyadic view with respect to practices, success factors and barriers to supplier development, amazing result is achieved that rarely mentioned by the previous research. A number of conflicting views between the buying firm and the supplier is found due to dyadic investigation which demonstrates the gaps between the buyer and supplier’s perceptions in dyadic relationship. The dyads are simultaneously involved in both direct and indirect supplier development practices. Based on the level of buying firm’s involvement in supplier development activities, the dyads partially follow the degree of sequence from low, moderate to high involvement levels. Each dyad can eliminate or keep the lower level of buyer’s involvement activities when they start the moderate and high level of buyer’s involvement practices. However, the specific position cannot be identified for a particular dyad and the supplier development activities are scattered in all three levels. Based on the dyadic standpoint, the factors that contribute to success of the supplier development program in each dyad can be seen as buyer-, supplier-specific and interface success factors. In this regards, this dyadic multiple-case study confirms the reviewed literature associated with success factors and finds supplier’s top management support and previous supplier development experiences as the additional factors in supplier-specific area that contributes to the successful inter-firm relationship and the supplier development that are not pinpointed by the previous studies. Barriers to the supplier development are factors which hinder the success of the supplier development program. According to the literature review, the barriers could be divided into buyer-, supplier- specific as well as buyer-supplier interface barriers. This study partially confirms the previous studies and reveals some surprising results. One of the most useful findings of the research is that only one barrier in buyer-specific category is verified by one of the dyadic cases. However, in addition to identified barriers, lack of supplier’s top management support and supplier’s indolence are seen as the supplementary supplier-specific barriers to the supplier development. Interestingly, there are other types of barriers that cannot be found in the previous research which is categorized as context barriers. This type includes those kinds of barriers that are originated in the context of relationship in a dyad.