Supplier development: How to improve suppliers order-to delivery and learn from supplier integration

University essay from Mälardalens högskola/Innovation och produktrealisering

Author: Sara Fröjd; [2021]

Keywords: ;

Abstract: Introduction Companies that fail to integrate important suppliers are risking omitting meaningful collaborations and consequently lose market advantages. However, developing a relationship towards an integrated collaboration includes complex components in a buyer-supplier relationship that creates a higher interdependence between firms. Supplier integration has been identified to improve the performance of efficiency and effectiveness of both material and information flows between manufacturer and suppliers. One measurement of operational performance is Order to delivery (OTD) which is of utmost importance when managing the supply chain. The OTD process is a complex metric system but nonetheless one of the most important processes to manage from a logistic perspective. It is therefore important to investigate from different perspectives how supplier integration can be improved and raise the supplier's ability to deliver according to OTD. Thus, this project's aim was to examine the supplier-buyer relationship in a manufacturing environment and the related development work that can improve a company's collaboration and OTD performance. ➢ RQ1: What are the critical factors in supplier integration to improve the supplier-buyer relationship? ➢ RQ2: How can companies work to improve their suppliers' ability to reach an acceptable level of order-to-delivery (OTD)? Methodology The area of supplier development was investigated through a literature review to provide previous research and context. A multiple case study was performed at Alpha within three supplier integration cases to gain a meaningful real-world perspective of the area. Semi-structured interviews and qualitative surveys have been used in themes to collect data from Alpha and its external partners. The analysis was later performed by finding patterns and similarities between the empirical findings and the literature review. Frame of Reference To gain a general understanding of supplier development were a literature review was performed, which include relationships, supplier integration, performance, lean, and power balances. Empirical findings The empirical findings provided an overview of three perspectives within supplier integration which include the buyer, integrated suppliers, and a future supplier. Also, it provides an internal insight within Alpha on how processes can differ internally when handling OTD. Analysis and discussion The literature review and the empirical findings were compared, analyzed, and discussed to find potential critical factors of supplier integration. Additionally, the analysis and discussion contribute to the supplier development word regarding OTD. Conclusions Critical factors within supplier integration to improve supplier-buyer relationships include lean culture, dedication, person-specific, and handovers. For companies to evaluate OTD is measurement vital. Additionally, onboarding activities, assistance, prioritization, and forecasts are important to help suppliers handle fluctuations.

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