Strategic Partnership within Supply Chain

University essay from Blekinge Tekniska Högskola/Sektionen för management


Background and Problem Discussion: One of the widespread conclusions in supply chain management research is that huge benefits can be achieved if suppliers are involved in the OEM’s product development process as early as possible, since suppliers often possess vital product and process technology leading to significant improvements in product design and new product development process. The issue is a need for a model of supplier selection to support the contribution of suppliers in product development processes; whilst supplier attributes or performance metrics for traditional supplier selection do not seem to include specifications that are usually required in close relationships. What practitioners need in practice, is a simple-to-use methodology with producing logically precise results. Purpose: The purpose of this study is developing a model of supplier selection to support the contribution of suppliers in product development processes, and eventually, developing a strategically integrated supply base for Volvo Powertrain Corporation (VPT). Among the first part of this study, a model of supplier evaluation and selection has been developed, considering attributes and success factors for integration with suppliers, and also examined in VPT with the aims of achieving mutual success in both products and commerce for VPT, as the focal company, and its supply chain members. The second part of this study presents a model to boosting the integrated partnership established on the basis of the first part endeavour. Theory: The first part covers the theories emerges from a large number of stochastic studies concerning hypotheses proofing of relations between diverse aspects of hypothetical influential characteristics of partnerships and its performance. And the second part deals with theory of suppliers association. Analysis: Collected data from suppliers of VPT as well as practitioners is analysed and compared with the academic studies in the first part. Second part, however, deals only with theory since it needs more time and effort which is proposed as prospect studies. Conclusion: The conducted survey shows that two-way communication (or multi-way in more developed situations) and mutual trust are the most vital elements to partnership survival. It has been presented in this effort, and suggested to VPT, that the best practice in this respect is developing the supplier association in a framework of Plan-Do-Check-Act cycle (PDCA) constituted of key suppliers for a particular system and /or subsystem.

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