Supplier management in a manufacturing environment

Sameer Kumar, Anthony C. Clemens and Ethan W. Keller

International Journal of Productivity and Performance Management, 2014, vol. 63, issue 1, 127-138

Abstract: Purpose - – Managing a supplier base can be both challenging and rewarding. Instances abound where the lack of attention to supplier management has caused once successful businesses great losses or even failures. Assessing a supply base using the combined approach of discrete choice analysis (DCA) and total cost of ownership (TCO) can help a company determine the necessary features required to alleviate the strain caused by doing business with poorly managed companies. The paper aims to discuss these issues. Design/methodology/approach - – By combining a company's DCA with their TCO, manufacturing companies can create a strategically focussed scorecard that aligns their supplier requirements with high-performing companies. During the analysis, the paper chose to analyze an appliance manufacturer. Findings - – As a result of the analysis, it was determined that a specific supplier that was labeled as strategic, should actually be considered for elimination. While this analysis can be extremely effective, three main limitations within the research do exist. First, the lack of alignment of DCA with the strategic business initiatives within each unit of a company can adversely affect its financial success. Second, implications for management which include all data used in the analysis through all three stages – identify and classify, consolidate, and maintain supplier base – must be up-to-date. Finally, trade-offs must be accepted as a means of doing business with a supplier. Originality/value - – After reading this study, sourcing managers should realize the potential for aligning and managing their supplier base with the strategy of the company to assure a profitable future.

Keywords: Discrete choice analysis; Total cost of ownership; Supplier performance scorecard; Supplier classification; Supply base consolidation; Strategic sourcing (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijppmp:v:63:y:2014:i:1:p:127-138

DOI: 10.1108/IJPPM-12-2012-0137

Access Statistics for this article

International Journal of Productivity and Performance Management is currently edited by Dr Luisa Huatuco and Dr Nicky Shaw

More articles in International Journal of Productivity and Performance Management from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().