Supplier development: communication approaches,
activities and goals
Operations managers rely on the purchasing function to obtain production inputs
from suppliers and to ensure supplier performance. The link between supplier
development activities performed by buying firms with their suppliers, in terms
of operational outcomes and impact on competitive advantage for the buying
firm has been well documented. However, a buying firm should, prior to setting
up a supplier development program and investing in supplier development
activities, establish goals it wants to achieve and determine how to achieve these
goals. Until now, supplier development goals in general and their relationship
with supplier development activities have received little research attention. The
results from this empirical study suggest that the relationship between the goal
to improve a supplier’s capabilities and knowledge transfer from the buyer to the
supplier firm is moderated by the degree of human interaction. Buying
firms pursuing the strategy to improve supplier capabilities rely more intensively
on training and co-location of buyer and supplier employees to leverage the
knowledge transfer to the supplier firm.