Supplier development practices: an exploratory study

Purpose - Seeks to provide a more differentiated view of supplier development activities currently applied by European firms. Design/methodology/approach - An exploratory empirical study was conducted based on a review of previously published research on supplier development and case studies with 12 industrial firms. The survey responses from 173 firms were factor-analyzed to explore various dimensions of supplier development and their interrelationships. Furthermore, an industry-level analysis was performed. Findings - Firms are reluctant to develop suppliers. Two dimensions of direct and four dimensions of indirect supplier development were observed. Providing human and capital support to suppliers (i.e. two dimensions of direct supplier development) is strongly related to formal supplier evaluation, structures and processes for evaluating suppliers as well as communication (i.e. three dimensions of indirect supplier development). Research limitations/implications - Future studies should incorporate the perspective of the supplier firm, include small and medium-sized enterprises, and approach pressing questions related to performance implications for the buying firm and sharing of the benefits achieved in supplier development activities. Practical implications - Firms can compare their approach towards various supplier development practices with the approach taken by a representative sample and their industry as a whole. Originality/value - The paper conducts new research in a European setting. Furthermore, a novel industry-level view is presented.