In modern business management, companies have no longer competed as single firms but within supply chains, in which the role of suppliers has changed from simple suppliers to strategic partners. Supplier development has become a viable supply chain management practice across industries, as firms continue to focus on their core competencies and outsource other activities.
Numerous research papers on supplier development have been done during recent decades. Most of studies focused on manufacturing sectors such as automotive, electronics, oil & gas or cross manufacturing industries. As the nature of these sectors, the clients are usually big corporations that have the significant dominance over the suppliers in the industries. In other words, supplier development is more likely the game only for big corporations.
However, practical knowledge of supplier development applied to large firms is not necessarily applicable to SMEs. When both the client and suppliers are small, the power balance between them is not asymmetric. Both parties may have equal contributions and decision power on supplier development process. This paper, based on the results of a successful case study of supplier development in IT outsourcing sector, sheds light on how SMEs can properly select and develop their small suppliers.
Nguyen, T.; U. Dornberger (2021): Guidelines for SME Supplier Selection and Development: The Practice of SMEs in Information Technology Outsorcing Sector. SEPT Working Paper Series No. 29 (Technical Paper), Leipzig University, 2021. Download