The Supplier Development Program: A Conceptual Model

Abstract

In order to compete effectively in the world market, a company must have a network of competent suppliers. A supplier development program is designed to create and maintain such a network—and to improve various supplier capabilities that are necessary for the buying organization to meet its increasing competitive challenges. This article details a conceptual model that describes the organizational decision process associated with a supplier development program. The proposed decision model can serve as a guideline for designing a supplier development program that can link purchasing strategy with a firm's overall corporate competitive strategy. Empirical evidence drawn from the experience of several companies actively involved with such a program is used to validate the model.