CORRELATIONAL STUDY OF ORGANIZATIONAL FACTORS THAT INFLUENCE SUPPLIER DEVELOPMENT: A BUYER FIRM’S PERSPECTIVE By John Charles Novak

A Dissertation Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Management in Organizational Leadership

UNIVERSITY OF PHOENIX August 2008

3337535 Copyright 2008 by Novak, John Charles All rights reserved

2008

3337535

© August, 2008 by John C. Novak ALL RIGHTS RESERVED

27 in delivery. Perhaps the most significant finding is that buying firms cannot focus on only one factor to drive improvements. and supplier development engineers’ presence at the supplier location to achieve acceptable results. (b) understanding of goals. cost. (c) supplier participation. The factors were generally shown to have medium to low positive correlation with the results achieved from the supplier development projects. (d) supplier leadership attitude. suppliers are not performing adequately to organizations expectations. 43 in quality. Thus. The purpose of this quantitative research study was to analyze the relationship between the independent variables of (a) information exchange. and (f) supplier dependence on buying firm and the dependent variable of supplier development results in quality. supply chain professionals who have a process that focuses on these factors may produce desired results from supplier development projects. Collectively the factors were shown to be significant in relationship to the supplier development results. suppliers’ leadership attitude. and 18 in technology. The study indicates the importance of information exchange. delivery. and technology advancement. 35 in cost. (e) coordinator presence. Forty-two supply chain professionals were survey with 29 responding with survey data related. .ABSTRACT Despite a thorough and deliberate supplier selection process. multifunctional participation.

I would like to acknowledge and thank the leadership of the firm from which the research was conducted for their contribution to the advancement of supply chain leadership. Thanks! . There were times that I needed your support and I always knew I could count on you. the professional advice from leaders in the supply chain research such as Dr. I would also like to thank Dr. Second.iv ACKNOWLEDGMENTS When I first started the doctoral program. Robert Kemp was invaluable to define the project and evaluate the survey instrument. First. I had no idea how much it would challenge me to grow as well as the level of dedication and support it would take to finish. I would like to thank a few individuals that supported me. Kim for supporting me through this process and more. Robert Handfield and Dr. Taking the time to fill out a survey is a gift that the researcher cherishes. I truly could not have done this without the love and understanding you have always provided. In addition. for the continuous support and guidance provided. The support received was instrumental for me to successfully complete the doctoral program. I would like to thank the many participants that provided information for the research. I truly am humbled by the support from all of you and only hope I can help others. I would like to thank my wife. Frederick Lawrence. I will forever be indebted for you contribution. thanks to others such as Dr. Research could not be conducted without participants. I personally want to thank you for your contribution to the advancement of supply chain management. April Collett for providing mentorship throughout the process. Without the support of my family it would not have been possible to focus on such a challenge. Margaret Latonio and Dr. Finally.

............................................................................................................................................. 12 Theoretical Framework............................................................................................................................................................................................................................................................................................................... 24 Assumptions.................................................................................................................................................................................................................................................................... 33 Rationale for Supplier Development .................................................................................................................. 27 Limitations .................... 33 Literature Review................ 36 ................... 30 Summary ..........................................................................................................................................v TABLE OF CONTENTS LIST OF TABLES................................... 10 Hypotheses.......................................... 23 Definition of Terms..................................................................................................... 2 Statement of the Problem.............. 6 Significance of the Problem................................... 30 CHAPTER 2: REVIEW OF THE LITERATURE ......................................................... 19 Independent and Dependent Variables .... 34 Supplier Development ..................................................................................................... 35 Supplier Development Steps............. x LIST OF FIGURES ...................................................................................................... 29 Delimitations............... 5 Purpose of the Study .......................................... 8 Research Questions............................................................................................................................................................................................................................... 7 Nature of the Study ..........xii CHAPTER 1: INTRODUCTION ......................... 1 Background of the Problem ..............................................................................................

.............vi Research in Supplier Development........................................................................................................................................................................................................................................................................................................................................................................................................ 88 Summary ......... 69 Population and Sampling Frame................................................................................ Confidentiality........................................................................................... and Instrumentation ......................... 66 Research Design................ 76 Validity........................ Reliability... 61 Summary ..................... 74 Geographic Location.... 72 Informed Consent........................................................................................ 62 CHAPTER 3: METHOD ........................................................................................................................................................................................................................................................................................................................................................................................................ 42 Supply Chain Management.............................................. 50 Research Variables.................................................................................. 52 Information Exchange ................. 52 Understanding of Goals .................................................. 56 Coordinator’s Presence................. 68 Research Questions and Hypotheses ...................................................................................... 60 Conclusion ......... 58 Supplier Leadership Attitude. 81 Pilot Study and the Validity and Reliability of Survey Instrument .......................................... 54 Level of Supplier Participation...................................................... and Data Collection .... 67 Appropriateness of Design .............. 75 Data Analysis .................................... 66 Appropriateness of Method .................................................................................. 90 ............................... 59 Dependency on Buying Firm....................................................................

........................................................ 159 Correlation of Supplier Development Results With the Level Suppliers’ Leadership Attitude ..... 102 Data Analysis of Each Study Variable.vii CHAPTER 4: RESULTS... 109 Delivery ............................... 99 Measurement of Data............................................................................. Sample Selection......................................................................................................................................................................................................... 101 Research Questions and Hypotheses ................................................................................................................................................... 141 Summary .......................................................... 97 Summary of Results Achieved From Supplier Development Projects............................................. 157 Correlation of Supplier Development Results With the Level of Participation of the Supplier Organization......................................................................................................... 160 ...................... 151 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS....................... 92 Population........................................................................................................................ 156 Correlation of Supplier Development Results With the Level of Suppliers’ Understanding of Goals ....................... 130 Technology .............................. 153 Correlation of Supplier Development Results With the Level of Information Exchange........ 120 Cost ................................................................................ and Demographics ................................................................................................................................................................... 153 Overview of the Research............... 108 Quality ......................................................................................................................................................................................... 94 Data Collection ..................... 105 Testing of Research Questions and Hypotheses ..................................

........ 193 APPENDIX F: ANOVA TABLE (QUALITY).......................... 173 Concluding Comments................................................................................................................... 162 Correlation of Supplier Development Results With the Level of Suppliers’ Dependence on Buying Firm ............. 165 Implications of the Study for Theory and Practice ........................................................... AND/OR SUBJECT OF FACILITY.... 176 REFERENCES ......................................... 171 Limitations of the Research ..................................................................................... UNIVERSITY INSTITUTION OR ASSOCIATION ... PARTICIPATION 18 YEARS OF AGE AND OLDER ................. 164 Correlation of Supplier Development Results With the Level of the Collective Variables Identified in Hypotheses 1-6............................ 191 APPENDIX D: INFORMED CONSENT........... 177 APPENDIX A: PERMISSION TO USE PREMISES................................................................................................................... PARTICIPANT 18 YEARS OF AGE AND OLDER (SURVEY)………………………………………………………….......................................................... 168 Recommendations for Organizations.......................................................................... NAME..........................192 APPENDIX E: SUPPLIER DEVELOPMENT SURVEY ...........viii Correlation of Supplier Development Results With the Level of Assignment of Supplier Development Coordinator........................................................... ORGANIZATION........................................................... 197 .......... 190 APPENDIX C: PRE-NOTIFICATION SURVEY LETTER ........................................ 188 APPENDIX B: INFORMED CONSENT..................... 197 APPENDIX G: t-TEST TABLE...................................................... 172 Future Research Opportunities .............................

..... 204 ....................ix APPENDIX H: ANOVA TABLE (DELIVERY).................................... 202 APPENDIX J: ANOVA TABLE (TECHNOLOGY)......... 200 APPENDIX I: ANOVA TABLE (COST) .......................................................................

.........................................78 Table 4 Dependent Variables With Data Level and Scale.. Direction of Correlation.................................................. and Strength of Relationship With Cost Focused Supplier Development Projects............ and Number of Questions................................................................................................................. and Strength of Relationship With Quality-Focused Supplier Development Projects............131 Table 15 Table of Variables......................... Direction of Correlation.............110 Table 11 Table of Variables.............. and Interpretation ..............125 Table 14 Correlation Coefficients Matrix for Supplier Development Projects Focused on Cost......x LIST OF TABLES Table 1 Summary of the Qualitative Research on Supplier Development................................................................................................................................80 Table 6 Scale Related to Level of Information Exchange...........................136 .................................................85 Table 8 Scale Related to Level of Understanding of Suppliers Leadership Attitude.......................... p Value.............................................................................................86 Table 9 Independent Variables with Data Level.........................48 Table 2 Summary of the Quantitative Research on Supplier Development.. Scale........79 Table 5 Modified Table to Show the Triola............... and Strength of Relationship with Delivery Focused Supplier Development Projects ..84 Table 7 Scale Related to Level of Understanding of Goals .....................115 Table 12 Correlation Coefficients Matrix for Supplier Development Projects Focused on Delivery ..............106 Table 10 Correlation Coefficients Matrix for Supplier Development Projects Focused on Quality ................................120 Table 13 Table of Variables.............. Direction of Correlation...49 Table 3 Independent Variables With Data Level and Scale .......................

...............146 Table 18 Summary Table Showing the Correlation Results of Direction for Strength and Direction in Relation to the Studied Independent Variables........................................................162 Table 24 Summary Table of Hypothesis H5 ...........167 .......................157 Table 21 Summary Table of Hypothesis H2 .....................................166 Table 26 Summary Table of Hypothesis H7 .......155 Table 20 Summary Table of Hypothesis H1 ............157 Table 22 Summary Table of Hypothesis H3 ...xi Table 16 Correlation Coefficients Matrix for Supplier Development Projects Focused on Technology ............................ and Strength of Relationship With Technology-Focused Supplier Development Projects ................141 Table 17 Table of Variables......................................................................................164 Table 25 Summary Table of Hypothesis H6 ......................................................................................................................................................................................................................160 Table 23 Summary Table of Hypothesis H4 ............................................................. Direction of Correlation.............................151 Table 19 Summary Table Showing Research Questions.........................................................

..112 Figure 16...................................... .................... Level of supplier participation versus quality improvement....98 Figure 7............................ Level of supplier leadership’s attitude versus quality improvement......... ............101 Figure 11............................................ Level of supplier information exchange versus quality improvement.. .....................................38 Figure 3.......113 Figure 17................ Number of surveys submitted per supplier development engineer......111 Figure 14........... ................................................. Supplier quality and development business priority.............. Supplier development research model of independent and dependent variables...............................112 Figure 15................ ..... Hypotheses of positive correlation of independent to dependent variables............ ....................99 Figure 8..... Level of supplier dependence on buying firm versus quality improvement.........68 Figure 4.................................... Number of projects per purchase part area....95 Figure 5......... ........ Cost improvement results from supplier development projects.......... Level of supplier development coordinator’s presence versus quality improvement......................... Supplier development projects focused on technology.........................113 ........................................ Number of surveys versus suppliers annual sales in the research data... Model of factors influencing supplier development results.... ..................................................109 Figure 12....100 Figure 9........... Level of supplier understanding of goals versus quality improvement....... . .... Results of supplier development project focused on delivery........ .24 Figure 2...............111 Figure 13............................................................... First-time-quality improvement from supplier development projects........................................xii LIST OF FIGURES Figure 1.........................96 Figure 6.100 Figure 10.

................................................................................. ..................................134 Figure 30........ Level of supplier dependence on buying firm versus delivery improvement............ Level of participation versus delivery improvement.................................................................................................xiii Figure 18..................... Level of supplier information exchange versus delivery improvement...134 Figure 29....... Level of supplier dependence on buying firm versus cost percentage improvement.......................... ....... ................ Level of supplier leadership attitude versus percentage cost improvement....................... Level of supplier development coordinator’s presence versus percentage cost improvement........ ............................121 Figure 19.. Level of supplier leadership’s attitude versus delivery improvement...............122 Figure 20................. ....................................................123 Figure 22................122 Figure 21....................................................143 ...................................................... ................... ................................. Level of participation versus percentage cost improvement..... ...........................132 Figure 25................................................. ........132 Figure 26..................... ....142 Figure 31........................................ ..................... Level of supplier understanding of goals versus delivery improvement......... Level of supplier information exchange versus percentage cost improvement............ Level of supplier information exchange versus technology success..133 Figure 27.... Level of supplier understanding of goals versus percentage cost improvement...... Level of supplier development coordinator’s presence versus delivery improvement........................................133 Figure 28.................. ....................123 Figure 23........................ Level of supplier understanding of goals versus technology success..........................124 Figure 24...............................................................................................................

.145 .............. Level of supplier development coordinator’s presence versus technology success....... Level of supplier dependence on buying firm and technology improvement success...............143 Figure 33............................ Level of participation versus technology success............................................... Level of supplier’s leadership’s attitude versus technology success............ ............................. .144 Figure 34..............................................144 Figure 35..................xiv Figure 32......... ...............................

2003. & Starling. 787). p. Ogden. p. 2). including minimal activities such as communication through supplier scorecards and . Based on this definition. & Monczka. Kwon and Suh (2004) noted a lack of trust may result in higher transactional costs due to increased examination and verification of contractual activities. Lack of trust between a supplier and customer can often result in ineffective performance (Chu & Fang. The advancement and increasing importance of the purchasing role is attributed to the widely recognized contribution of supply professionals to the competitiveness of the buying firm (Burt. Carter. Numerous qualitative and quantitative research studies have supported the role of supply chain leadership in supplier development success. 1995). For the purpose of the current research. 2000. Dobler. “The relationship between the corporation and its suppliers is very important and can be regarded as an intangible and agile asset of the corporation” (Lee & Yang. This research advanced the body of knowledge in supply chain management by analyzing organizational factors that may influence the success of supplier development programs. 2000.1 CHAPTER 1: INTRODUCTION Since the 1980s. 2006). many firms have experienced a transformation in the role of the purchasing function from a business that executes transactions to one that leads supplier selection and manages the supplier network (Krause. “supplier development was defined as the transfer of resources for the purpose of improving the suppliers’ performance and capabilities” (Easton. 2005). supplier development includes any activity or resource the buying firm deploys to improve the performance of suppliers. Kwon and Suh posited that value-added activities such as supplier development approaches have become difficult to execute. Peterson.

as well as the escalation of commodity costs such as steel. 2006. limitations. crude oil. long-term projects. research questions. and employee exchanges focused on knowledge transfer (Burt et al. it would be a fatal mistake if companies were to neglect the potential of supplier development practices” (Wagner. Chapter 1 concludes with a discussion of the pertinent aspects of the research study. Chapter 1 introduces the problem of a lack of understanding of the variables that contribute to successful supplier development efforts and the need to analyze factors in relation to supplier development results. 2003). and assumptions. and delimitations. “With suppliers making a significant contribution to a company’s competitive position. independent and dependent variables. The current research involved an examination of the relationship between factors related to supplier development and the results of the activity from the buying firm’s perspective. Specifically the chapter includes the background of the problem. and precious metals. p. statement of the problem.. providing training. nature of the study. theoretical framework. significance of the problem. and short-term workshops or kaizen activities (improvement workshops) and then advancing to more extensive activities such as joint development activities. Background of the Problem With the turbulent times that extensive global competition brings. purpose of the study.2 other supplier feedback processes to more moderate activities such as on-site assessments. resin. hypotheses. many firms have transformed their traditional purchasing organizations with a focus on price to purchasing organizations with a focus on supply management to create a competitive . 566). definition of terms.

. which indicated a long history of focus on supplier development by the Toyota organization. Krause. management in Japan adopted an approach that viewed the manufacturing process as a system with a focus on quality. and Honda. Monczka et al. many organizations have seen a transformation of the role of purchasing from simply issuing purchase orders to managing and developing world-class suppliers (Burt et al. 2003. 2003). 1995. Nissan. Deming posited that buying and supplier organizations should work together to reduce the level of defects seen by the purchaser through cooperative methods. 2003). 1995. Following Toyota. and training courses to core supplier employees (Sako. 2004). 2003. . At Toyota. 2002). In the 1950s. “The evolution of the purchasing function’s importance within the organization and the evolution of the buyer-supplier relationship have occurred.. The transformation requires a paradigm shift in thinking from one that is purely transactional to a relationship where the buying firms’ leadership and selling firms’ leadership have a sincere desire to enhance each other’s interest (Burt et al. with only recent emphasis by manufacturers in the United States (Burt et al. 1982). In 1939. Krause. and Honda’s lead. supplier development has been taken for granted for several decades. Trent. 2004). Monczka. Nissan. including the evaluation of purchased materials to improve an organization’s ability to provide jobs (Deming. Sako). in part. Movement to transformational approach has led to fewer suppliers in the supply chain characterized by longer term relationships (Burt et al. 2003.. 2002). Toyota demonstrated commitment to supplier development by opening lectures.3 advantage (Burt et al. & Handfield.. Toyota management adopted a supplier development philosophy that viewed suppliers as part of the Toyota family (Sako. seminars...

p. which included support of top leadership. and effective communication. and a high level of supplier dependence on the customer contributed to successful supplier development approaches. In an empirical study on one large company with an established supplier development program. Handfield. and Monczka (2000) noted firms can avoid the pitfalls of poor supplier development results by conducting meetings with the buyers and supplier teams. defining key projects. Activities range from nominal support to full-time staffs leading the supplier development activities (Krause). Research by Krause and Ellram (1997) indicated satisfactory supplier development results correlated with firms with a philosophy of expecting improved supplier performance and the willingness to devote resources to the effort. Heide and George (1990) noted supplier development programs were more prevalent than expected at the time and also identified the element of formal supplier evaluation as the key to success. Krause (1995) identified antecedent variables to successful supplier development processes. an understanding of the factors associated with successful supplier development results may be of importance. suppliers’ appointment of a coordinator for the supplier development effort. Easton (2000) revealed that significant factors such as the suppliers’ positive attitude. Research on factors that influence successful supplier development results may be of importance to buying firms’ leadership of supply management. Scannell. 1). Krause.4 because buying firms increasingly recognize the potential contribution of their suppliers’ performance to their own competitive position” (Krause. . If organizations are to effectively use resources devoted to supplier development activities. cross-functional involvement. and monitoring project results.

and advancements in technology (Fugate. develop the manufacturing capabilities internally. When faced with a poorly performing supplier. cost reductions. Krause.S. known as supplier development. Previous research in supplier development primarily focused on case study analysis with limited empirical focus (Sanchez-Rodriguez.5 Monczka et al. Doolen. and technology advancements (Burt et al. and McBride (2006) noted. firms may choose to resource the product or service to an alternative supplier. improved quality and delivery performance. “Although having good supplier performance is important. Effective supply chain leadership is important to the organization and society because it may lead to lower total cost. Traxler. manufacturing companies continue to struggle with supplier management” (p. 2003. The chain may be referred to as dirt to customer. 2000. surveys show that U. or assist the supplier to develop the capabilities to perform at an acceptable level (Burt et al. 26). .. Statement of the Problem Despite a thorough and deliberate supplier selection process. Easton. 1995). 2006). time delays in delivery. 2006). Poor supplier performance could result in unnecessary design changes. referring to the extracting phase of taking product from the earth and then processing it until it is in its intended form for the final customer. Sahin.. & Mentzer. many suppliers are not performing adequately in the areas of quality. increased cost. (2002) described how the supply chain encompasses all actions connected with the stream and transformation of products or services from the raw material stage (extract from Mother Earth) through to the end-buyer. and poor quality (Lo & Yeung. delivery. The premise of the current research was that the buying firm has chosen to assist the supplier to improve the capabilities to perform at an acceptable level. 2003).

and technology resulting in improved value propositions for the buying firm (Burt et al.. 2003). cost. and (f) supplier dependence on buying firm and the dependent variable of supplier development results in quality. 2000. delivery. and . delivery. and technology advancement. delivery. (e) coordinator presence. (c) supplier participation. 2). “Purchasing can and should take a lead role in supplier development to ensure that the links between supply chain members are productive and rewarding” (Easton. cost. (d) supplier leadership attitude. This multiple linear regression research study expands the body of knowledge in supply chain management by testing factors that may be associated with successful supplier development results. (b) understanding of goals. p. A lack of understanding of the variables that contribute to successful supplier development efforts may impede the firms’ ability to use invested resources effectively to meet customer requirements. cost. improvements may occur with suppliers in areas such as quality. lead time/cycle time. Purpose of the Study The purpose of the current quantitative research study was to analyze the relationship between the independent variables of (a) information exchange. 2005). Research in the area of supplier development may provide supply chain professionals the knowledge to improve results. & Martinez-Lorente. The data collected in the study may provide supply chain professionals insight into the independent variables and the relationship they may have with supplier development results.6 Hemsworth. When buying firms engage in supplier development activities. A supplier development engineer is an individual assigned to execute a project with a supplier to advance performance in the areas of quality.

Research participants were asked to reflect on their development activities with the supplier firms that have participated in the supplier development activity between January 2005 and February 2008. Supplier development engineers who lacked experience as defined by their supervisor and were acting in an apprentice role were not included in the research... The significance of supplier development is well documented in literature (Sanchez-Rodriguez et al. Engineers could have answered more than one survey based on leading multiple projects with multiple suppliers. Yet. The leadership of the organization participating in the research provided permission (see Appendix A). Participants in the research led supplier development activities with the large automotive component firm. The research involved supplier development engineers and supply chain professionals who have completed supplier development projects from one large automotive component firm. The supplier development engineers answered the survey with a specific supplier development project in mind. new technology adoption. delivery performance. 1997. 2) . 2005). and financial health. many view their supplier’s performance as lacking in the critical areas of quality and cost improvement. 2003). One of the purchasing function’s basic objectives is to maintain a network of capable suppliers. para. (Krause & Ellram.7 technology (Burt et al. Significance of the Problem The significance of the impact of leadership on supplier development lies in the knowledge of which factors may be related to achieving successful supplier development results. The multiple linear regression study involved an examination of the variables to determine if there was a relationship with supplier development results.

Nature of the Study A quantitative approach using a survey instrument with ratio phrase completion and ratio type scales was used to conduct the research.8 By understanding the factors that may contribute to successful supplier development results. a significant contribution was made to supply chain management and organizations seeking to establish or strengthen supplier development processes. “Effective allocation of resources for supplier development programs is often a difficult decision faced by managers” (para. delivery. The quantitative approach was selected after examining qualitative and quantitative research that identified variables that may be associated with successful supplier development results (Dunn & Young. The results may provide the buying firms with the ability to identify best practices that if applied can assist organizations in creating a competitive advantage. Understanding supplier development is important to society because improving supplier performance may result in an organization advancing the ability to provide services and products that are superior in quality. Improving supplier’s performance creates an advantage. resulting in the buying firms’ ability to improve customer value propositions. Talluri. cost. By understanding the relationship of factors that may contribute to successful supplier development programs. and technology. The result of the study expands the body of knowledge on supply chain management and augments past research by analyzing variables from the perspective of a buying firm. 2004. purchasing leadership can develop and deploy processes that achieve intended results. 38). A multiple linear regression analysis study was selected as the preferred method. . and Mendez (2001) noted. Narasimhan.

and technology. Creswell (2003) noted. A correlation study was appropriate. direction. The survey was administered electronically to the supplier development engineer and supply chain professional. and magnitude of the association” (p. cost. “Correlational research seeks the association or relationship between two variables or sets of scores and develops this understanding by exploring the form. and magnitude of association of the factors being studied in relation to supplier development results. (b) delivery. Sanchez-Rodriguez et al. 2002. 2004). In essence. The research was divided into four groups based on the focused results (dependent variable) of the supplier development activity: (a) quality. four research activities were pursued. delivery. as the intent for the research was to test the association or relationship between the independent variables and the dependent variables. The research results indicate differences between the four focused activities that are discussed in chapter 4.. Krause & Scannell. Sako. 2005. The survey collected information from supplier development engineers who had executed supplier development projects between January 2005 and February 2008. The independent variables were analyzed utilizing multiple regression analysis independently and then collectively with the dependent variable in each of the four groups: (a) quality.9 Krause & Ellram. and (d) technology. (c) cost. Multiple linear regression analysis was utilized to determine the form. 366). The entire population of supplier development engineers was targeted with activities led by supplier development engineers executed between January 2005 and February 2008 with a focus on quality. The survey was used to collect data on the independent . (c) cost. Ratio and phrase completion scales were used in the research for the variables. and (d) technology. (b) delivery. 1997. direction.

(b) understanding of goals. Data mining techniques were utilized to identify these values to complete the survey. direction. with the dependent variables including the results achieved through the supplier development activity in the areas of quality. Descriptive data included (a) focus of supplier development project. (c) supplier participation. (d) supplier leadership attitude. (b) category of buy from the supplier. The independent variables included values related to (a) information exchange. and magnitude of the association with the independent variables were analyzed. (c) . (d) region of supplier manufacturing location. (e) buyer firm’s coordinator presence. Correlation and multiple linear regression analysis method was used to analyze the relationship between independent variables (a-f) with the dependent variable data. (c) annual supplier sales. If a relationship did exist. cost and technology development. The supplier development engineers were instructed that if the values for the annual sales and percentage dependent on the buying firm were not known. the information could be left blank on the survey instrument. (b) understanding of goals. Each independent variable was studied individually and then collectively with each dependent variable. delivery. and (f) supplier dependence on buying firm.10 and dependent variables. Research Questions One primary question drove the research: Does a relationship exist between the independent variables of (a) information exchange. The descriptive data were populated by the supplier development engineers utilizing data collected from past completed projects. the form. Correlation and multiple linear regression analysis were applied to the data to determine whether or not correlations existed with the individual factors and then collectively. and (e) supplier development completion date.

(d) leadership attitude. . and technology advancement? The following research questions were investigated through the research: Research Question 1: What relationship does the suppliers’ level of information exchange have with the outcome achieved from a supplier development activity? Research Question 2: What relationship does the suppliers’ level of understanding of the goals have with the outcome achieved from a supplier development activity? Research Question 3: What relationship does the suppliers’ level of participation have with the outcome achieved from a supplier development activity? Research Question 4: What relationship does the suppliers’ leadership attitude have with the outcome achieved from a supplier development activity? Research Question 5: What relationship does the buying firm’s level of presence of a coordinator have with the outcome achieved from a supplier development activity? Research Question 6: What relationship does the suppliers’ level of dependence based on percentage of the suppliers’ sales revenue to the buying firm have with the outcome achieved from a supplier development activity? Research Question 7: What relationship do the level of (a) information exchange. (c) participation. cost. (e) buying firm’s coordinator presence. delivery. and (f) supplier dependence on buying firm collectively have with the outcome achieved from the supplier development activity? The data were analyzed utilizing correlation and multiple regression analysis to determine if variables individually and collectively correlate to the dependent variable.11 supplier participation. (e) coordinator presence. and (f) supplier dependence on buying firm with the dependent variables of supplier development results in quality. (d) supplier leadership attitude. (b) understanding of goals.

. cost. and technology)? Hypotheses Supplier development represents a proactive approach to improving a supplier’s performance (Burt et al. Hahn. 2004. 2003. delivery. cost. H10: There is no relationship between the suppliers’ levels of information exchange and the supplier development outcome in the areas of quality. and technology. cost.. The research provides insight into the following question: Is there a significant relationship between factors related to the supplier development process of (a) information exchange. (b) delivery. cost. Based on a review of previous research. delivery. Sanchez-Rodriguez et al. and technology (Burt et al. Easton. & Kim. Research indicated that firms with a supplier development focus may expect to see improvements in suppliers’ performance in quality. 1990. and (d) technology. 2005). Krause & Ellram.. (c) supplier participation. . 1997. (e) coordinator presence. Dunn & Young. and technology. delivery. the following hypotheses and null hypotheses are offered. H1a: Higher levels of supplying firm information exchange will result in higher levels of supplier development outcome related to quality.12 The research questions were applied in four groups based on the focus of the supplier development activity or project dependent variables related to (a) quality. (b) understanding of goals. (c) cost. 2003). and (f) supplier dependence on buying firm with the dependent variables (supplier development outcome in the areas of quality. delivery. 2000. (d) supplier leadership attitude. Watts.

and technology. cost. and technology. H30: There is no relationship with the suppliers’ level of participation and the supplier development outcome in the areas of quality. delivery. H60: There is no relationship with the suppliers’ level of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) and the supplier development outcome in the areas of quality. H3a: Higher levels of suppliers’ participation will result in higher levels of supplier development outcome in the areas of quality. delivery. delivery. H5a: Higher levels of assignment of a supplier development coordinator by the buying firm will result in higher levels of supplier development outcome in the areas of quality. cost. cost. cost. and technology. delivery. H50: There is no relationship with the level of assignment of a development coordinator from the buying firm and the supplier development outcome in the areas of quality. cost. cost. and technology. and technology. delivery. . H4a: Higher levels of the suppliers’ leadership attitude will result in higher levels of supplier development outcome related to quality. cost.13 H20: There is no relationship between the suppliers’ levels of understanding of the goals and the supplier development outcome in the areas of quality. delivery. and technology. cost. delivery. cost. and technology. and technology. H2a: Higher levels of the suppliers’ understanding of the goals will result in higher levels of supplier development outcome in the areas of quality. delivery. delivery. H40: There is no relationship with the level of suppliers’ leadership attitude and the supplier development outcome in the areas of quality. and technology.

H1a: Higher levels of supplying firm information exchange will result in higher levels of supplier development outcome related to quality. and technology.14 H6a: Higher levels of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) to the buying firm will result in higher level of supplier development outcome in the areas of quality. “During the 1980s and 1990s. Nelson. and technology. delivery. (b) understanding of goals. (d) leadership attitude. (d) leadership attitude.. and technology. cost. (e) buying firm’s coordinator presence. (c) supplier participation. Krause posited buyer–supplier relationships in the United States are moving from a traditional transactional relationship to a relationship with more cooperation and collaboration. cost. 2003. Krause. 19).. delivery. and (f) suppliers’ dependence on buying firm and the supplier development outcome in the areas of quality. Firms are forging closer relationships with important suppliers and including them in many aspects of the business process (Burt et al. Monczka et al. . 2005). & Stegner. cost. and technology. delivery.. (c) supplier participation. H70: There is no collective relationship with the level of (a) information exchange. (b) understanding of goals. Monczka et al. H7a: Higher collective levels of (a) information exchange. 2003. services and assemblies” (Krause. cost. The supply management function has changed dramatically between 1975 and 1995 (Burt et al. and ensure the on-time delivery of purchased material. 1995. and (f) suppliers’ dependence on buying firm will result in a higher supplier development outcome in the areas of quality. intense global competition has emphasized the need for the purchasing function to simultaneously keep cost low. Moody. (e) buying firm’s coordinator presence. p. Krause. delivery.. 2002). maintain high quality levels.

Golden (1999) emphasized the need to have open communications between the customer and the supplier on information related to quality. Ragatz. In a mixed method research study of 89 minority suppliers. (2002) define collaboration as “the process by which two or more parties adopt a high level of purposeful cooperation to maintain a trading relationship over time” (p. including profitability. John Deere’s supplier development activities allowed the personnel the opportunity to assist suppliers in reducing process steps.15 Burton (2000) defined information exchange as the “relaying of business-related information in a way that enables the recipient to take action” (p. Burt et al. John Deere understood the need for suppliers to be profitable and the suppliers trusted the relationship. and technology. & Starling. John Deere created a trusting relationship with its supplier base. cost. Alliance is defined as a special type of collaborative relationship where “confidential . resulting in lower cost and higher profitability for both the suppliers and John Deere (Golden). One of the most important findings of research conducted by Krause (1995) asserted that communication efforts with suppliers have the potential to affect the level of commitment for supplier development activities. was shared freely. 1996). In a case study analysis of supplier development activities at John Deere. and Hughley (1999) emphasized the need to effectively communicate in order to develop minority suppliers. the level of trust required typically increases (Burt. Dobler. Monczka et al. As a buyersupplier relationship progresses from a transactional to a collaborative to an alliance. 87). the results of Krause. where information related to cost structures. (2003) defined a trusting relationship between the supplier and buyer as “being confident that the other party will do what it says it will do” (p. 135). 134).

Maltz (1998) showed that performance of an electrical firm improved significantly by inviting distributors on site. cost. such as the use of scorecards. Golden. A survey of 527 conducted by Krause and Ellram (1997) indicated that purchasing managers can improve suppliers’ performance by demanding more. opening a clear communication path for expectations and making it a clear objective to be involved in supplier improvement efforts.. Through case study analysis. 1993). 2002. and many other projects (Claunch.16 information is shared. direct involvement of personnel at the suppliers’ or customers’ location. (b) supplier evaluations. 2000. and significant joint improvements are pursued” (Monczka et al. training. Easton. supplier assessments. (c) joint effort to . p. (c) developing future supplier capabilities. (2002) described collaborative relationships as having characteristics such as (a) long-term relationships between buyers and suppliers. clearly communicating expectations. Monczka et al. 1993. and actively participating through supplier development efforts. workshops. 1999. Deming (1982) asserted that long-term relationships such as collaborative relationships are necessary to achieve the lowest total cost. Krause & Scannell. (b) a win–win attitude to the benefit of the relationship. 1995. assets are invested in joint projects. delivery. H2a: Higher levels of the suppliers’ understanding of the goals will result in higher levels of supplier development outcome in the areas of quality. 1997. 2000. Krause & Ellram.. Organizations depend on a number of activities to improve suppliers’ performance. 137). Handfield et al. and technology Watts and Hahn’s (1993) empirical analysis reported a need for three key elements for the successful execution of a supplier development program: (a) establishing clear goals and objectives. Krause. Watts & Hahn.

providing training. Dunn and Young’s (2004) case study revealed that ineffective measurement criteria may be a key obstruction to supplier development. Krause and Scannell (2002) noted that product-based firms tend to be more active in supplier development activities such as site visits.17 improve. Krause. (d) exchange information. 2001). H3a: Higher levels of suppliers’ participation will result in higher levels of supplier development outcome in the areas of quality. Nelson (2004) suggested two key elements: (a) lean supplier development requires an organization to invest in talent and resources with knowledge in activities to improve suppliers’ performance and (b) the activity requires a long-term commitment of the leadership of the organization. H4a: Higher levels of the suppliers’ leadership attitude will result in higher levels of supplier development outcome related to quality. Scannell. the greater the results of the supplier development activity. Forker & Mendez. settle conflict. Research into the factor may provide insight into which pre-requirements may be necessary to initiate a supplier development process. 2000. and meet challenges. and technology The results of Easton’s (2000) research revealed that the more time the buying firm spent at the supplier’s location. and technology The state of commitment of the suppliers’ top leadership at the initiation of the supplier development activity may have an impact on the level of results achieved. Narasimhan et al.. delivery. and direct investment in the supplier firm. & Hershauer. and (e) commitment to the success of each other in the relationship. 1999. & Calantone. 2003. 2001. Research emphasized the need to improve the communications activities to ensure suppliers clearly understand customers’ expectations (Ford. cost. Forker. Ruch. cost. delivery. Hartley and Choi (1996) noted .

leaders of buying firms should ensure the supplier development process includes a priority to achieve supplier leadership commitment to the process. H5a: Higher levels of assignment of a supplier development coordinator by the buying firm will result in higher levels of supplier development outcome in the areas of quality. delivery. and technology Easton (2000) noted that to maximize results of supplier development activities. Easton (2000) conducted empirical research in which 86 suppliers were analyzed and noted that the more positive the suppliers’ leadership attitude toward supplier development activities. cost. Firms willing to appoint a champion to the supplier development effort may have a greater chance for success (Easton). noted that supplier top leadership support is a major factor in the success of supplier development efforts. delivery. (2000) reported that to avoid pitfalls of poor supplier development results. Easton (2000) noted that to maximize results of supplier development activities. Handfield et al.18 organizations that cooperatively participate in a supplier development activity may achieve greater results than suppliers coerced into the activity. leaders of purchasing organizations may need to select firms that support supplier development efforts. and technology Handfield et al. cost. it is important for buying firms to choose suppliers based on factors such as highdependence customers. H6a: Higher levels of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) to the buying firm will result in higher level of supplier development outcome in the areas of quality. the more supplier capability improvement occurred. Because there are limited resources available to any supplier .

Easton reported a positive relationship with the level of suppliers’ leadership attitude. “When a supplier is incapable of meeting these needs. suppliers are expected to deliver innovative products that meet customers’ expectations (Burt et al. delivery. 37). cost. or (3) help improve the existing supplier’s capabilities” (Handfield et al.19 development effort. a buyer has three alternatives: (1) bring the outsourced item inhouse and produce it internally. and technology. (2) resource with a more capable supplier. The research involved an examination of variables in relation to supplier . The research project analyzed the data in the four areas to determine if a relationship exists. 2000. Theoretical Framework As manufacturing and service organizations outsource work to suppliers to focus on core competencies.. H7a: Higher collective levels of (a) information exchange. and level of suppliers’ dependence on the buying firm with supplier development capabilities. The scope of the research was the supplier development process and improving an existing supplier’s performance. and level of supplier participation with supplier development capabilities. p. Krause. delivery. The research. (c) supplier participation. did not separate the findings into the dependent categories of quality. and technology. (b) understanding of goals. (d) leadership attitude. Easton (2000) determined there was no relationship between level of information exchange. cost. and (f) suppliers’ dependence on buying firm will result in a higher supplier development outcome in the areas of quality. selecting suppliers that provide the most return on investment may be key to the supplier development process (Easton). however. (e) buying firm’s coordinator presence. 2003.. level of understanding of goals. level of coordinator presence. 1995).

and customer service (Burt et al. Supply chain leadership activities include supplier selection. The theoretical framework for the study was supply-chain leadership.. 2003). 2002). material inventory turn management. and general organizational and leadership theories. systems management. operations. transportation. and improved technology (Monczka et al. The term supply chain management became an accepted catchphrase with consultants in the 1980s and throughout the 1990s and was analyzed by the scholarly community (Burt et al. The research included the use of the following definition offered by Monczka et al. where supplier’s link to customers that become suppliers for other customers until the final product is produced for the final end user (Burt et al. order processing. 5) Advantages that are achievable through proper supply chain management include quality improvement. . material scheduling. systems management.. 2003). improved product or service delivery. purchasing. operations. material scheduling. (2002): Supply chain management is the integration of these activities [supplier selection. leadership and development. purchasing. order processing.20 development results. cost savings improvements.. reduced product or service cycle time. transportation. material inventory turn management. 2003). (p. cash disbursement. cash disbursement. and customer service] through improved supply chain relationships to achieve a sustainable competitive advantage.. Supply chain leadership includes activities that link suppliers and customers downstream and upstream.

Nelson et al. self- . Nelson. Moody. resulting in the continued alignment of supply chain management performance measures with organizational performance measures. (2001) noted that continued research on supplier development may have a profound impact on the leadership of the buying firms’ ability to establish effective supplier development programs to achieve business objectives. 2003. inspiration. or individualized consideration. when purchased material increased to 50 to 60% of the cost of sales in the United States (Burt et al. A transformational leadership model focuses on developing the employee and the supplier. 2001). & Stegner. Transformational leadership refers to the leader moving the follower beyond immediate self-interest through idealized influence (charisma). transactional leadership focuses on the contingent rewards and manages by exception (Bass. 1990). The transformational leadership model allows the leader to move the organization from what it is to what the leader wants it to be. delivery performance will parallel customers’ expectations. 2001). intellectual stimulation. Supplier quality will be evaluated similar to customer performance indicators. Leadership can be discussed in terms of two theories: transactional and transformational. Due to the high impact of purchased material..21 A transition occurred by the late 1980s. the importance of the purchasing and material function was propelled within the leadership of organizations (Nelson et al. timing. 2001). and language for product development. It elevates the follower’s level of maturity and ideals as well as concerns for achievement. Transactional leadership addresses an exchange of equal-value items. reported the shift within organizations would continue to occur. and information systems will be present throughout the supply chain (Nelson et al. Nelson et al...

involves reviewing the results of the supplier development activity. goal setting. 1995). Phase 2 is the do phase and includes activities such as training. organizations cannot support all desired supplier development problems (Burt et al. doing. and acting (Burt et al.. and technology. the organization. Sanchez-Rodriguez et al. 11) Leadership is expected to maximize the effectiveness of supplier development implementation (Easton.22 actualization. The planning phase includes a discussion on the overall goals of the supplier development activity with the supplier to ensure there is full agreement (Krause). 2000. 1995. 2003). planning. supplier introduction. There are four phases in the supplier development process: planning. 2003). p. The study evaluates factors in supply leadership that may contribute or hinder the effectiveness of supplier development programs. Results are also compared to the objectives established for the supplier development activity. and the well-being of others. In some cases. 2005). and society. current state analysis. 2003). 2003). Results are collected for a period of time and compared to the baseline data initially collected. the organization prioritizes and selects the projects that may provide the highest yield related to quality delivery. cost.. In the planning phase... At the planning phase. Phase 3. Krause. an organization makes a decision as to whether or not the supplier development project is initiated (Krause. the project is hard-pressed by the customer due to the supplier firm’s poor quality or delivery performance (Burt et al. the check phase. Improvements are institutionalized to ensure the elevated performance is maintained.. data collection. Due to resource constraints. process selection. checking. 1999. and implementation (Burt et al. The final phase is the . (Bass.

Independent and Dependent Variables Figure 1 represents the test model for the research with the independent variable represented in oval shapes and the dependent variable in circles. (b) understanding of goals. The independent variables include values related to (a) information exchange. and quality expectations are also controlled. (d) supplier leadership attitude. delivery. processes. and (f) supplier dependence on buying firm and the dependent variables include the results achieved through the supplier development activity in the areas of quality. procedures. (c) supplier participation. The research involved an analysis of the relationship of the independent variables to the dependent variables. The rectangle represents variables that were controlled with this research. and technology development. cost. The research model is reviewed in greater detail in chapter 3. market conditions. Business environmental factors such as competition. . 2003). and policies as opposed to utilizing several firms with greater variation.. The research involved a single large automotive supplier where the magnitude of variation is reduced due to greater consistency in the business and organizational environment. (e) buyer firm’s coordinator presence.23 act phase and includes the dissemination of the improved method to other parts of the organization (Burt et al.

Definition of Terms The following definitions offer a more detailed understanding of terminology used in the research. 7. 4. 6. (2002) defined collaboration as “the process by which two or more parties adopt a high level of purposeful cooperation to maintain a trading relationship over time” (p. 5. 3. & Yang. Independent Variables Supplier Organization level information exchange level of understanding of goals level of participation level of suppliers’ leadership Analyze for attitude relationship level of coordinators presence level of suppliers dependence on the customer firm collective relationship of the six (1-6) independent variables Dependent Variables Supplier Development Results: quality.24 1. 2. The section provides a link between the terms used in the research. The definitions serve as a method to ensure proper representation of data and facts. Jun. Procedures. Collaborative relationship: Monczka et al. Model of factors influencing supplier development results. cost. and Policies Figure 1. delivery. 2006). . Buying firm: A buying firm is the organization that purchases a service or product from a supplier (Cai. and/or technology Controlled Variables Buying Organization • Business Environment • Organizational Environment • Buying Firms Processes. 135).

“In a manufacturing Keiretsu.. 2003). with short lead times. Japan. According to the Supply Management Research Group. “A Keiretsu relationship is based on a close and stable business collaboration between affiliated entities. 2003). Japan. “One definition common to many researchers includes the words ‘fixed relationship’ or ‘close cooperation’ between . 6). p. suppliers. Japan (2005) studied the evolution of keiretsu relationships. manufacturing engineering. 23). 2005). 6) resembling a monopolistic market. To obtain the percentage. and purchasing (Burt et al. Kaizen: Kaizen is a Japanese term signifying continuous and incremental improvement and an organizational philosophy about involving everyone in the pursuit of improvement in productivity or performance (Burt et al. Keiretsu: Keiretsu is a series or related sequence.25 First-time quality percentage: Also referred to as first-time yield. rather than on family or other social ties” (Supply Management Research Group. The team is empowered to achieve continuous improvement through creativity (Alukal. manufacturers supply components to companies on a continual and stable basis” (p. Japan. tools. Kaizen team: A kaizen team is a cross-functional team consisting of individuals from product engineering. the value is divided by the total parts produced. sales. and techniques that allows a company to produce and deliver products in small quantities. manufacturing. 2004. p. it implies that things are lined up methodically or by position (Supply Management Research Group. 2003). Just-in-time (JIT): “JIT is a set of principles. 2006). first-time quality is the process yield without scrap and rework (Vermani. to meet specific customer needs” (Liker. Keiretsu relationships: The Supply Management Research Group..

. 6). Supplier: Supplier is the contract manufacturer or contract service provider that produces and sells a product that the buying firm intends to use to support operations in the manufacture of a product or service to be sold to a third party. p. Strategic alliances relationships: Alliance is a special type of collaborative relationship where “confidential information is shared. Selling firm: The organization that vends material or services to the buying firm (Dunn & Young. Supply chain: Burt et al. 2002. Re-sourcing: Re-sourcing is the act of moving business from one supplier to another (Burt et al. in some cases between [a] large company and [a] conglomeration of other companies” (Supply Management Research Group. p. Para.. and significant joint improvements are pursued” (Monczka et al.. 2005. supplier was an organization whose business is to supply a particular service or product to a buying firm. n. also known as cost-based pricing. For the use of should-be-cost to be effective. 2). Should-be-cost: Should-be-cost. is when a product is priced based on the cost structure of the supplier to manufacture the product or service (Monczka et al. Japan. assets are invested in joint projects.26 entities. (2003) asserted that re-sourcing may be one approach to improving a supplier that is not performing adequately. Burt et al. 137). For the purposes of the current research. The use of should-be-cost allows the supplier and customer to minimize the time spent on price negotiations and maximize the time spent on cost reduction (Monczka et al. 2004). Supplier is “someone whose business is to supply a particular service or commodity” (Supplier. the supplier and customer should agree and understand the cost structure and profit requirements.d. 2003).). 2002). (1996) offered the following definition for supply chain: .

(2003) described the transactional relationship as “an arm’s-length relationship wherein neither party is especially concerned with the well-being of the other” (p. the relationship is limited by the exchange of money for services or products (Burt et al. at the right time. 2003).27 This chain is the upstream of the organization’s value chain and is responsible for ensuring that the materials. 2003). and fabricate the finish good or service purchased by the ultimate customer. perform a series of value-adding activities. in the right quantity. Assumptions The basis of the study included three assumptions. (p.. 13) Transactional relationship: In a supplier–buyer transactional relationship. As the relationship between the buyer and the supplier progresses from transactional to collaborative to alliance. To minimize the risk. A subject-matter expert was an individual with a doctoral level of education with a focus on supply chain research and . The value chain is a series of organizations extending all the way back to firms which extract material from Mother Earth. The section includes a definition of each assumption followed by the rationale. The survey instrument was valid and reliable and the variables selected represent factors found to influence supplier development results. Trust: Burt et al. and technology are purchased from the right source. service. the level of trust required typically increases (Burt et al. 81). Burt et al. 87).. (2003) offered a definition that applies to the relationship between the buyer and supplier as “being confident that the other party will do what it says it will do” (p. subject-matter experts and rigorous validation test methods were utilized to test the survey method.

Are there mismatches between the questions and the responses? g. The second assumption had two components: (a) the individual would respond truthfully and (b) the individual would recall the experience accurately. The survey instrument was evaluated in the following areas as determined by Creswell (2003): 1. Are the responses overlapping? e. Are there inappropriate or sensitive questions that require rewording or elimination? 2. Based on the feedback provided by the pilot group. the respondents were . Are there inappropriate open or closed-ended questions? 3. Are the responses balanced? f. Conduct a pilot test of the research instrument that allows pilot participants to provide feedback directly on the survey. Is the question too wordy? d. Are questions clear? b. The second assumption was that the survey respondents would accurately and honestly respond to the survey questions. Does a question overuse technical jargon? h. Does each question require one response? c.28 education. the survey instrument was revised before being sent to the participants of the research. Does the questionnaire follow a logical order to avoid confusion? 4. To minimize the risk of an error in recall. Question construction a. The pilot group was excluded from the research as recommended by Creswell (2003).

To minimize the risk of this error. supplier staff members trained to execute supplier development activities were asked to fill out the survey instrument. The third assumption was the sample contained individuals who are knowledgeable. All participants were supplier development . To minimize the risk of a lack of truthfulness in responses. The first limitation is that the research displays data from participants who chose voluntarily to respond to the survey. The study was also limited to the variables identified in the research design and dismissed other variables with greater importance.29 requested to utilize only recent supplier development projects between January 2005 and February 2008. The fourth limitation is that the research project evaluated only the factors defined from the literature review and omitted other important variables. The second is that the survey was limited in size and population to those who participated in supplier development activities with a single large automotive parts manufacturer between 2005 and 2008. Limitations Several limitations exist in the research. The fifth is that the research was limited to supply chain professionals who have led a supplier development project. a single buying organization was used for the research. To minimize the risk of this error. professional supplier development staff members with more experience and knowledge were utilized in the research for survey responses. The third is that the time to conduct the research was limited. Chapter 3 contains additional information on the research methodology. The fourth assumption was that no environmental factors or industry factors would influence the research results.

2003). To effectively utilize these resources.. This research involved an examination of variables that showed a relationship to supplier . Summary Customers are focused on core competencies and are dependent on their suppliers to provide products and services that allow them to be competitive in the markets (Burt et al. The study focused only on variables identified in the research. The study was confined to survey supplier development engineers or supply chain professionals who have executed supplier development project between January 2005 and February 2008. One method to improve a supplier’s performance is the use of supplier development. organizations must understand the factors that show a relationship to successful results of supplier development activities. Only suppliers who have participated in supplier development activities with the participating buying organization were included in the study. The research involved an organization that supported supplier development activities and programs for over 5 years. The research viewed supplier development from the buying firm’s perspective and therefore excluded the supplier’s views. Delimitations The delimitations of one buying organization are deliberate due to a focus of minimizing the influence of environmental factors and of the researcher’s immediate access to a large automotive supplier as a source of research participation. Firms in the initial stages of supplier development may have to work on factors not covered in this research.30 personnel who had overseen the completion of a project between January 2005 and February 2008. The commitment of the organization to supplier development demonstrates that the firm understands the benefits of such practices.

improved product quality. 38).. better delivery. and technology development. Narasimhan et al. and (f) supplier dependence on buying firm with the dependent variables of results achieved through the supplier development activity in the areas of quality. This research may improve a firm’s capability to lead supplier development efforts. cost. By understanding the relationship of the independent variables related to (a) information exchange. (2001) noted. leadership of supply chain management is served. The results of the research study provide additional knowledge on how buying firms can improve supplier development processes. The research may have the potential to make a significant contribution to the understanding of the variables that influence successful supplier development results. The current research involved an attempt to identify variables that relate to the . Research indicated the variables that have the greatest influence on successful supplier development could provide small and large firms the ability to improve the results derived from these efforts. (b) understanding of goals. More effective supplier development efforts translate to the buyer firm as reduced costs. To utilize resources effectively. By understanding the factors. “Effective allocation of resources for supplier development programs is often a difficult decision faced by managers” (para. Supplier development activities vary significantly across organizations. firms may be able to establish more effective supplier development efforts.31 development results. (e) buying firm’s coordinator presence. (d) supplier leadership attitude. 2002). (c) supplier participation. delivery. Buying firms as well as suppliers could benefit from this research. and use of improved technology (Monczka et al. one must understand the variables that provide acceptable results.

independent variables. . cost. Watts and Hahn (1993) indicated that as competitive pressure continues to rise. with the dependent variables of results achieved through the supplier development activity in the areas of quality. delivery. and prior research methodology. The research involved an examination of whether a significant relationship exists between the independent variables of the (a) suppliers’ level of information exchange. supplier participation. hypotheses. and (c) supplier dependence on buying firm.32 successful execution of supplier development programs. which includes the supplier base to improve the profitability of the company. and technology development. organizational leaders must explore every opportunity to improve performance effectively. and supplier leadership attitude. Chapter 2 contains an examination of the current body of knowledge as it pertains to the research question. (b) buyer firm’s coordinator presence. understanding of goals.

(b) understanding of goals. 307). 2004). the literature review is presented related to supplier development. Monczka et al. 3). The importance is on improving the existing suppliers’ performance and capabilities to meet the buying firm’s needs and not on replacing the supplier with a new one (Dunn & Young. Following is a review of the literature on (a) information exchange. The chapter ends with a summary of the literature and an introduction to the research method approach in chapter 3. and (f) suppliers’ dependency on a buying firm as they relate to supplier development results. 2004. (d) suppliers’ leadership attitude. Nelson.. to meet the purchaser’s short. (2002) provided a broader definition: “Supplier development is any activity undertaken by a purchaser to improve a supplier’s performance and capabilities. (1990) held a narrow viewpoint of supplier development as “the creation of new sources of supply when there are no adequate suppliers to meet the firm’s requirement” (p. The literature framework includes a discussion on supplier development and the steps firms take to execute a supplier development program. “supplier development is defined as the transfer of resources for the purpose of improving the supplier’s performance and capabilities” (Easton. 2000. (c) suppliers’ participation. Supplier development represents a proactive approach to improving suppliers’ performance and capabilities through the use of supplier development activities to achieve organizational objectives (Burt et al. (e) buyer firm’s coordinator’s presence. p.and long-term supply needs” (p. 2).33 CHAPTER 2: REVIEW OF THE LITERATURE In this chapter. For the purpose of this research. Literature Review Hahn et al. When supplier development . 2003).

delivery.. Nelson et al. To improve supplier performance. Successful supplier development activities may result in the buying and supplier firms becoming more competitive. additional research was reviewed that pertained to supply chain managements. cost. 2003). There is a gap in the literature related to supplier development.. 1995). Rationale for Supplier Development A survey of purchasing professionals conducted in 1993 indicated that suppliers were deficient in performance areas such as quality.. and bringing new technology into products (Morgan. 463). therefore. 2001). 2003. cost reduction. 1993). and experiencing enhanced longevity (Krause. Monczka et al. design. Saad. and deploy supplier development efforts (Burt et al. buying firms may expect to see improvements in quality. and product and process improvements that in turn enhance customer satisfaction and firm performance” (p.34 activities are pursued. Buying firms may design supplier development structures with limited to extensive resources. The purpose of supplier development efforts may range from limited activities related to measuring and communicating a supplier’s performance to extensive support such as on-site supplier support to assist in executing supplier improvement practices (Burt et al. improved manufacturing.. 2002).. Koh. and technology (Burt et al. and Arunachalam’s (2006) case study analysis determined that “good management of supplier involvement and an agile SC [supply chain] can lead to better supplier performance. 2003.. Monczka et al. delivery. supply chain management professionals organize. becoming more profitable. The rationale for supplier development activities in literature is evident in the number of qualitative and quantitative studies examining supplier development practices .

p. training sessions. technology development. supplier’s use of customers’ capital equipment. capacity workshops. The key to Toyota’s success would appear to be their highly effective supplier integration process that over the past 50 years has enabled the excellence of their internal hoshin kanri (policy deployment) strategic total Toyota Production System to be shared with their direct suppliers. and direct financial investment (Burt et al. 2005). on-site assessments. manufactures spent 48 cents for material out of every dollar of sales compared to 43 cents in 1996.. Newman and Rhee (1990) explored the just-in-time (JIT) concept and the importance of working with suppliers to properly execute JIT principles.S. supplier qualification. cost improvement workshops. Newman and Rhee showed the importance of communications to execute JIT principles. personnel exchange. 2002). In an exploratory study. Krause and Ellram (1997) identified a correlation between supplier development results and supplier firms having philosophies regarding expected performance and the willingness to devote resources. other kaizen events. quality improvement workshops. The increased dependence on suppliers also provides a rationale to study supplier development.. Quantitative research by Krause and Ellram . (Bennett & O’Kane. Easton. 2000. 12) Claunch (1993) examined Kawasaki Motors Corporation and identified three steps related to successful supplier development results as preferred supplier status. 2006. Monczka et al. and a part certification process. Liker and Choi (2004) noted the top 100 U. Supplier Development Supplier development activities where buying firms deploy resources to improve a supplier’s performance include supplier scorecards..35 (Sanchez-Rodriguez et al. 2003.

and other capabilities of key suppliers.36 (1997) indicated supplier development practices accounted for improved quality levels. 39-41). Top factors driving procurement organizations [buying firms] to improve supplier development and collaboration. Handfield et al.” 2005.” (e) “Identify Key Project. 10) In a quantitative research study with 81 respondents. improved cycle times. improved delivery performance. according to the research. (2000) developed a conceptual model for the execution of supplier development. A discussion of each step follows. and develop and improve capacity. Supplier Development Steps Handfield et al.” (f) “Define Details of Agreement. The result would be commodities segmented into four . and improved relationships between the buying and supplier firms. Step 1: Identify critical commodities.” and (g) “Monitor Status and Monitor Strategies” (pp. p. with a secondary focus on the consolidation of the supply base. throughput. include pressures to generate year-over-year improvements in supplier quality and performance.” (d) “Meet with Supplier Top Management. (2000) described an approach of segmenting commodities in relation to low to high volume in relation to low to high opportunity versus risk.” (b) “Identify Critical Suppliers. (“70% of Firms.” (c) “Form a Cross-Functional Team. identify opportunities to remove non-value-added cost from the supply chain. Handfield et al. Watts and Hahn (1993) indicated the most important objective of supplier development for most firms is to improve suppliers’ quality performance to compete in the market. identified the steps as (a) “Identify Critical Commodities.

Questions the procurement manager should consider and answer yes to most or all include the following: 1.. Handfield et al. 2003). Is the source expected to be a supplier for the foreseeable future? 3. 2007). Unpredictable issues include a current supplier with a recent quality or delivery (volume) concern that should be addressed to meet customer requirements on an urgent and high-priority basis. Will you view the supplier as an extension of the operation? 5. 39). 2002) Deere uses a method of identifying 20% of the suppliers that represent 80% of the total material spend (Burt et al. p. May 1.37 categories: (a) “Noncritical Suppliers. Deere also considers strategic and critical suppliers to operations regardless of the amount of material spent for supplier development application (Burt et al. Gary Lennon (personal communication.” (c) “Bottleneck Suppliers. 2003). chronic supplier poor performance in quality and delivery. Does the source offer an opportunity to provide a competitive advantage? 2..” and (d) “Critical Strategic Suppliers” (Handfield et al. and suppliers . offered an alternative segmentation approach. Lennon determined that suppliers need to be considered for supplier development from a predictable and unpredictable viewpoint. Predictable supplier issues include new program launch concerns. strategic suppliers. (2000) noted that suppliers in the critical strategic supplier category warrant consideration for supplier development activities. Director of Supplier Development at Delphi Corporation for the Powertrain Division. Is there an objective to create a trusting relationship? (Monczka et al..” (b) “Leverage Suppliers.. Is there opportunity to accept the supplier’s suggestions? 4. These suppliers may surface due to a recent missed shipment or a quality spill to operations.

they may take priority over all predictable opportunities. May 1. Cost Figure 2. If the procurement manager believes help is needed to resolve the unpredictable issue. Launch issues are supplier performance concerns related to new businesses going into production. Supplier Quality & Development Business Priority Unpredictable Schedule Predictable Schedule QVC Kaizen Suppliers Critical Supply $ Troubled Tool Move QV Crisis 6 2 Chronic QV Suppliers Launch Suppliers 1 4 3 5 Strategic Suppliers QVC – Quality. Supplier quality and development business priority. assistance through supplier development may be necessary. Critical supply issues related to quality and volume typically must be addressed in an urgent and unpredictable manner. Figure 2 represents a model of the segmentation process. suppliers are segmented into six predictable categories of potential opportunity with an additional unpredictable area defined as critical supply issues. According to Gary Lennon (personal communication. 2007).38 targeted for kaizen activities. Due to the urgency of such issues. . Volume.

Ford (2003). “Before approaching suppliers and asking for improvements. Priority 3 suppliers are having launch concerns and are strategic to the firm. launch readiness. and are performing poorly from a quality and volume perspective. Handfield et al. With suppliers segmented utilizing the preferred method of the buying firm. Step 3: Form a cross-functional team. (2002) noted. procurement professionals must decide which suppliers to execute supplier development activities. May 1. Step 2: Identify critical suppliers. a senior .39 Categories 1 through 6 are predictable through a careful analysis of the supply base as well as the value propositions of the product lines. Monczka et al. Priority 6 suppliers have an opportunity to provide a return to the firm based on a kaizen event in the areas of quality. it is important to develop internal cross functional consensus for the initiative” (p. supplier’s delivery and quality performance. (2000) determined it is important to have members of the buying firm in agreement with the scope of the supplier development activity prior to approaching the supplier. (2000) asserted constructing a Pareto chart of current supplier performance concerns is a common approach for selecting suppliers for developmental support. Handfield et al. personal communication. 310). Priority 4 suppliers are strategic to the firm and are having chronic quality and volume concerns. Priority 5 suppliers are strategic to the firm. A careful evaluation of the buying firm’s value propositions. volume. and cost. and potential kaizen opportunities allows the procurement organization to identify suppliers for potential supplier development activities (G. Priority 2 suppliers are having launch issues and quality and delivery concerns. Lennon. Priority 1 suppliers are strategic to the firm. 2007). are having launch issues or concerns.

Handfield et al. (2000) reported after identifying suppliers and achieving the suppliers’ leadership commitment. Handfield et al. Step 5: Identify key projects. 2000.. Golden. 1995. strategic importance of the project.). Step 4: Meet with supplier’s top management.. 2000. 1997. noted in a best practice review that a key driver of success in supplier development is the buying firm ensuring there is agreement on the current performance level of the supplier as well as the expected performance requirements. Leadership then determines the areas to focus on for improvement and the degree of resources assigned (Burt et al. It is also important for both the buyer and the supplier to understand the potential benefits of the project (Handfield et al. “Next. the team works to identify promising opportunities and the required resources and time needed to complete the project. Monczka et al. 40). 299).40 consultant with ADR International Purchasing Consultants. 1999. measurement. Easton. and professionalism” (p. and life of the product. 2003. the buyer’s cross functional commodity team approaches the supplier topmanagement group and establishes three keys to supplier improvement: strategic alignment. (2000) explained. . (2002) also noted other factors to consider such as the abilities of the supplier and buyer personnel. (2005) revealed there “is strong justification to promote supplier development efforts and to obtain the resources needed to implement them” (p. Krause & Scannell. Handfield et al. 2002). Krause & Ellram. Krause. Nelson (2004) identified two key elements: lean supplier development requires an organization to invest in talent and resources with knowledge in activities to improve suppliers’ performance and the activity requires a long-term commitment by the leadership of the organization. SanchezRodriguez et al.

project scope. (2003) noted that once the metrics are defined for the project. (2003) suggested obtaining signatures from all participants for a supplier development project charter. Nelson (2004) noted a process of conducting top leadership meetings between the procurement organization and the supplier firm to gain agreement for a project. goals of the project. In this stage. Watts and Hahn (1993) conducted research on 81 companies..41 Step 6: Define details of the agreement. the organizations define the scope of the agreement for the supplier development project (Handfield et al. Empirical research by Krause and Ellram (1997) from 527 members of the National Association of Purchasing Management indicated that procurement organizations where expectations were exceeded invested more effort in many ways such as communication. training and education. Burt et al. (2002) described the importance of coming to an agreement on the project but did not note that signatures are necessary. schedule and deliverables. formal evaluations. 2000). 2003). Quantitative research by Krause et al. Monczka et al. and roles and responsibilities (Burt et al. Step 7: Monitor status and modify strategies.. and involvement. The charter should include information related to the business case. (2000) on 270 manufacturing firms showed that supplier incentives are key enablers of supplier development activities. Monczka et al. . Burt et al. a “closed-loop corrective action procedure system is installed to review the process. address gaps in performance. 524). which determined that accurate and timely evaluation of the supplier development activity is vital to the success of the project. and continuously improve performance” (p. (2002) determined that top management must monitor the project and meet often to ensure the momentum continues.

The rationale for supplier development activities in literature is evident in the number of case studies examining organizations achieving success in part through the supplier’s contribution (Dunn & Young.. supply chain management organizations design and deploy supplier development efforts (Burt et al. Sanchez-Rodriguez et al. and increase the rate of innovation” (p.. and Deringer (2007). The first definition offered by Hahn et al.. 2001). Monczka et al. Two definitions were introduced under the concept that a supplier development program is any “systemic organizational effort to create and maintain a network of competent suppliers” (Hahn et al. help improve product quality. 2004. To improve performance. 2002). 2004. “Corporate leaders expect supply managers to ensure an uninterrupted flow of goods and services (often on a justin-time basis). 2003.. Monczka et al. Buying firms may design supplier development structures with limited-to-extensive resources (Burt et al. The second expanded the definition to include activities intended to upgrade existing suppliers to meet customer needs (Hahn et al. asserted a narrow perspective of supplier development as activities to develop new suppliers when none exists. 3). According to Niezen. 2003. Krause & Scannell.42 Research in Supplier Development Hahn et al. 2005). 2002. Nelson et al. reduce cycle time or time-to-market. Sako. p... (1990) purported that the main objective of purchasing is to ensure quality suppliers are capable of meeting the supply needs of the organization. Leenders and Blenkhorn (1988) noted that supply .. 2003). Weller.). 7).. The purpose of the efforts may range from limited activities related to measuring and communicating a supplier’s performance to extensive support such as onsite supplier assistance in executing supplier improvement practices (Burt et al.

p. “To NUMMI. p. rather. Toyota’s traditional approach to the supplier–buyer relationships followed two key concepts known as keiretsu and kaizen activities. (NUMMI). engineering. Electronic communication methods were also deployed to . Martinez-Lorente. 18). and therefore a focus on supply-chain-management is inevitable. named New United Motors Manufacturing Inc. JIT is not simply the arrival of inventory at the correct time. and designing (Newman & Rhee. Between 1980 and 1990.43 objectives of firms could be met by aggressively working with existing suppliers or in some cases creating new capable suppliers. “NUMMI deployed three focuses in working with suppliers: (a) Its approach to scheduling. (b) Its communication. NUMMI communicated to its suppliers through simple methods such as the use of kanban cards to inform suppliers what and how much to ship. 18). The kaizen approach refers to the philosophy that suppliers will work on continuous improvement to provide the buyer with opportunities to competitively improve the organization’s performance (Newman & Rhee). 1990). Keiretsu refers to the network of businesses that are interdependent and interrelated to create a value chain with a competitive edge due to a focus on constant improvement. NUMMI utilized the JIT concept in scheduling. and (c) The relationship between planning and order release” (Newman & Rhee. Japanese firms’ investment patterns in the United States shifted from a passive approach of supplying capital to an active approach of managing. Sanchez-Rodriguez. 1990. An example of an active approach is the arrival of the joint venture between General Motors and Toyota. it is a total manufacturing philosophy” (Newman & Rhee. and Spain (2004) asserted purchasing leadership understands that product quality is limited by the level of quality of incoming material and services.

Claunch emphasized the importance of Kawasaki Motors Corporation executing improvements internally within the organization prior to taking them to the supplier base. supplier qualification. 7). para. Watts and Hahn also showed that 63% of the organizations that responded had some type of supplier development program in place. 1993). the programs varied in terms of scope and name. Claunch (1993) examined Kawasaki Motors Corporation and defined three steps related to successful supplier development results as preferred supplier status. 2002). Organizations need a capable supply base network to meet competitive market requirements (Burt et al. and a part certification process. 1). Krause.” and (c) “Correct counts” (Claunch. and the projects had different levels of participation. 1995: Monczka et al. 43% of the programs were in place for more than 4 years.. Survey results from 81 respondents showed that greater than 50% of the organizations rated suppliers only once or twice per year (Watts & Hahn.” (b) “On-time deliveries.44 ensure effective communications. 2003. Watts and Hahn (1993) noted.. The supplier development program’s certification process was founded on the principles of listening to suppliers and working meticulously toward joint success of both the buying and the selling firm (Claunch). utilizing communications channels to assist the suppliers’ understanding and performance in meeting requirements (Newman & Rhee). Knowledge of NUMMI’s planning process was shared. “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 increasingly competitive challenges” (para. The organization also identified three important strategic performance measures for the supplier development process: (a) “100% quality. The .

federal government to describe a company that is at least 51% owned by a minority person such as Black American. Native American. 34) compared responses related to the results achieved from suppliers’ development activities and separated them into two categories: exceeded and fallen short. The group designated exceeded reported that the organization’s supplier development activities exceeded expectations. Small minority-owned suppliers reported greater communications problems and were more concerned about the customers’ focus on reducing the number of suppliers (Krause et al. Krause et al.45 research produced three findings: (a) the importance of defining clear goals and objectives. “The term ‘minority-owned suppliers’ is used by the U. and (c) supplier development efforts should focus on future supplier needs instead of only on current quality or cost concerns (Watts & Hahn). and training and education (Krause & Ellram). (b) supplier assessments are important to the success of supplier development efforts. In an exploratory study with 527 high-level purchasing executives. The research indicated that firms where supplier development efforts exceeded expectations placed more effort on communications. feedback and evaluations. 33).S.. involvement with suppliers. p. The group designated fallen short reported that the supplier development efforts has fallen short of the organization’s expectations. or Asian-Pacific American” (Krause et al. Krause and Ellram (1997. para. Hispanic American. 1999.. 1999). (1999) examined responses from 89 minority-based suppliers to assess the effectiveness of an organization’s minority supplier development program. . The results indicate small minority-owned suppliers were generally less positive about supplier development activities compared to large minority-owned suppliers.

Analysis of the data indicated that if the buying firm’s goal is to ensure knowledge is utilized at the supplier base. The data revealed the supplier selection process is important and factors such as the level of supplier dependency on the customer. The research revealed that supplier incentives and supplier assessment stimulate supplier action indirectly to improve performance. The results indicated supplier development activities at the service- . Research by Krause et al. 2000). 49). (2000) utilizing survey responses from 527 members of the National Association of Purchasing Management showed that “supplier assessment and supplier incentives are key enablers of supplier development efforts for the manufacturing firms in this sample” (p. The data also showed that direct involvement of the buying firm in activities such as training plays a direct role in achieving significant results (Krause et al. The research indicated the extent of supplier development activities at a composite level did not correlate positively with improved supplier performance.. greater initial and follow-up commitment is needed. Krause and Scannell (2002) collected data comparing 312 products and 200 service organizations. The research also indicated the importance of selecting the right suppliers.46 Easton (2000) conducted research limited to one firm and the firm’s suppliers involved in supplier development efforts. and suppliers’ leadership’s willingness to appoint a coordinator are integral to successful supplier development results (Easton). degree of suppliers’ upper management support. Surveys were completed by both the buying firm and the supplier organization. Seventy-four acceptable paired responses were analyzed to understand the factors that contributed to successful supplier development efforts.

Sako indicated Toyota’s twofold approach of separating the Toyota Production System (supplier development) from the purchasing function allows the suppliers to learn as if they were a part of the Toyota organization. 2000. The Honda and Nissan approach unifies these efforts. Nissan and . The separation allows the supplier to focus on learning how to execute improvements and screening the supplier from the purchasing organization. 2000). and directly investing in the supplier” (Krause et al. “Overall. and known escalation process. Dunn and Young proposed from the research that buying and supplier firms with relationships based on price elicit few supplier development activities. Nissan.47 based firms are different from the approach at product-based firms (Krause & Scannell). while the purchasing function focuses on total quality control. p. Product-based firms reported higher use of supplier evaluation. Sako (2004) compared supplier development activities at Honda. however. the unified approach represents a possible impediment to learning. offering a single point of focus for the supplier. established communication loops. Dunn and Young (2004) executed a case study of five firms based on a model that includes an analysis of a buying firm’s expectations and current supplier assessment to determine the type of supplier relationship and the performance gap that exists. and supplier feedback activities (Krause et al. product-based firms tended to take a more active role in supplier performance improvement than did service firms by conducting site visits.. consistent measurement method. certification programs. providing training/education.. 17). The results of the research indicated factors important to supplier development across all industries including level of participation. and Toyota to understand the differences in the organizations’ approaches.

Research indicated supplier development is time consuming and results take time to be realized. Case study of 5 buying firms. and (3) part certification of a supplier. & Monczka (2000) Dunn & Young (2004) Research indicated ineffective measurement criteria may be a key obstruction to supplier development. Mixed research study of 89 minority-based suppliers.48 Toyota have an identified inner core of suppliers in which process improvement approaches are taught utilizing a hands-on approach (Sako). Table 1 Summary of the Qualitative Research on Supplier Development Author Claunch (1993) Contribution Identifies 3 steps involved in supplier development: (1) preferred supplier status. Krause. Ragatz. & Results showed smaller suppliers were Hughley (1999) generally less positive about supplier development efforts. Comparison case study. (2) qualification of supplier. and Toyota. Sako (2004) Comparative study of supplier development activities at Honda. Krause. Handfield. Comments Prescriptive. Article presents survey data and examples drawn from case studies. Case study of Kawasaki Motors Corporation. Scannell. . Nissan.

crossfunctional effort. Krause & Ellram Identified and discussed the antecedent (1997) variables to supplier development. Hemsworth. SanchezRodriguez. Easton (2000) Identified and discussed significant factors that Empirical study of one contribute to successful supplier development approaches such as extensive supplier support. based on improved organizational results. Scannell. The results indicated strong Empirical research utilizing 306 surveys from purchasing justification for supplier development activities managers. & Results indicated that supplier assessment and supplier incentives are key factors to promote Calantone (2000) successful supplier development efforts. & MartinezLorente (2005) Research studied the impact of supplier development practices on organizations’ performance. . there is quantitative research on supplier development. 312 product-based and Krause. which include support of top management. and effective communication. Krause & Research indicated that product-based firms Scannell (2002) tend to be more active in supplier development. 200 service firms. 74 participants Empirical study utilizing 527 responses. Table 2 Summary of the Quantitative Research on Supplier Development Author Contribution Comments Empirical analysis of 527 high-level purchasing executives. Table 2 represents a summary of the quantitative research conducted on supplier development.49 In addition to qualitative research. buying firm.

. 2000. referring to the extracting phase of taking the product from the earth and then processing it until it is in its intended form for the final customer.. 2001). p. an understanding of the concept of supply chain management is required (Burt et al. (2002) noted the supply chain encompasses all actions connected with the stream and transformation of products or services from the raw material stage (mined out of the earth) through to the end-buying firm. 2002). 2006. A transition occurred by the late 1980s where purchased material increased to 50 to 60% of the cost of sales in the United States (Burt et al. p. and trust in achieving successful supplier development results (Handfield et al. 2000). 29). 2003. it would be a fatal mistake if companies were to neglect the potential of supplier development practices” (Wagner. “With suppliers making a significant contribution to a company’s competitive position. 566).. Nelson et al. also noted the supply chain includes the information flow throughout the transformation phases. measurement systems. The chain is referred to as dirt to customer. information and financing around three competitive priorities: price. delivery and quality” (Stading & Altay. 1995. To execute supplier development.. “In the twenty-first . Monczka et al. “Supply chain management is generally regarded as the integration of the flows of material. The term supply chain management became an accepted catchphrase with consultants in the 1980s and throughout the 1990s and was analyzed by the scholarly community (Burt et al. Krause et al. 1999... Monczka et al. Supply Chain Management Monczka et al. communications. 2007. 2003. Krause.50 The limited supplier development research over the past 20 years has demonstrated the importance of commitment. 2003)..

Supply chain includes activities that link suppliers and customers downstream and upstream.. the definition offered by Monczka et al. the purchasing and material management function was propelled in importance within an organization’s leadership. and customer service (Monczka et al. order processing. The individual company must position itself into a competitive SC and the different SCs will compete against each other” (Koh et al. because the lack of synchronization can adversely impact cost. p. Due to the high impact of purchased material.. resulting in the continued alignment of supply chain management performance measures with organizational performance measures. timing. Gordon (2005) reported. 2002). cash disbursements. will be utilized for the research: “Supply chain management is the integration of these activities through improved supply chain relationships to achieve a sustainable competitive advantage” (p. Supplier quality can be evaluated similar to the method the customer provides performance indicators. key suppliers need to be on a lean journey themselves. 21). (2001) noted the shift within organizations will continue to occur. For purposes of the current research. purchasing. material scheduling. warehousing. 5).51 century. 463). Nelson et al. and language for product development. transportation. These activities include systems management. it will no longer be single companies competing against each other. “If a company is pursuing lean and just-in-time deliveries. and information systems will be present throughout the supply chain (Gordon). delivery performance will parallel customers’ expectations. 2007). 2006. operations. quality and delivery” (p. where supplier’s link to customers that become suppliers for other customers until the final product is delivered to a final customer (Stading & Altay. Advantages that can . inventory turns.

training. (d) improved product or service delivery. Handfield et al.. Sanchez-Rodriguez et al. 2002. Moberg (2000) noted the “premise behind SCM [supply chain management] is that the sharing of information and coordination of strategies among firms in a supply chain can reduce total logistics costs and enhance value delivered to the . Research Variables An organization operates with limited resources to apply to activities that support its operation. 2005). 2000. and many other projects (Claunch. workshops.52 be achieved through proper supply chain management include (a) quality improvements. Information Exchange Information exchange was selected as a variable for the research due to the numerous authors advocating its importance in successful supplier development processes (Burt et al. The literature review offers insight into the research conducted in the area of supplier development. direct involvement of personnel at the suppliers’ or customers’ location. supplier assessments. Krause. Dunn & Young.. Research has shown that organizations depend on a number of activities to improve suppliers’ performance. 2004.. 1993).). 2002. Easton. (c) reduced product or service cycle times. Krause & Scannell. 134). 2000. 1993. (b) cost-saving improvements. Burton (2000) defined information exchange as the “relaying of business-related information in a way that enables the recipient to take action” (p. 1997. Watts & Hahn. This section includes a review of the research findings related to the factors studied. and (e) access to suppliers’ product and process technology (Monczka et al. 2003. Monczka et al.. Elmuti. 1995. Krause & Ellram. such as use of scorecards. 2002.

2000. Empirical analysis of responses from 527 high-level purchasing executives indicated that effective communications may be an antecedent variable to successful supplier development . Newman and Rhee (1990) noted.53 customer” (p. Other research emphasizes the need to improve the communication activities to ensure suppliers clearly understand customers’ expectations (Forker et al. p. Friday-Stroud. & Shivers-Blackwell. p. based on case study research. 1999. Wisner. and cross-functional support are important to an organization focused on supply-base reduction. good information systems. Lambert and Knemeyer (2004) noted as the level of partnership grows. 34). Narasimhan et al. 2006.. “SCM is facilitated greatly by the latest in communication technologies. such as electronic data interchange (EDI) and the Internet. In quantitative research by Easton (2000). Petersen. 2001). Based on a survey response from 386 purchasing executives. Krause et al. Sako (2004) posited that higher levels of information exchange between organizations in a supply chain lead to lower inventories and higher levels of customer satisfaction. “Effective communication skills are indispensable skills for a project manager to possess” (Sutterfield. and Monczka (2005) asserted that collaborative planning sessions have a positive impact on supply chain performance. that effective communications is a key element to successful supplier development results. 57). Ragatz.. 6).. 2003. Ogden (2006) showed that top leadership support. which facilitates quick communication and end-user consumer demand to the upstream stages of the supply chain” (Basnet. 2001. Corner. & Tan. there was not a significant relationship between information exchange and supplier capabilities. the need for greater communication also increases. Forker & Mendez.

Goals establish organizational priorities and represent the foundation of . internal integration. 2002. Monczka et al. Taj & Berro. external integration with suppliers. Petersen et al. 2004.. and traditional systems to communicate information are essential to effective collaboration. Tan (2002) explained that managers must invest to improve information exchange capabilities and advancements in electronic media to make communications more possible. (2005) concluded based on research that supply chain managers and suppliers should be linked. the level of trust between the buyer and the supplier has an impact on the level of collaboration (Petersen et al. Lasch and Janker (2004) posited top-performing suppliers should be integrated in the buying organization to foster greater levels of collaboration and cooperation.). Sanchez-Rodriguez et al. p. Additionally. Paulraj and Chen’s (2007) empirical research on logistics activities of over 200 firms found that exchange of information through interfirm communication is an essential condition for realizing the potential benefits of collaborative relationships. Understanding of Goals Understanding of goals was selected as a variable for the research due to the numerous authors advocating its importance in successful supplier development processes (Krause & Scannell. “Supply chain integration: information sharing. 2006). 2005. Dunn and Young (2004) posited based on case study research that collaborative relationships are necessary to achieve the lowest total cost. 384).54 results. (2002) noted that an important aspect of a collaborative relationship is the ease of information exchange and a commitment to one another’s success. external integration with customers plays a significant role in the overall success of a business” (Zailani & Rajagopal. Sako. 2005.

Research showed that specific and difficult goals lead to higher performance versus having no goals (Lee. Bobko. on-time. 1995). Lindsay wrote.. Researchers indicated that supply chain leaders are building closer relationships. 2005). Krause. including a greater understanding of goals with important suppliers (Burt et al. Wagner. Since the intense global competition during the 1980s and 1990s. improving quality. Nelson et al.55 how resources are allocated (Lindsey. referring to the short-term objectives that an organization plans to accomplish to support the achievement of strategic goals. 2005. and ensuring on-time delivery (Krause. quality. 1991). mostly quantitative and they form the basis for allocating resources” (Lindsey. A premise of the current research was that organizations are placing greater strategic importance on supplier development processes (Sanchez-Rodriguez et al. Goals may fall into two classifications: strategic goals and operational goals. For purposes of the current research. Earley. Krause noted that buying–supplier relationships in the United States are moving ... “There must be both organizational and individual commitment to the strategy and the goals that derive from the strategy” (p. supply management professionals have emphasized a focus on keeping costs low. 9). & Locke. 9). 2003. p. 9). the operational classification of goals was utilized. p. and on-strategy leads to greater depth in business case development and higher levels of performance. “Strategic goals are the long-term results that an organization seeks to achieve in pursuing its purpose” (Lindsey. 2006). 1989). 2002. Monczka et al. Norrie and Walker (2004) posited that a balanced scorecard consisting of measures on budget. “Operating goals are normally one year or less.. Shepherd and Gunter (2006) suggested based on research that purchasing organizations need to adopt a systemic approach to supplier performance measures including effective feedback.

566). Monczka et . obtain improvement targets through a formal supplier evaluation. 1995. 2003. Krause and Ellram (1997) concluded in research that organizations can improve suppliers’ performance by demanding more and clearly communicating expectations. The research also indicated that in an organization with little oversight. 1989). “Overall. (2006) reported. Krause. p. and dramatically reduce both order cycle time and inventory levels” (p. Maltz’s (1998) case study analysis showed that performance of an electrical firm improved significantly by inviting distributors on-site. Doolen et al. Supply chain management research indicated that ineffective measurement criteria to objectives or goals may impede supplier development results (Dunn & Young.56 from traditional transactional relationships to relationships with more cooperation and collaboration to achieve specific objectives. move toward JIT production. goal communication was also low (Lindsey. 26). “Good supplier measurement systems allow companies to improve quality. 2004). opening a clear communication path for expectations and a clear objective to be involved in supplier improvement efforts. communicate goals to suppliers and provide feedback about performance improvements regularly” (Wagner. Level of Supplier Participation Understanding the level of supplier participation by the selling firm was selected as a variable for the research due to the numerous authors advocating its importance in successful supplier development processes (Burt et al. Empirical analysis by Watts and Hahn (1993) showed the importance of establishing clear goals and objectives in relation to executing a successful supplier development program.. firms should plan direct supplier development measures thoroughly. 2006.

In line with these findings. that the goal is important and that the senior manager is serious about it” (Lindsey. and status. 1989. 1995). Burt et al. “Resource allocation clearly testifies to people throughout the organization. 2005). Purchasing plays a key role in spanning functions by fostering relationships and communication to improve quality performance for both the supplying and the buying firm (Paulraj & Chen. p. 211). power. (2003) reported world-class supply chain management organizations dedicate resources to work hand-in-hand with supplier personnel to develop supplier capabilities.57 al. (2002) presented a process map for supplier development that includes cross-functional support and monitoring the project to ensure success. Easton (2000) showed where supply chain leadership dedicated greater resources to spend more time at suppliers’ locations as a result of greater supplier development results. 2002). Monczka et al. Empirical analysis of 527 high-level purchasing executives indicated support of top management and cross-functional effort are antecedent variables to successful supplier development results (Krause. Emiliani (2000) pointed out that a key to Honda’s supplier development . Burt et al. Nelson (2004) determined two key elements: (a) lean supplier development requires an organization to invest in talent and resources with knowledge in activities to improve a supplier’s performance and (b) the activity requires a long-term commitment by the leadership of the organization. Lindsay noted that resource allocation to specific strategies communicates to others within the firm where priorities have been positioned and conveys authority.. (2003) offered a generalized process for supplier development projects that emphasized the importance of the buying firm making available to the supplier personnel such as engineers to assist the team in achieving results.

Coordinator’s Presence Understanding the level of coordinator’s presence was selected as a variable for the research due to the numerous authors advocating its importance in successful supplier development processes (Burt et al. . 2003). 2006. 214). 2002. Trent. (2000) noted to avoid the pitfalls of poor supplier development results. 2002).. reduce time delay in delivery. Monczka et al.. improved quality.. Chu and Fang (2006) explained trust is an important factor in fostering commitment between the buying firms and the supplier organization. Handfield et al. Wagner. p. and reduced developmental costs. Easton. Trent (2004) reported organizations should focus on areas such as measurement and evaluation as one of the characteristics in the foundation to pursue progressive supply strategies.58 program is its commitment to provide adequate resources that are trained to execute improvement projects. noted supplier top leadership support is a major factor in the success of supplier development efforts. 2004. Monczka et al. 2000. the execution process should include a priority to achieve supplier leadership commitment. The joint agreement should specify the roles and responsibilities of each party in the execution of the project (Monczka et al. 2003. In the process map for supplier development. it is important for the supplier firms to be willing to appoint a champion. “Joint operational improvement activities could avoid unnecessary changes in design. emphasized the importance of reaching agreement on the key project and securing the joint resources to execute. Wagner asserted that supplier participation in buying firms may lead to lowering costs. and achieve better quality” (Lo & Yeung. Based on a review of literature. Handfield et al. improve production scheduling. Easton (2000) reported to maximize results of supplier development efforts.

. 2003).59 Burt et al. Ogden.. the assignments and roles should be documented to ensure there is an understanding of the responsibilities for various activities (Burt et al. 2000). & Cooper. Research into this factor provided insight into what prerequirements may be necessary to initiate a supplier development process. the interviewed managers emphasized that ‘real’ SCM cannot deliver exceptional value without the highest levels of managerial commitment both within their companies as well as up and down the supply chain” (Fawcett. This new breed of leadership is tasked with being able to influence and inspire followers with a clearly articulated vision of new goal achievement (Leonard. (2003) revealed the use of a charter as a supplier development enabler. organizational understanding of goals is also high (Lindsey). Goals establish organizational priorities and represent the foundation of how resources are allocated. 2003). “Overwhelmingly. Lindsey (1989) noted that organizational resources are allocated based on the priorities of the organization. Within the charter. Hartley and Choi (1996) reported that organizations with the focus of cooperative participation in a supplier development activity may achieve greater results than suppliers . Research indicates that where management follow-up and oversight is high. Supplier Leadership Attitude The state of commitment of the suppliers’ top leadership at the initiation of the supplier development activity may have an impact on the level of results achieved (Handfield et al. 24). Magnan. Easton (2000) determined based on a survey utilizing one customer firm and 74 supplier and customer survey responses that suppliers that appoint a coordinator for the supplier development process achieve higher levels of execution of the knowledge learned through supplier development activities. p. 2006.

indicating that the more positive attitude by the supplier’s leadership. the more supplier capability improvement occurred. & DiStefano. 2003). Easton (2000) conducted empirical research in which 86 suppliers were analyzed. the commitment to achieving successful supplier development may increase. “Strong. and Vonderembse (2005) advocated that supply chain management capabilities should be viewed as an aid to obtaining a competitive advantage. . One of the factors for success identified by the Tyson–Wendy’s partnership was the need for communication at upper levels (Lambert & Knemeyer. DiStefano. Lim. Tracy. selecting suppliers that provide the most return on investment may be of importance to the supplier development process. Dependency on Buying Firm As the level of dependency of the supplier firm increases on a customer firm. (2006) noted. 34). Doolen et al. Because limited resources are available to any supplier development effort. Easton (2000) posited based on empirical research that there is a positive relationship between the dependency level of the supplier on the customer firm and the actual execution of the knowledge learned through supplier development activities.60 coerced into the activity. Whitfield and Landeros (2006) purported organizational culture may contain barriers that hinder the buyer and suppliers from contributing ideas. 2004). Organizational performance may be attributed to the leadership setting clear goals and long-term business strategies directly related to projects (Boehnke. Bontis. collaborative relationships with suppliers combined with shared strategic objectives are crucial to ongoing success in supply management” (p.

Conclusion The literature review involved an examination of recent articles. Easton. communications. McHugh. and Mclvor (2003) reported organizations may want to diversify the customer base to avoid the domination. 2003). supplier incentives. supplier dependency on the buying firm. 2005). delivery. Improvements in areas such as quality. trust. 2000. Bates and Hollingworth (2004) noted powerful customers may coerce supplier organizations in a manner that is not in the suppliers’ best interest. and . organizations choose to deploy supplier development efforts (Burt et al. Research determined that factors such as defining clear goals and objectives. measurement system. Humphreys. Krause et al. the less likely supplier development results will be achieved. and research related to supplier development.61 Conversely. 2006). A survey of 69 suppliers to a customer firm indicated firms may engage in relationships contracting in order for the customer to have the power to coerce the supplier (Bates & Hollingworth). Krause & Ellram. cost. 2000. and commitment have relationship with results from supplier development practices (Dunn & Young. Watts & Hahn.. books. The research showed that coercive power may also be applied in a manner that provides a supportive outcome to the supplier (Bates & Hollingsworth). Supplier development is an activity where the supplier and buying organization invest resources to improve performance and should be viewed as a win– win relationship (Kocabasoglu & Suresh. 1999. To improve performance. 1997. Research indicated a strong justification for supplier development activities based on improved organizational results (Sanchez-Rodriguez et al.. 1993). Easton’s research indicated that the less dependent a supplier is on a customer firm. supplier-appointed leadership. supplier assessments. 2004..

an overview of the rationale for supplier development. The research provides insight into the following question: Is there a significant relationship between the factors of the level of (a) information exchange. The definition of success is performance improvements in a supplier’s value proposition in the areas of quality. Organizations operate with limited resources to apply to activities such as supplier development. (e) coordinator presence. supplier participation level by the customer firm.. the chapter offered a definition of supplier development for the study.. leadership attitude of suppliers’ coordinators presence. (d) supplier leadership attitude. and a conceptual review of the factors in the research model. and technology? Summary Chapter 2 included a review of literature that is relevant to the issues related to supplier development. delivery. The research study involved an investigation of variables to determine the extent of the relationship between independent variables and successful supplier development results. and technology that enhance the ability of the buying firm to compete in the market (Burt et al. and the effect leadership’s . cost. 2003). delivery. 2002). cost.62 technology can be achieved through supplier development activities (Monczka et al. More explicitly. (b) understanding of goals. understanding of goals. and (f) supplier dependence on the buying firm and the dependent variables of supplier development results in the areas of quality. The conceptual framework for the research relates to the impact of information exchange. level of dependency the supplier firm has on the customer firm. a conceptual model for the execution of supplier development. (c) supplier participation. a summary of research on supplier development and supply chain management.

form cross-functional teams. three alternatives can be pursued: (a) bring the outsourced item in-house and produce it internally.63 attitude has on supplier development results. meet with supplier’s top management. . Handfield et al. has implications to the factors studied in the current research. noted if a firm is dissatisfied with a suppliers’ performance. 2004. or (c) help improve the existing supplier’s capabilities (p. Krause et al. The approach offered by Handfield et al. 2).. (2003) determined that buying firms may execute supplier development approaches in an attempt to improve a supplier’s performance. 2005). 2000. (2000) for the execution of supplier development includes a seven-step approach. 2004. noted buying firms should identify critical commodities and suppliers. “supplier development is defined as the transfer of resources for the purpose of improving the supplier’s performance and capabilities” (Easton. Sako. Alternate approaches and supporting research were also reviewed to ensure greater understanding of supplier development activities.. p. Handfield et al. research supporting the approach was reviewed. conveying important findings related to the research conceptual model. and monitor the project to achieve successful supplier development results. For the purpose of this research. define the details of the supplier development agreement. The rationale for supplier development is well-documented in literature (Dunn & Young. Extensive research from the 1980s to the present revealed important factors to consider when executing a supplier development approach. In addition. define key projects. A conceptual model developed by Handfield et al. (b) re-source with a more capable supplier.. 37). Burt et al. Handfield et al. 2000. 2000. Sanchez-Rodriguez et al.

presence of a coordinator. suppliers’ leadership attitude. Advancement in quality. The major supplier development research was reviewed.. Krause.. 2003.64 Supply chain management refers to the activities undertaken by the buying firm to manage all actions connected from the raw material through the transformation processes to the final product (Monczka et al. This chapter included an examination of the major variables and their interrelationship in .). Although there is little empirical evidence. cycle times. Additional case study research conducted by Dunn and Young (2004) indicated that ineffective measurement criteria may be a key obstruction to supplier development results.. and supplier dependency on the buying firm may be important factors for successful supplier development results. supplier firm participation. Nelson et al. and technology can be achieved through proper supply chain management (Monczka et al. understanding of goals. organizations need capable suppliers to meet customer demands (Burt et al. 2002). 2001). Monczka et al. including earlier research by Newman and Rhee (1990) utilizing a case study approach of NUMMI and its suppliers. With purchased parts being an estimated 50 to 60% of the total cost of a saleable product. the supplier development literature revealed that information exchange. organizations are paying more attention to the supply base (Burt et al. 1995. Quantitative research by Krause and Ellram (1997) and Easton (2000) revealed that top leadership support and buying firms’ positive attitude are important to successful supplier development efforts. Hahn et al. cost. (1990) noted that supplier development programs range from developing suppliers when none exists to activities that improve existing suppliers’ capabilities and performance. delivery... In a competitive market. 2003. 2002).

65 supplier development. Chapter 3 covers the research design, appropriateness of the design, research questions, and other methodological issues.

66 CHAPTER 3: METHOD The purpose of the current correlation and multiple linear regression analysis research study was to analyze the relationship between the independent variables of (a) information exchange, (b) understanding of goals, (c) supplier participation, (d) supplier leadership attitude, (e) buyer firm’s coordinator presence, and (f) supplier dependence on buying firm with the dependent variables of supplier development results in quality, delivery, cost, and technology advancement. Chapter 3 covers the independent and dependent variables, hypotheses, research design, data collection methodology, and data analysis methods used to answer the research questions. The research methodology describes the methods used to collect data on the factors that may have a relationship to supplier development results in the areas of quality, delivery, cost, and technology. The intent of the research was to study the relationship between the independent and the dependent variables. Research Design The relationship between the independent variables and supplier development results was studied to understand their relationship. For the purpose of the current research, “supplier development is defined as the transfer of resources for the purposes of improving the supplier’s performance and capabilities” (Easton, 2000, p. 2). Chapter 2 included a review of literature on the steps to execute supplier development and factors that may be attributed to successful execution. “The evolution of the purchasing function’s importance within the organization and the evolution of the buyer-supplier relationship have occurred, in part, because buying firms increasingly recognize the potential contribution of their suppliers’ performance to their own competitive position”

67 (Krause, 1995, p. 1). Firms engaged in supplier development activities expect to see improvements in areas such as quality, delivery, cost, lead-time, and technology effectively enhancing the value propositions of the buying firm (Burt et al., 2003). Appropriateness of Method Carter and Ellram (2003) noted supply chain management research has progressed from case study analysis to hypotheses testing of the normative literature. A quantitative approach was appropriate due to a desire to numerically answer the research questions and the objective to test theory found in the literature. A quantitative research method using a multiple linear regression design was the preferred methodology for conducting the study. “Multiple regression analysis is most commonly used to determine how one factor called the dependent variable, for example wages, is influenced by another factor or set of factors called the independent variable(s), for example job qualifications” (Moore & Braswell, 1989, p. 253). The method utilizes quantitative data to statistically evaluate the relationship of the dependent and independent variables (Aczel, 2002). Research in supplier development can only be executed in a social setting. Therefore, there will remain influences determined by chance (Moore & Braswell; Pedhazur, 1997). “Multiple regression is a way of dealing with these difficulties” (Moore & Braswell, p. 254). When multiple regression analysis is used to study a relationship, the independent and dependent variables must be defined (Aczel, 2002). The multiple regression method allowed the researcher to evaluate the relationship between the independent variables of (a) information exchange, (b) understanding of goals, (c) supplier participation, (d) supplier leadership attitude, (e) buyer firm’s coordinator presence, and (f) level of

68 supplier dependence on buying firm with the dependent variables of supplier development outcome in the areas of quality, delivery, cost, and technology. The intent of the analysis was to determine the statistical relationship between the independent variables (a-f) and the dependent variable (supplier development outcome). “This method of statistically controlling for the simultaneous effect of numerous factors often constitutes the best available substitute for controlled laboratory experimentation” (Moore & Braswell, 1989, p. 254). Figure 3 represents a model for the research project.
Supplier Organizational – Independent Variables a. Level of information exchange b. Level of understanding of goals c. Level of participation d. Level of supplier leadership attitude e. Level of coordinator presence f. Level of suppliers’ dependence on the buying firm The survey data will be separated based on the focus of the supplier development activity (quality, delivery, cost, or technology). The data will be analyzed using correlational and multiple regression analysis. Supplier Development Outcome – Dependent Variables 1. Quality Performance 2. Delivery Performance 3. Cost Savings Performance 4. Technology Development

Figure 3. Supplier development research model of independent and dependent variables. Appropriateness of Design The intent of the project was to expand on the qualitative and quantitative research that has been conducted in the field of supplier development to gain a greater

and technology. (d) supplier leadership attitude. (c) supplier participation. delivery. (c) supplier participation. (b) understanding of goals. The research study involved using a multiple regression analysis design to accomplish the primary objective of determining the extent of the relationship between the independent variables of (a) information exchange. A multiple regression analysis approach utilizing data mining and a survey instrument was deemed the most appropriate research method to accomplish the goal of the study.69 understanding of factors that may impact supplier development results. cost. Research Questions and Hypotheses One primary question drove the research. and (f) supplier dependence on buying firm and the dependent variables of supplier development results in quality. Is there a relationship between the independent variables of (a) information exchange. (e) coordinator presence. and technology advancement? The following research questions were investigated through the research: Research Question 1: What relationship does the suppliers’ level of information exchange have with the outcome achieved from a supplier development activity? Research Question 2: What relationship does the suppliers’ level of understanding of the goals have with the outcome achieved from a supplier development activity? . Tables 1 and 2. provided a summary of the qualitative and quantitative research conducted on supplier development. and (f) supplier dependence on buying firm and the dependent variable of the supplier development outcome in the areas of quality. cost. which were reviewed in chapter 2. (b) understanding of goals. delivery. (d) supplier leadership attitude. (e) coordinator presence.

and (d) technology. delivery. and (f) supplier dependence on buying firm collectively have with the outcome achieved from the supplier development activity? The research questions were applied in four groups based on the focus of the following supplier development activities (dependent variables): (a) quality. cost. The following hypotheses derived from the literature review in supplier development: H10: There is no relationship between the suppliers’ levels of information exchange and the supplier development outcome in the areas of quality. (d) leadership attitude. and technology. H1a: Higher levels of supplying firm information exchange will result in higher levels of supplier development outcome related to quality. . (c) participation.70 Research Question 3: What relationship does the suppliers’ level of participation have with the outcome achieved from a supplier development activity? Research Question 4: What relationship does the suppliers’ leadership attitude have with the outcome achieved from a supplier development activity? Research Question 5: What relationship does the buying firm’s level of presence of a coordinator have with the outcome achieved from a supplier development activity? Research Question 6: What relationship does the suppliers’ level of dependence based on percentage of the suppliers’ sales revenue to the buying firm have with the outcome achieved from a supplier development activity? Research Question 7: What relationship do the level of (a) information exchange. delivery. (e) buying firm’s coordinator presence. (c) cost. cost. (b) understanding of goals. (b) delivery. and technology.

and technology. and technology. cost. delivery. delivery. and technology. H5a: Higher levels of assignment of a supplier development coordinator by the buying firm will result in higher levels of supplier development outcome in the areas of quality. cost. and technology. cost. cost. H4a: Higher levels of the suppliers’ leadership attitude will result in higher levels of supplier development outcome related to quality. delivery. . cost. cost. and technology. delivery. delivery. H50: There is no relationship with the level of assignment of a development coordinator from the buying firm and the supplier development outcome in the areas of quality. and technology. delivery. and technology. cost. delivery. cost. and technology. H60: There is no relationship with the suppliers’ level of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) and the supplier development outcome in the areas of quality. delivery. H40: There is no relationship with the level of suppliers’ leadership attitude and the supplier development outcome in the areas of quality. delivery. H3a: Higher levels of suppliers’ participation will result in higher levels of supplier development outcome in the areas of quality. H2a: Higher levels of the suppliers’ understanding of the goals will result in higher levels of supplier development outcome in the areas of quality. H30: There is no relationship with the suppliers’ level of participation and the supplier development outcome in the areas of quality.71 H20: There is no relationship between the suppliers’ levels of understanding of the goals and the supplier development outcome in the areas of quality. and technology. cost.

and technology. and (f) suppliers’ dependence on buying firm will result in a higher supplier development outcome in the areas of quality. and technology. (e) buying firm’s coordinator presence. (c) supplier participation. The scope of projects completed between January 2005 and February 2008 was the target projects for this research. cost. delivery. delivery. (e) buying firm’s coordinator presence. (b) understanding of goals. The projects was limited to this period due to the availability of results and the belief that supplier development engineers have greater ease in recalling . When data were required from managers. Population and Sampling Frame The research study involved gathering data from the total population of 42 supplier development engineers and supply chain professionals who have executed supplier development projects between January 2005 and February 2008 at a large automotive supplier. H7a: Higher collective levels of (a) information exchange.72 H6a: Higher levels of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) to the buying firm will result in higher level of supplier development outcome in the areas of quality. (d) leadership attitude. and (f) suppliers’ dependence on buying firm and the supplier development outcome in the areas of quality. an informed consent form was provided for signing (see Appendix B). cost. H70: There is no collective relationship with the level of (a) information exchange. delivery. Meetings were held with all supplier development managers and supplier development engineers to introduce the research and ensure a clear understanding of the projects targeted for the research. cost. and technology. (b) understanding of goals. (c) supplier participation. (d) leadership attitude.

delivery. The population consisted of initially 42 supplier development engineers and supply chain professionals who have led supplier development projects.73 the level of the independent variables and information data bases for the results achieved related to the supplier development activity. and technology completed between January 2005 and February 2008. This .5% precision utilizing the finite population corrected for proportion suggested by Israel (1992). For this research a sample size of 29 was achieved for data analysis. Supplier development engineers helped identify projects in the area of quality. The sample size targeted was to achieve participation from 38 supplier development engineers in order to produce results with a statistical confidence of 5% and +/. The approach enabled the researcher to statistically analyze data using correlation and multiple regression analysis results in comparison to the independent variables from the supplier development activity (Pedhazur. The research was limited to a single large automotive parts customer to reduce the potential influence of other variables such as the industry. and technology with a supplier organization. cost. The advantage of using this population was that the approach targeted supplier development activities where a supply chain professional worked directly with a supplier to execute an improvement project. Supplier development engineers were encouraged to complete a survey for each project completed. cost. The population represented supplier development engineers who entered into supplier development activities with a single large automotive customer (buying organization) with the intent to improve performance in the areas of quality. delivery. 1997). and culture on the results of the research. competitive environment.

Participation was requested from supplier development engineers who led an activity and had knowledge to answer the research questions. This issue is discussed in chapter 5 in the limitation of the research. meetings took place with supplier development engineers and managers to review the pre-notification survey letter (see Appendix C). they could do so without penalty or loss of benefit. the supply chain professionals were asked to complete a survey instrument for each project completed between January 2005 and February 2008. (d) how confidentiality of participants and suppliers names was protected. (c) that participation was strictly voluntary. and (g) the survey instrument (see Appendix E). and Data Collection Prior to distribution of the informed consent form and survey instrument. Confidentiality.74 produces results with a confidence level of 90% and +/.10% precision. Potential participants were informed that the participation was voluntary and if they chose not to participate or to withdraw from the study at any time. During this phase. Informed Consent. (f) the informed consent form (see Appendix D). (e) that the survey had no right or wrong answers. Participants were requested to electronically type their name in the informed consent form (see Appendix D) and return it with the completed survey or surveys. Research participants were requested to complete the informed consent form and survey instrument after the manager and supplier development engineer introductory . The purpose of the meeting was to introduce the research project to the supplier development engineers and managers to explain (a) the organization’s leadership approval to conduct the research (see Appendix A). as well as to request the supplier development engineers to participate in the research. (b) the intent of the research.

The participants were required to electronically sign the informed consent form (see Appendix D) prior to completing the survey to acknowledge consent to participate in the research. and the Supplier Development Survey (see Appendix E). It was expected that the number of projects reported would be higher in North . The suppliers and supplier development engineers were located in all regions. If a participant refused to participate in the research study. The package included an informed consent form (see Appendix D). the data was transferred to a spreadsheet for statistical analysis. The completed survey was placed in a secure location to ensure the confidentiality of participants and suppliers was and continues to be protected. The informed consent form was to be returned with the survey instrument. The research survey linked a supplier development project with a specific supplier development engineer. Excluding the information assisted in protecting the confidentiality of the participants and suppliers. Once a survey was returned. The letter also explained the data would be used in aggregate form. Research participants then received the survey via the Internet. The participants and suppliers name was excluded from the spreadsheet.75 meeting. ensuring the names of the organization and participants would be protected and remain confidential. there were no adverse implications personally or professionally. Geographic Location The sampling plan consisted of all supplier development engineers who had completed a supplier development project between January 2005 and February 2008. The informed consent form advised the participant of the focus of the study and the method to ensure privacy and explained to each participant that consent to be a research participant was strictly voluntary. The survey consisted of a series of questions related to the variables being studied.

76 America. This was due to the limited number of supplier development activities executed within the European and Asia Pacific region. we would like to have an r2 that explains 80 percent or more of the variation. b represents the slope. p. 2003. 257). The large automotive supplier has locations globally with supply chain professionals in all regions. The research results contain an outline of the level of supplier participation by region. Typically. the coefficient of determination (R2) explains the level of variation in the dependent variable that can be accounted for by the variation in the independent variables (Moore & Braswell). (b) understanding of goals. Taken collectively. (c) . the greater the explanatory power of the equation (Moore & Braswell). . 1989. and Y represents the output or dependent variable (Aczel. and “the resulting regression equation can be evaluated in terms of its ability to explain the variation in the dependent variable Y” (Moore & Braswell. bnXn + u. It is also an important indicator of the predictive accuracy of the equation. p. 2002). X represents the values of the independent variables. Data Analysis Multiple regression model is represented as Y = a + b1X1 + b2X2 + . (Cooper & Schindler. 590) The r2 value can be between 0 and 1. No supplier development engineers or supplier development projects were excluded from the research due to geographic location. The multiple regression model is estimated based on the data. The research examined whether a significant relationship exists between the independent variables of (a) information exchange. . The higher the r2 value. As a measure of linear relationship. it [the analysis of variation table] tells us how well the regression line fits the data.

. 2003). data level. . and scale utilized for the research. cost. and technology development. delivery. The following question represents a phrase completion scale: I read literature about supply chain management . and (f) level of supplier dependence on buying firm and the dependent variables of results achieved through the supplier development activity in the areas of quality.Everyday without fail 8 9 10 Tables 3 and 4 represent a summary of the independent and dependent variables. .Never 0 1 2 3 4 5 6 7 10 . (d) supplier leadership attitude. (participant selects a number 1-10 representing the level the person reads supply chain management literature) 0 .77 supplier participation. Ratio data can be achieved using a phrase completion scale (Hodge & Gillespie. (e) coordinator presence. The independent and dependent variables were measured using ratio phrase completion and ratio type scales.

Hodge and Gillespie (2003) noted that a phrase completion scale offers an improved method over a Likert-type scale to provide higher reliability coefficients and stronger factor loading. Level of supplier leadership attitude e. Level of coordinator presence Ratio Ratio (PC) 0 (no leadership support) to 8 (total leadership support) (9-point scale) % of time supplier coordinator spent managing the project f. Levels of buying firm information exchange b.78 Table 3 Independent Variables With Data Level and Scale Independent variable name a. Ratio % of sales to customer firm . Level of understanding of goals c. Level of supplier dependence on buying firm Note. Level of supplier participation Ratio Ratio (PC) Data level Ratio (PC) Scale 0 (no information exchange) to 8 (all information exchanged) (9-point scale) 0 (no understanding of goals) to 8 (total understanding of goals) (9-point scale) Number of supplier departments involved in project d. PC = phrase completion.

The regression analysis allowed the researcher to identify the independent variables that have statistical significance in correlation to successful supplier development results. direction. Data were also analyzed through a comprehensive analysis of variance (ANOVA) table. it does not come from a designed experiment but rather is a convenient-form summary table of the regression analysis. the form. In addition. and magnitude of the association with the independent variables were analyzed. If a relationship did exist. While it is the form of a traditional ANOVA table. which is the output by most statistical software which fits the multiple regression model. The research objectives were accomplished utilizing Pearson correlation coefficients developed in a correlation matrix table. In addition. PC = phrase completion.79 Table 4 Dependent Variables With Data Level and Scale Dependent variable name Quality Delivery Data level Ratio Ratio (PC) Scale % of first-time quality improved 9-point scale (phrase completion): 0 (no improved delivery performance) to 8 (all parts delivered on time) Cost Technology Ratio Ratio (PC) % of annual purchase value saved 9-point scale (phrase completion): 0 (project did not meet targets) to 8 (project met all targets) Note. the F test for overall regression provides statistical . multiple regression analysis was utilized to evaluate the relationship of the collective independent variables with the dependent variables.

Multiple regression analysis allows researchers to use inferential statistics to examine the relationship of the dependent and independent variables (Cooper & Schindler. 365) to interpret p values. p Value. Table 5 Modified Table to Show the Triola. 1997). A p value determines the overall significance of a multiple equation (Triola. and Interpretation p value Less than 0. “A small P-value signifies that a particular multiple regression equation has good overall significance and is valuable for making predictions” (O’Leary.01 to 0.80 support for accepting or rejecting the null hypothesis for each of the four dependent variables. Qualitative research typically seeks to explore an area of interest to develop theories and would not meet the objective of the current study (Creswell. p. . 2003). Table 5 shows a modified scale provided by Triola (p. 75).01 Interpretation of results High statistical significance of variable Very strong evidence against the null hypothesis 0.05 Statistically significant of variable Adequate evidence against the null hypothesis Greater than 0. The research objective was to quantitatively evaluate the levels of independent variables in relationship to the dependent variable. 2003.05 Insufficient evidence against the null hypothesis A qualitative research method was not chosen because of the study’s objective on evaluating the relationship between the independent and the dependent variables identified during the literature review. 2003).

and Instrumentation When examining instruments for possible inclusion in a research activity. Reliability. and they should be consistent” (p. The survey instrument was developed to execute this research utilizing past research instruments. (b) how recent the instrument was developed. Content and criterion validity were addressed based on a review of the survey instrument by supplier development professionals and two individuals with a doctoral-level . The survey consists of scales that represent the independent variables while the buying firms’ performance criteria represent the dependent variable.81 Validity. Cronbach’s alpha was calculated based on the initial survey results. Only after the values were considered acceptable was the survey used to complete the research. Existing scales were utilized when possible. Creswell (2003) noted. 183). 180). they should be free from sources of measurement error. An examination of past research related to supplier development showed there was no existing survey instrument that could be utilized to address the research questions. Creswell (2003) suggested the following factors should be considered: (a) information related to the reliability and validity of scores from past uses. According to Creswell (2003). “Validity means that researchers can draw meaningful and justifiable inferences from scores about a sample or population” (p. The results were evaluated prior to expanding the survey to other participants. However. several scales were developed through adaptation of existing research questions based on a buyer firms perspective versus a suppliers perspective. (c) the extent the instrument has been used and cited in past research. “Reliability means that individual scores from an instrument should be nearly the same or stable on repeated administrations of the instrument. and (d) the availability of reviews for the instrument.

(e) >$10 million to $50 million. delivery. and (h) >over $500 million. (g) >$100 million to $500 million. Each modification required the content and criterion validity outlined above to be reevaluated until the instrument was deemed statistically reliable and valid.000. cost. The following demographic information in Section 1 of the survey instrument was collected utilizing the survey instrument: 1. 3. Values were collected on the dependent variables in Section 1 of the survey . The data were collected from databases from supplier development engineers and supply chain professionals. Primary product or product line supplied by supplier development engineer. and technology. Focus of supplier development activity: quality. Annual supplier sales revenue: supply chain professional. Region of manufacturing location: Supplier development engineer. Data were grouped into eight areas: (a) Less than $500. (c) >$1 million to $5 million.000 to $1 million. 2. (d) >$5 million to $10 million. Data was retrieved by the supply chain professional assigned to the project. The survey instrument was modified until acceptable results were achieved. 5.82 completed education with a professional focus on supply chain management. The date the supplier development project was concluded. The criterion for acceptance was agreement by the supply chain professional and two individuals with doctoral-level education with a professional focus on supplier development that the survey instrument asked valid questions and the reliability of the instrument was acceptable based on Cronbach’s alpha. 4. The source of data was the supplier development engineer. (f) >$50 million to $100 million. (b) >$500.

Cost: Percentage of annual purchase value saved calculated by the value saved divided by the total annual purchase value. The source of the scale related to level of understanding of goals can be seen in Table 7. The following sections discuss each variable studied. In the first section. 2. 3. Deliver: 9-point scale (phrase completion) from 0 (no improved delivery performance) to 8 (all parts delivered on time). delivery. The supplier development engineers then proceeded to Section 2 of the survey instrument. One independent variable received a score based on data mining techniques.83 instrument. . the improvement would be 5% divided by the 10% (gap) resulting in a 50% first-time quality improvement. For the area noted. The source of scales of information exchange can be seen in Table 6. the supplier development engineer identified the focus of the supplier development activity. cost. the following scores were identified from the supplier development engineers’ files: 1. Technology: 9-point scale (phrase completion) from 0 (no execution of technology development project) to 8 (total success of technology project). 4. Example: If the first-time quality improved from 90 to 95%. This section focused on the remaining information required related to the independent variables. Quality: Percentage of first-time quality improved. and technology. Information on past supplier development activities had been collected by the supplier development engineer that summarized the results related to quality. The value of the supplier’s dependence on the customer firm was scored using the percentage of business the buying firm represented based on annual sales.

. “This customer solicits our feedback through a formal forum in which high level of goals and areas in need of attention are discussed” (p. . 100). . . 100) Customer/ supplier formal forums resulted in . . “This customer has encouraged us to provide feedback concerning this supplier development program” (p. Not used research: 0 (no information exchanged) to 8 (all information needed was exchanged) The result of customer visits has been . . 100) “This customer has provided us with meaningful feedback” (p. . “This customer has appeared to utilize the feedback that we provided” (p.84 Table 6 Scale Related to Level of Information Exchange Questions adapted for this Level of information exchange utilizing a 7-point scale from strongly disagree to strongly agree “This customer has visited our facility with the purpose of providing feedback” (p. . . 100). 100) “The performance matrix reports we have received from the customer have been very helpful to us in improving our performance” (p. . . The supplier development activity resulted in . Not used The result of customer communication has been . 100). 100). “We have agreed to the feedback that is provided to us by the customer” (p. The result of the customer score card has been .

201). 102). The survey participants identified the departments involved in the supplier development effort. 102) Note. The following criterion was used by Krause (1995) to identify the level of participation. The departments included purchasing. Based on pre-work prior to the supplier development project the customer and supplier firm had . “We had a good understanding of what the customer expected of us before the implementation started” (p. Quotations are from Easton (2000). 102).85 Note. material management. . Table 7 Scale Related to Level of Understanding of Goals Questions adapted for this research utilizing Level of understanding of goals utilizing a 7-point scale from strongly disagree to strongly agree “We had a good understanding of the criteria that would be used to measure our performance” (p. . . . Quotations are from Easton (2000). “The goals of the program were well outlined to us before implementation was started” (p. . The customer organization had . . an 8-point phrase completion scale: 0 (no understanding of goals) to 8 (total understanding of goals) The criteria used to measure the performance of the supplier development project resulted in the supplier having . “This customer knew exactly what it wanted from the supplier development program” (p. Based on pre-work prior to the supplier development project the supplier has a . of the supplier development project. . . .

Table 8 Scale Related to Level of Understanding of Suppliers Leadership Attitude Questions adapted for this research Level of understanding of supplier leadership attitude utilizing a 7-point scale from strongly disagree to strongly agree “Top leadership was more than willing to participate in the supplier development program” (p. “Since the implementation of supplier development activities. When the suppliers leadership was approached the top leadership demonstrated .86 manufacturing. Note. top management has believed that the programs are a great idea” (p. similar questions were utilized. 97). . . . product engineering. During the execution phase of the supplier development project top leadership demonstrated . utilizing a 9-point phrase completion scale: 0 (no leadership support) to 8 (total leadership support). The number of departments involved in the supplier development project was utilized as the scale for the research. marketing. 97). 97). . “Top management only participates to placate the customer” (p. finance. level of coordinators (buyer firm representative) presence was measured based on an 8-point scale where 0 represents 0% of the time and Top leadership demonstrated through involvement . . quality control. Table 8 shows the source of the scale for level of supplier leadership attitude. . Quotations are from Easton (2000). For purposes of the research. process engineering. . supplier quality. For the purposes of this research. and any other specified.

E-mail was utilized to deliver the survey instrument and a conference call was utilized to explain (a) the organization’s leadership approved the research project. . TDM [tailored design method] consists of five steps which are. The phrase completion question was phrased.87 8 represents 100% of the time. (c) that participation is strictly voluntary. (d) how confidentiality of participants and suppliers names are . p. (Easton.” The level of supplier dependence was calculated using the customer’s annual purchase value divided by the total annual sales of the supplier organization. The Dillman (2000) tailored design method was adapted for data collection. the greater the supplier relies on the customer firm for revenue. 1) sending out a prenotification letter letting the respondent know that a survey will be arriving. 4) a replacement survey and cover letter. . “The supplier coordinator assigned to the program spent . The higher the percentage. This percentage indicates the level of dependency the supplying firm has on the customer. (b) intent of the research. The survey instrument was presented to two supplier development professionals at the buying firm and reviewed by two doctoral-level academics in supply chain management. and 5) a final contact by either phone of some type of priority mailing. 2) and initial mailing of the survey along with a cover letter. 75) The tailored design method was utilized for this research. Based on the feedback the survey instrument was modified in order to improve clarity. 3) a thank you/reminder post card to either thank the person for completing the survey or to kindly remind them to complete the survey. 2000. (scale completion phrase) on the supplier development project.

were identified. lecturer and consultant. Ph. (e) that the survey has no right or wrong answers. The four supply chain professionals who participated in the validation of the survey instrument were excluded from the research.88 protected.M. Pilot Study and the Validity and Reliability of Survey Instrument Due to the limited data available. Robert A. the two educators graciously accepted the assignment to review the survey instrument and provide feedback on the questions for clarity and relevance based on the intent of the research. and clarity. C. highly recognized for supply chain managements knowledge and experience. Handfield. and (g) the survey instrument (see Appendix E). The approach involved enlisting the expertise of two educators to evaluate the survey instrument for validity. and request the supplier development engineers to participate in the research. Two academic practitioners.P. Four supply chain professionals were also selected from the organization used in the research and agreed to provide feedback on the survey instrument. Kemp is a “nationally recognized author. . the survey was evaluated by a selective number of participants. reviewed the survey instrument and provided feedback for improvement. [and] his supply management career spans nearly four decades” (Institute for Supply Management. Following the meeting. When contacted. Ph. relevance.D.D.. Kemp. (f) the informed consent form for participants 18 years of age and older (see Appendix D). Four supplier development professionals also answered the survey and offered suggestions to improve the instrument. (Certified Purchasing Manager) and Robert B. 2005. the supplier development engineers were requested to complete the informed consent form by typing their name and filling out a survey for each project he or she completed January 2005 and February 2008.

and supplier development” (Supply Chain Redesign. and two were supplier development engineers. 2). para. Handfield is the “Bank of America University Distinguished Professor of Supply Chain Management at North Carolina State University.. Two of the participants were managers of supplier development engineers.89 para. and is an industry expert in the field of strategic sourcing. What type of information was shared? Both Kemp and Handfield communicated that the survey questions and research had relevance in the advancement of research in supply chain management. supply market intelligence. However. 1). A review of historical records showed that many projects were not well documented and would be missed in the .. i. Their suggestions were used to improve the survey instrument. para. Kemp suggested improvements to the structure of the survey instrument such as ensuring equal spacing of the numerical values with boxes to make it clearer for the participants in answering the questions.e. “Handfield is considered a thought leader in the field of supply chain management. and Director of the Supply Chain Resource Cooperative” (Supply Chain Redesign.d. Only minor changes were suggested on the survey instrument. Handfield suggested reducing the scale used to answer the questions and adding some qualitative questions that may provide insight when analyzing the results. Kemp is recognized for providing assistance and guidance to supply chain professionals (Institute for Supply Management). The four participant’s pilot tested the survey instrument and provided feedback for improvement. n. 6). there were several suggestions made relative to the distribution method. The second evaluation of the survey instrument took place with a team of four professionals experienced in supply chain management who are employed by the organization used for the research.

Cronbach’s alpha is used to measure the proportion of variability in the responses that results from differences in the respondents. (e) buyer firm’s coordinator presence. which is well above the nominal cut-off value of 0. To assess instrument reliability Cronbach’s alpha was computed on the first 25 completed surveys. Correlation and the multiple regression analysis research method were appropriate as the study involved a search to understand the relationship between the independent variables of (a) information exchange.977. The engineers would then send the answered surveys directly to the researcher. Confidentiality of the participants and suppliers was protected by immediately removing their names when inputting the data into a data file of survey results. and (f) supplier dependence on buying firm. The survey distribution and collection method was modified based on the suggestion of the pilot survey participants.70. (b) understanding of goals. (c) supplier participation. Results of this analysis showed the overall reliability of the survey instrument was 0.90 survey distribution. (d) supplier leadership attitude. with the . The managers and the engineers suggested that a meeting should take place where the researcher presented the informed consent form and survey instrument with a request for each engineer to participate in the research by providing completed surveys for the projects he or she led between January 2005 and February 2008. The Cronbach’s alpha calculation was made on the 11 Likert-type scale survey questions. Summary The research study employed a correlation and multiple linear regression analysis to understand the relationship between the independent and the dependent variables related to supplier development results.

The method allowed the factors to be evaluated individually and collectively. The outcome of the current research may provide information to buying firms interested in starting or strengthening a supplier development effort. cost. and technology. .91 dependent variables of supplier development results in quality. delivery.

A lack of understanding of the variables that contribute to successful supplier development efforts may impede the firm’s ability to utilize invested resources effectively to meet customer requirements. (d) supplier leadership attitude. (b) understanding of goals. Supplier development engineers who lacked experience as defined by the supervisor and were acting in an apprentice role were not included in the research. and technology advancement. delivery. Research participants were asked to reflect on their development activities with supplier firms that participated in supplier development activities between January 2005 and February 2008. The results of the study expand the body of knowledge on supply chain management and augment past research by analyzing variables from the perspective of a buying firm. (e) buyer firm’s coordinator presence. (c) supplier participation. .92 CHAPTER 4: RESULTS The purpose of the current quantitative research study was to analyze the relationship between the independent variables of (a) information exchange. Supplier development engineers in some cases answered more than one survey based on leading multiple projects with multiple suppliers. and (f) supplier dependence on buying firm with the dependent variables of supplier development results in quality. Research in the area of supplier development may provide supply chain professionals the knowledge to improve results. Participants in the research led supplier development activities at a supplier to a large automotive component firm. Each supplier development engineer answered the survey with a specific supplier development project in mind. cost. The research involved supplier development engineers from one large automotive component firm.

(b) understanding of goals. (d) leadership attitude. delivery. (c) participation. (b) understanding of goals. (d) supplier leadership attitude. and (f) supplier dependence on buying firm collectively have with the outcome achieved from the supplier development activity? . (e) buying firm’s coordinator presence. (e) buyer firm’s coordinator presence.93 One primary question drove the research: Does a relationship exist between the independent variables of (a) information exchange. and technology advancement? The following research questions were investigated through the research: Research Question 1: What relationship does the suppliers’ level of information exchange have with the outcome achieved from a supplier development activity? Research Question 2: What relationship does the suppliers’ level of understanding of the goals have with the outcome achieved from a supplier development activity? Research Question 3: What relationship does the suppliers’ level of participation have with the outcome achieved from a supplier development activity? Research Question 4: What relationship does the suppliers’ leadership attitude have with the outcome achieved from a supplier development activity? Research Question 5: What relationship does the buying firm’s level of presence of a coordinator have with the outcome achieved from a supplier development activity? Research Question 6: What relationship does the suppliers’ level of dependence based on percentage of the suppliers’ sales revenue to the buying firm have with the outcome achieved from a supplier development activity? Research Question 7: What relationship do the level of (a) information exchange. cost. (c) supplier participation. and (f) supplier dependence on buying firm and the dependent variables of supplier development results in quality.

The research questions were applied in four groups based on the focus of the supplier development activity or project dependent variables related to (a) quality. Chapter 5 includes a discussion on the limitation. Out of the population of 42 supply professionals who received the survey. Sample Selection. The data show the projects reported had a wide distribution of annual sales from . (b) delivery. The supplier development engineers selected the projects to complete the survey instrument. The sample size of 29 out of the population of 42 supply chain professionals produced results with a statistical confidence level of 90% and +/.10% precision utilizing the finite population correction for proportions suggested by Israel (1992). Seven of the 42 supplier development engineers were in transition to other assignments and opted out of the research. Population.94 Pearson correlation coefficients and multiple regression analyses provided data to show evidence if the independent variables individually and collectively correlated to the dependent variables. The supply chain professionals were asked to fill out one survey for each project completed. and (d) technology. Figure 4 shows the number of surveys completed related to supplier annual sales. (c) cost. The development engineers and supply chain professionals completed the survey instrument based on the results of development projects completed at a supplier location. Attempts to increase the level of participation to improve the precision level failed to achieve the desired level of confidence of 95% and +/. and Demographics The population consisted of 42 supplier development engineers and other supply chain professionals working for a large automotive supplier who completed one or more supplier development projects between January 2005 and February 2008. 29 completed and returned data for analysis.5% precision.

000. Number of surveys versus suppliers annual sales in the research data. delivery. $0 $5 to M to < to . Chemical >$ 1 00 M 00 M . The completed surveys showed that the number of supplier development projects reported had 43 related to quality.000.000. with the majority of projects falling in the range of $10.000.000 to $500. and 18 related to technology. 27 related to delivery. Forty-three of the 75 surveys had a single focus and thirty-two had a focus in multiple areas. 35 related to cost. The data show the majority of projects reported were from suppliers that produced metallic components followed by chemical and electrical purchase part areas. Figure 5 shows the distribution by purchase product area. cost. Suppliers Annual Sales in the Research Data 25 20 15 10 5 0 . The data were analyzed for each dependent variable (quality.000 to greater than $500.95 less than $500. forgings.5 M 0M $5 M 0M M M M 00 $5 to >$ 5 $1 0 00 $1 .000. Metallic components include parts from families such as stampings. Number of Surveys Completed Number of Surveys vs. machined parts. The results are reviewed later in this chapter. and castings.5 M >$ 1 0M M 0M to $1 to >$ 5 >$ 1 $0 >$ 5 Annual Sales of Suppliers Figure 4. and technology) for a total of 123 usable survey combinations.

material management (42). supplier quality (28). and gaskets. the functional areas that participated in the workshop were manufacturing (71) followed by quality control (55). Number of Projects per Purchase Part Area 50 Number of Projects 40 30 20 10 0 Metallic Chemical Area of Purchased Part Electrical Figure 5. Asia Pacific. Number of projects per purchase part area. and other (9). The individual did not belong to one functional area. The data showed that of the 75 total projects. and Europe (2). process engineering (53). sales (37). The supplier development engineers identified the functional areas that participated in the projects.96 parts include components such as injection molded. followed by Asia Pacific (23). and North America. purchasing (20). Surveys were received from Europe. The majority of projects (50) were reported from North America. product engineering (41). Electrical components include parts such as wire harnesses and electrical assemblies. . The “other” category was identified as an individual that supported lean activities and reported directly to the leadership of the organization. rubber.

2008. or technology. cost. delivery. (d) how confidentiality of participants’ and suppliers’ names would be protected. (e) that the survey has no right or wrong answers. A meeting was conducted with supplier development managers and engineers to review the research project and explain (a) the organizational leadership’s approval to conduct the research. if no response was received. If an individual indicated he or she did not want to participate. no further . 2008.97 Data Collection Beginning on January 5. it took several meetings to present the data requesting participation in the research. (f) informed consent for participants 18 years of age and older (see Appendix D). The final meeting took place on February 12. Once the meeting took place. The entire supplier development engineer team was targeted for the research with supply chain professionals (managers) who completed projects related to quality. the informed consent form and survey instrument were redistributed to the supply chain professionals with a second request for participation. Supply chain professionals were requested to return the completed survey or surveys within 1 week following the meeting. (b) the intent of the research. After 1 week. (c) that participation was strictly voluntary. Due to the involvement of multiple managers and staffs. and (g) the survey instrument (see Appendix E) and to request the supplier development engineers to participate in the research. the informed consent form and survey instrument were electronically distributed to the participants via e-mail. supplier development managers were contacted to review the research project objectives. The supplier development engineers or supply chain professionals were requested to electronically sign the informed consent form and fill out a survey instrument for each supplier development project they led.

Number of surveys submitted per supplier development engineer. but responses relied on the supplier development engineer or supply chain professional. By contacting the managers of supplier development engineers or the supply chain professionals directly.98 contact with the supplier development engineer or manager was made regarding the research. Figure 6 shows the number of surveys completed per supplier development engineer. All participants were full-time employees of the large automotive supplier being studied. 29 or 69% completed one or more surveys for the research. On March 2. Number of Surveys Submitted per Supplier Development Engineer 14 12 10 8 6 4 2 0 1 2 3 4 5 6 7 8 9 10 Number of Survey Submitted Number of Supplier Development Engineers Figure 6. Some surveys were returned via mail by a supplier development engineer or supply chain professional. all targeted employees in the research were offered the opportunity to participate in the research. The range of returned surveys per participant was between 1 and 10. Survey distribution was controlled by the researcher. . the data collection was deemed complete. The informed consent form and survey instrument were distributed electronically with a request to complete and return via e-mail. Of the population of 42 supply chain professionals. 2008.

.100% delivered on Time Figure 7. The results showed an average 48% improvement in first-time quality. The scores in the chart were modified to a 9-point scale of 1 to 9. to 8. Participants were also encouraged to complete surveys on projects that showed acceptable as well as less-than-acceptable results.No Delivery Improvement 9 .99 Summary of Results Achieved From Supplier Development Projects The participants were encouraged to report on all supplier development projects completed between January 2005 and February 2008. Figure 8 reflects the results from the projects focused on quality in ascending order. Number of Projects with Score 20 15 10 5 0 1 2 3 Average Score was 6. Supplier development projects focused on delivery ranging in performance scores from 0. Figure 7 shows the results achieved from the delivery projects. indicating no delivery improvement. indicating the participants followed these instructions. The data showed a range of results. The figure shows significant improvement was achieved on projects. indicating 100% of product shipped on time. Results of supplier development project focused on delivery. The results from the supplier development projects ranged from 0 to 94%.6 4 5 6 7 8 9 1 .

Supplier development projects focused on technology. Although only 18 projects related to a technology focus. The average score reported was a 6. . Supplier Development Projects Focused on Technology Number of Technology Projects with Score 10 8 6 4 2 0 1 2 3 4 5 6 7 8 9 1 . the scores were modified to a 9-point scale and reflected in Figure 9.100 First Time Quality Improvement from Supplier Development Projects Average Improvement 48% Percent First Time Quality Improvement 100% 80% 60% 40% 20% 0% 0 10 20 30 40 50 Project Number Focused on Quality Figure 8. the range of results reflected scores from 0 to 8 (on a 9-point scale). First-time-quality improvement from supplier development projects.No Execution of Technology Project 9 . For the purpose of display. Zero reflects that there was no execution of the project and 8 reflect that the technology project was a total success.Total Success of Technology Project Average Score of 6.3.3 Figure 9.

and (e) supplier development completion date. Measurement of Data Returned surveys were manually entered into Microsoft Excel software. Trust may be a focus for future research. The results showed an average 9% improvement in cost. 21 participants noted the supplier did not share cost information openly on approximately 50% of the cases. Cost improvement results from supplier development projects. The independent variables included values related to (a) information exchange. (c) annual supplier sales. This may be due. Descriptive data included (a) focus of supplier development project. (b) category of buy from the supplier. Cost Improvement Results from Supplier Development Projects Average Cost Improvement was 9% Percent cost improvement to Total Spend 35% 30% 25% 20% 15% 10% 5% 0% 0 10 20 30 40 Supplier Development Project Number Figure 10. The range of results from the supplier development projects focused on cost improvement ranged from 0 to 31%. and the demographic variables. It is also important to note that of the 43 surveys related to cost improvement projects. (b) . the six independent variables. in part. to a lack of trust by the suppliers in the customer organization.101 Figure 10 reflects the results from the projects focused on cost in ascending order. (d) region of supplier manufacturing location. The percentage reflects the percentage of cost saved versus the annual purchase value of the product purchased. data were gathered on the four dependent variables.

Based on the research questions and hypotheses. (d) supplier leadership attitude. (c) supplier participation. Pearson correlation coefficients and multiple linear regression analysis were applied to the data to provide feedback to analyze the hypotheses. and (f) supplier dependence on buying firm. and the dependent variables included the results achieved through the supplier development activity in the areas of quality. delivery.102 understanding of goals. cost. Is there a relationship between the independent variables of (a) information exchange. and technology development. (c) supplier participation. Research Questions and Hypotheses One primary question drove the research. cost. delivery. (e) buyer firm’s coordinator presence. (b) understanding of goals. and (f) supplier dependence on buying firm and the dependent variables of supplier development results in quality. (e) buyer firm’s coordinator presence. (d) supplier leadership attitude. and technology advancement? The following research questions were investigated through the research: Research Question 1: What relationship does the suppliers’ level of information exchange have with the outcome achieved from a supplier development activity? Research Question 2: What relationship does the suppliers’ level of understanding of the goals have with the outcome achieved from a supplier development activity? Research Question 3: What relationship does the suppliers’ level of participation have with the outcome achieved from a supplier development activity? Research Question 4: What relationship does the suppliers’ leadership attitude have with the outcome achieved from a supplier development activity? .

103 Research Question 5: What relationship does the buying firm’s level of presence of a coordinator have with the outcome achieved from a supplier development activity? Research Question 6: What relationship does the suppliers’ level of dependence based on percentage of the suppliers’ sales revenue to the buying firm have with the outcome achieved from a supplier development activity? Research Question 7: What relationship do the level of (a) information exchange, (b) understanding of goals, (c) participation, (d) leadership attitude, (e) buying firm’s coordinator presence, and (f) supplier dependence on buying firm collectively have with the outcome achieved from the supplier development activity? The research questions were applied in four groups based on the focus of the supplier development activities (dependent variables): quality, delivery, cost, and technology. The following hypotheses were derived from the literature review in supplier development: H10: There is no relationship between the suppliers’ levels of information exchange and the supplier development outcome in the areas of quality, delivery, cost, and technology. H1a: Higher levels of supplying firm information exchange will result in higher levels of supplier development outcome related to quality, delivery, cost, and technology. H20: There is no relationship between the suppliers’ levels of understanding of the goals and the supplier development outcome in the areas of quality, delivery, cost, and technology.

104 H2a: Higher levels of the suppliers’ understanding of the goals will result in higher levels of supplier development outcome in the areas of quality, delivery, cost, and technology. H30: There is no relationship with the suppliers’ level of participation and the supplier development outcome in the areas of quality, delivery, cost, and technology. H3a: Higher levels of suppliers’ participation will result in higher levels of supplier development outcome in the areas of quality, delivery, cost, and technology. H40: There is no relationship with the level of suppliers’ leadership attitude and the supplier development outcome in the areas of quality, delivery, cost, and technology. H4a: Higher levels of the suppliers’ leadership attitude will result in higher levels of supplier development outcome related to quality, delivery, cost, and technology. H50: There is no relationship with the level of assignment of a development coordinator from the buying firm and the supplier development outcome in the areas of quality, delivery, cost, and technology. H5a: Higher levels of assignment of a supplier development coordinator by the buying firm will result in higher levels of supplier development outcome in the areas of quality, delivery, cost, and technology. H60: There is no relationship with the suppliers’ level of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) and the supplier development outcome in the areas of quality, delivery, cost, and technology. H6a: Higher levels of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) to the buying firm will result in higher level of supplier development outcome in the areas of quality, delivery, cost, and technology.

105 H70: There is no collective relationship with the level of (a) information exchange, (b) understanding of goals, (c) supplier participation, (d) leadership attitude, (e) buying firm’s coordinator presence, and (f) suppliers’ dependence on buying firm and the supplier development outcome in the areas of quality, delivery, cost, and technology. H7a: Higher collective levels of (a) information exchange, (b) understanding of goals, (c) supplier participation, (d) leadership attitude, (e) buying firm’s coordinator presence, and (f) suppliers’ dependence on buying firm will result in a higher supplier development outcome in the areas of quality, delivery, cost, and technology. Data Analysis of Each Study Variable The survey instrument consisted of 5 demographic questions, 3 interval-type questions, and 14 phrase-completion questions with a 9-point scale (0-8). Hodge and Gillespie (2003) noted that a phrase completion scale offers an improved method over a Likert-type scale to provide higher reliability coefficients and stronger factor loading. Correlation analyses and multiple regression analyses were used to analyze participant responses. The independent variables were generated through the survey questions shown in Table 9. Where there were multiple questions for a variable, the average was calculated and used in the research analysis.

106 Table 9 Independent Variables with Data Level, Scale, and Number of Questions Independent variable name a. Levels of buying firm information exchange Data level Scale

Ratio (PC) 0 (no information exchange) to 8 (all information exchanged) (9-point scale). Five questions were utilized.

b. Level of understanding of goals

Ratio (PC) 0 (no understanding of goals) to 8 (total understanding of goals) (9-point scale). Three questions were utilized.

c. Level of supplier participation

Ratio

Number of supplier departments involved. Survey respondent identified if the following functional areas participated in the project: sales, product engineering, manufacturing, quality control, purchasing, materials management, process engineering, supplier quality, other.

d. Level of supplier leadership attitude

Ratio (PC) 0 (no leadership support) to 8 (total leadership support) (9-point scale). Three questions were utilized.

e. Level of coordinator presence f. Level of supplier dependence on buying firm

Ratio

% of time supplier coordinator spent managing the project. One question utilized.

Ratio % of sales to customer firm, One question utilized.

and (f) level of supplier dependence on buying firm and the dependent variables of supplier development outcome in the areas of quality.66 and 1. Multiple regression analysis allows a researcher to statistically evaluate data to determine the collective relationship and significance between the independent and dependent variables (Creswell. The form. (c) supplier participation.20 to . (b) percentage of annual purchase value saved. (c) success of technology project. A significance score of <.35 and . scores between . and magnitude of the association with the independent variables were also analyzed. (d) supplier leadership attitude. developed in a correlation matrix.107 The dependent variable levels were generated through the following survey questions related to a supplier development project: (a) first-time quality.65 show the variables are useful for a limited correlation. (b) understanding of goals. 2003).35 indicate a slight relationship. and (d) percentage of product delivered on time. Pearson’s correlation coefficients. The research objectives were accomplished utilizing correlation and multiple regression analyses of the independent variables. and scores between .0 show there is good correlation. direction. The multiple correlation coefficient and statistical significance values were used to evaluate . Pierson’s correlation coefficients allowed the researcher to evaluate the relationship between the independent variables of (a) information exchange. The data are shown in an ANOVA table. The intent of the analysis was to determine the statistical relationship between the independent variables (a-f) and the dependent variable (supplier development outcome).05 indicates the coefficient statistics are significantly correlated (Creswell). Creswell (2003) noted that scores from . cost. (e) buyer firm’s coordinator presence. delivery. and technology. provided data to determine if a relationship existed.

“A p-value is the probability (p) that a result could have been produced by chance if the null hypothesis were really true” (Creswell. 245). 75).01 shows the variables to be highly significant and strong evidence against the null hypothesis. Scores less than 0. the combined results are reviewed. delivery. . p.05 show the variables to be of statistical significance and there is adequate evidence against the null hypothesis (Creswell). Following the analysis of each area of focus. cost. Table 5 shows a modified scale provided by Triola (p. A score greater than 0. In the following section. The multiple correlation coefficients (R-squared) assess the proportion of the variability that can be explained by the second variable (Creswell).108 the collective relationship of the independent variables with the dependent variable. the results of the analyses are discussed. p. 365) to interpret p values.05 indicates there is insufficient evidence against the null hypothesis. Triola explained a score less than 0.05 (p value) or less to the dependent variable the relationship was considered significant. If the independent variable showed a relationship of . The section is separated into the four areas of focus: quality. 2003. “A small P-value signifies that a particular multiple regression equation has good overall significance and is valuable for making predictions” (O’Leary. and technology. Figure 11 represents the hypotheses for the research. Each area was analyzed separately to evaluate the research questions and hypotheses. Testing of Research Questions and Hypotheses This section contains a review of the results of the correlation analyses.

The correlation coefficients scores for understanding of goals. The correlation coefficients show a medium level of correlation between the independent variable of information exchange and the dependent variable of quality improvement results from supplier development projects. Level of coordinator presence 4. Technology Development f. Delivery Performance 3. Level of participation d. Hypotheses of positive correlation of independent to dependent variables. Quality This section contains an analysis of the research questions and hypotheses in relation to the results achieved from supplier development projects in the area of quality. According to Creswell (2003). number of functional areas participating.Quality Performance Hypotheses of Positive Correlation with Results 2. supplier leadership attitude. 273). “General guidelines indicate whether the size of the coefficient provide meaningful information about strength of association between two variables” (p. Table 10 is a correlation matrix of the analyses of the independent variables scores in relation to the dependent variable scores related to the results of supplier development projects focused on quality. level of supplier development support. Level of understanding of goals c. Cost Savings Performance Figure 11. Level of suppliers’ dependence on the buying firm Supplier Development Outcome – Dependent Variables 1. Level of information exchange b.109 Supplier Organizational – Independent Variables a. Level of supplier leadership attitude e. and supplier .

47 1 2 3 4 5 6 7 . (c) level of supplier participation.63 0.28 1 0.13 1 0.14 1 0. (b) level of understanding of goals.46 0. (d) level of supplier leadership attitude.32 0.11 0.03 -0. indicating as the (a) level of information exchange. (e) level of coordinator presence. the results achieved through supplier development projects also increased.21 0.03 -0.44 1 0.40 0. Suppliers’ dependence 0.110 dependence on buying firm show low levels of correlation with supplier development results. Figures 12-17 show the scatter plot diagrams for the six independent factors studied in relation to the results achieved through supplier development results.27 0. and (f) level of supplier dependence on buying firm increased. Supplier development engineers’ level of support 6. All factors showed a positive correlation to supplier development results.00 0. Number of functional areas participating 4.66 0. Understanding of goals 3. Suppliers’ leadership’s attitude 5.26 0.20 0.49 0.56 1 1 0. Table 10 Correlation Coefficients Matrix for Supplier Development Projects Focused on Quality 1 Quality 1. Information exchange 2.22 0.

Level of supplier information exchange versus quality improvement.111 Level of Supplier Information Exchange vs. Quality Improvement Percent First Time Quality Improvement 100% 80% 60% 40% 20% 0% 0 2 4 6 8 10 0 .No Understanding of Goals 8 .All Information Exchanged Figure 12.Complete Understanding of Goals Figure 13. Quality Improvement Percent First Time Quality Improvement 100% 80% 60% 40% 20% 0% 0 2 4 6 8 10 0 . Level of supplier understanding of goals versus quality improvement. Level of Supplier Understanding of Goals vs.No Information Exchanged 8 . .

No Leadership Support 8 . .Total Leadership Support Figure 15. Level of supplier participation versus quality improvement. Quality Improvement Percent First Time Quality Improvement 100% 80% 60% 40% 20% 0% 0 2 4 6 8 10 # of Functional Areas Participating in Workshop Figure 14.112 Level of Supplier Participation vs. Quality Improvement Percent First Time Quality Improvement 100% 80% 60% 40% 20% 0% 0 2 4 6 8 10 0 . Level of Supplier Leaderships Attitude vs. Level of supplier leadership’s attitude versus quality improvement.

Quality Improvement Percent First Time Quality Improvement 100% 80% 60% 40% 20% 0% 0 2 4 6 8 10 0 . Level of supplier dependence on buying firm versus quality improvement. . Level of supplier development coordinator’s presence versus quality improvement. Level of Supplier Dependence on Buying Firm vs. Quality Improvement Percent of First Time Quality Improvement 100% 80% 60% 40% 20% 0% 0 5 10 15 20 % of Supplier Dependence on Buying Firm Figure 17. The diagrams indicate that none of the factors studied show a high degree of correlation with supplier development results related to quality.0% of Time Leading Project 8 .113 Level of Supplier Development Coordinators Presence vs. A visual review of the scatter plot diagrams for each variable studied in this research supports the findings of the data analysis.100% of Time Leading Project Figure 16.

p < .58.114 Multiple regression analysis was used to evaluate the combined relationship of the independent variables with the dependent variable related to quality. The ANOVA table displayed the coefficient of determination (R-squared) score of . the results achieved through supplier development projects with a focus on quality also increase. A statistical analysis of the survey results is reflected in an ANOVA table shown in Appendix F. t(41) = 3. The table also shows the relative strength of the relationship. cost. delivery. Research Question 1: What relationship does the suppliers’ level of information exchange have with the outcome achieved from a supplier development activity? H10: There is no relationship between the suppliers’ levels of information exchange and the supplier development outcome in the areas of quality. A t-test was used (See Appendix G) to evaluate whether the relationship between each independent and the dependent variable was considered significant statistically.49.01. Table 11 shows a summary of the variables and the conclusions based on the analysis of results from the research. the null hypothesis is rejected. Based on the guidelines provided by Creswell (2003). There is statistically a significant relationship between information exchange and supplier development results focused on quality. therefore. and technology. the score indicates the dependent variable has a slight relationship with the dependent variable of first-time quality improvement. The score indicates the collective independent variables have a low level of correlation with the dependent variable. r = . .342. A positive relationship indicates that as the level of the independent variable increases.

Level of information exchange b.115 H1a: Higher levels of supplying firm information exchange will result in higher levels of supplier development outcome related to quality. Level of coordinators presence Statistically insignificant. no relationship c. Direction of Correlation. no relationship Multiple correlation coefficient shows a low strength in relationship The relationship was significant based on the data No relationship No relationship No relationship No relationship relationship Medium No relationship . There is statistically a medium-level positive relationship between information exchange. cost. Level of suppliers leadership attitude Statistically insignificant. and Strength of Relationship With QualityFocused Supplier Development Projects Strength of Independent variable a. Level of supplier participation Statistically insignificant. Level of supplier dependence on buying firm Collective level of a-f values (all the above) Statistically insignificant. Level of understanding of goals Positive/negative relation Positive relationship Statistically insignificant. no relationship e. therefore. and technology.49. and supplier development results focused on quality. a correlation coefficient of . Table 11 Table of Variables. no relationship d. the hypothesis is accepted. no relationship f. delivery.

21. and technology. delivery.85. At a 5% confidence level.39. and technology. p > . p > . Research Question 3: What relationship does the suppliers’ level of participation have with the outcome achieved from a supplier development activity? H30: There is no relationship with the suppliers’ level of participation and the supplier development outcome in the areas of quality. r = . cost. t(41) = 1. delivery. t(41) = .05. and technology. cost. and technology. delivery. the analysis shows there is no relationship between suppliers’ understanding of goals and supplier development outcome in the area of quality resulting in the hypothesis being rejected. therefore. the null hypothesis cannot be rejected. therefore. cost. cost. the analysis shows there is no relationship between suppliers’ level . the null hypothesis cannot be rejected. The research did not show statistically a relationship between understanding of goals and supplier development results focused on quality coefficient of r = . H3a: Higher levels of suppliers’ participation will result in higher levels of supplier development outcome in the areas of quality. H2a: Higher levels of the suppliers’ understanding of the goals will result in higher levels of supplier development outcome in the areas of quality.13.05. At a 5% confidence level.116 Research Question 2: What relationship does the suppliers’ level of understanding of the goals have with the outcome achieved from a supplier development activity? H20: There is no relationship between the suppliers’ levels of understanding of the goals and the supplier development outcome in the areas of quality. The research did not show statistically a relationship between level of participation and supplier development results focused on quality. delivery.

05. and technology.26. Research Question 5: What relationship does the buying firm’s level of presence of a coordinator have with the outcome achieved from a supplier development activity? H50: There is no relationship with the level of assignment of a development coordinator from the buying firm and the supplier development outcome in the areas of quality. r = .30. resulting in the hypothesis being rejected. and technology. cost. therefore. p > . the analysis shows there is no relationship between suppliers’ leadership attitude and supplier development outcome in the area of technology. At a 5% confidence level. cost. cost. the null hypothesis cannot be rejected. and technology. delivery. H4a: Higher levels of the suppliers’ leadership attitude will result in higher levels of supplier development outcome related to quality. resulting in the hypothesis being rejected. p > . the null hypothesis cannot be rejected. Research Question 4: What relationship does the suppliers’ leadership attitude have with the outcome achieved from a supplier development activity? H40: There is no relationship with the level of suppliers’ leadership attitude and the supplier development outcome in the areas of quality. delivery.07.52. t(41) = 1. indicating there may be a .20. delivery. t(41) = 1.117 of participation and supplier development outcome in the area of quality. The p value was less than .05. r = . The research did not show statistically a relationship between level leadership attitude and supplier development results focused on quality. therefore. The research did not show statistically a relationship between level of assignment of a development coordinator and supplier development results focused on quality.

therefore. and technology. There is statistically a relationship between level of dependence on buying firm and supplier development results focused on quality. Research Question 6: What relationship does the suppliers’ level of dependence based on percentage of the suppliers’ sales revenue to the buying firm have with the outcome achieved from a supplier development activity? H60: There is no relationship with the suppliers’ level of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) and the supplier development outcome in the areas of quality. and technology. delivery. cost. At a 5% confidence level. resulting in the hypothesis being rejected. H5a: Higher levels of assignment of a supplier development coordinator by the buying firm will result in higher levels of supplier development outcome in the areas of quality. r = .59. There is statistically a low-level positive relationship between level of assignment of a development coordinator. t(41) = 1. a correlation coefficient of . H6a: Higher levels of dependence on the buying firm (based on sales percentage of revenue sold to the buying firm) will result in a higher level of supplier development outcome in the areas of quality.27. the hypothesis is accepted. p > . cost. delivery. therefore.118 statistically marginal relationship. and technology. the analysis shows there is no relationship between level of assignment of a development coordinator and supplier development outcome in the area of technology. the null hypothesis cannot be rejected. delivery.05. Future research on a larger population may clarify the relationship. cost. and supplier development results focused on quality.27. .

and technology. (d) leadership attitude. (e) buying firm’s coordinator presence. The score does not represent a causal relationship. (c) supplier participation. The significance score of . (d) leadership attitude.12. (b) understanding of goals.02. cost. and dependence on buying firm and supplier development results focused on quality. (b) understanding of goals. (d) leadership attitude. the hypothesis is accepted.015 indicates there is a high level of confidence that the collective independent variables do correlate with the dependent variable. coordinator presence. A coefficient of determination score of . (c) supplier participation. cost. and technology. (e) buying firm’s coordinator presence. and (f) supplier dependence on buying firm collectively have with the outcome achieved from the supplier development activity? H70: There is no collective relationship with the level of (a) information exchange. (e) buying firm’s coordinator presence. participation. R2 = .34. therefore. understanding of goals. F(6. delivery. The remaining 66% cannot be explained. (b) understanding of goals. There is statistically a significant relationship between the collective variables of information exchange. . 36) = 3. the null hypothesis is rejected. leadership attitude. and (f) suppliers’ dependence on buying firm and the supplier development outcome in the areas of quality. H7a: Higher collective levels of (a) information exchange. therefore. and (f) suppliers’ dependence on buying firm will result in a higher supplier development outcome in the areas of quality. p < .34 indicates that the collective independent variable scores can explain 34% of the variation in the quality improvement values. (c) participation. delivery.119 Research Question 7: What relationship do the level of (a) information exchange.

60 0.63 0. Understanding of goals 3. Supplier development engineers’ level of support 6.120 Although the correlations were low.79 0.047 0.38 0.32 0.49 1 0. The data also indicate additional factors may contribute to successful supplier development results that were not the focus of this research.29 0. The results also support a higher level of focus on information exchange with improving supplier development results in the area of quality. Number of functional areas 4.45 0.53 1 2 3 4 5 6 7 .03 -0.29 1 0. Table 12 is a correlation matrix of the analysis of the independent variables scores in relation to the dependent variable scores related to the results of supplier development projects.37 0. Information exchange 2. Participating suppliers' leaderships attitude 5.14 0.76 0. Table 12 Correlation Coefficients Matrix for Supplier Development Projects Focused on Delivery 1 Delivery 1.16 0. Delivery In this section.17 0. the results indicate the importance of a focus on each of the factors.14 1 0.50 1 0.66 1 1 0. Suppliers’ dependence 0. the research questions and hypotheses were analyzed in relation to the results achieved from supplier development projects in the area of delivery.49 0.

(d) level of supplier leadership attitude.121 The correlation coefficients shows a high level of correlation between level of leadership attitude and results from supplier development projects in the area of delivery. Delivery Improvement 0 . indicating as the (a) level of information exchange. number of functional areas participating.All Information Figure 18. (e) level of coordinator presence. and buying firm’s level of support and the dependent variable of delivery improvement results. . the results achieved through supplier development projects focused on delivery also increased. (c) level of supplier participation.100% Delivered on Time 8 6 4 2 0 0 2 4 6 8 10 0 . and (f) level of supplier dependence on buying firm increased.In Information Exchanged Exchanged 8 . The scores for suppliers’ dependence on buying firm revealed a low level of correlation with supplier development results related to delivery. Level of supplier information exchange versus delivery improvement. All factors showed a positive correlation to supplier development results. The score shows a medium level of correlation between the independent variable of information exchange.No Delivery Improvement 8 . Figures 18-23 show the scatter plot diagrams for the six independent factors studied in relation to the delivery results achieved through supplier development results. Level of Supplier Information Exchange vs. (b) level of understanding of goals. understanding of goals.

No Delivery Improvement 8 .100% Delivery on Time 8 6 4 2 0 0 2 4 6 8 10 0 . Level of Participation vs.No Understanding of Goals 8 . Delivery Improvement 0 . . Level of participation versus delivery improvement.No Delivery Improvement 8 .Complete Understanding of Goals Figure 19.100% of Material delivered on Time 8 6 4 2 0 0 2 4 6 8 10 Number of Functional Areas Participating in Workshop Figure 20. Delivery Improvement 0 .122 Level of Supplier Understanding of Goals vs. Level of supplier understanding of goals versus delivery improvement.

100% of material Delivered on Time 8 6 4 2 0 0 2 4 6 8 10 0 . Level of Supplier Development Coordinators Presence vs.No Leadership Support 8 . Delivery Improvement 0 . .123 Level of Supplier Leaderships Attitude vs.No Delivery Improvement 8 . Level of supplier development coordinator’s presence versus delivery improvement. Level of supplier leadership’s attitude versus delivery improvement.100% of Time Leading Project Figure 22.Total Leaderships Support Figure 21. Delivery Improvement 0 .100% of Material Delivered on Time 8 6 4 2 0 0 2 4 6 8 10 0 .No Delivery Improvement 8 .0% of Time Leading Project 8 .

the score indicates the dependent variables are useful for limited correlation with the dependent variable of delivery improvement. A statistical analysis of the survey results is reflected in an ANOVA table shown in Appendix H. Level of supplier dependence on buying firm versus delivery improvement. Table 13 shows a summary of the variables and the conclusions based on the analysis of results from the research. Delivery Improvement 0 . A visual review of the scatter plot diagrams for each variable studied supports the findings of the data analysis. Based on the guidelines provided by Creswell (2003).No Delivery Improvement 8 .474. The score indicates the collective independent variables have a useful limited level of correlation with the dependent variable related to delivery. A positive relationship indicates that as the level of the independent variable increases. The diagrams indicate that none of the factors studied show a high degree of correlation with supplier development results related to delivery.100% of Material Delivered on Time 8 6 4 2 0 0 5 10 15 20 Percent of Suppliers Sales Sold to Buying Firm Figure 23. The ANOVA table displayed the coefficient of determination (R-squared) score of . the results achieved through supplier development .124 Level of Supplier Dependence on Buying Firm vs. Multiple regression analysis was used to evaluate the combined relationship of the independent variables with the dependent variable related to delivery.

Level of information exchange b. Level of supplier participation d. delivery. and technology. There is statistically a significant relationship between information . The table also shows the relative strength of the relationship. cost. Level of coordinator’s presence f.125 projects with a focus on delivery also increase. and Strength of Relationship with Delivery Focused Supplier Development Projects Strength of Independent Variable a. Direction of Correlation. Table 13 Table of Variables. Level of supplier dependence on buying firm Collective level of a-f values (all the above) Positive relationship Statistically insignificant. Level of understanding of goals c. Level of suppliers’ leadership attitude e. no relationship Multiple correlation coefficient shows a useful The relationship was significant Medium No relationship Positive/negative relation Positive relationship Positive relationship Positive relationship Positive relationship relationship Medium Medium Medium High level for limited correlation based on the data. Research Question 1: What relationship does the suppliers’ level of information exchange have with the outcome achieved from a supplier development activity? H10: There is no relationship between the suppliers’ levels of information exchange and the supplier development outcome in the areas of quality.

126 exchange and supplier development results focused on delivery, r = .45, t(25) = 2.52, p < .01; therefore, the null hypothesis is rejected. H1a: Higher levels of supplying firm information exchange will result in higher levels of supplier development outcome related to quality, delivery, cost, and technology. There is statistically a medium-level positive relationship between information exchange, a correlation coefficient of .45, and supplier development results focused on delivery; therefore, the hypothesis is accepted. Research Question 2: What relationship does the suppliers’ level of understanding of the goals have with the outcome achieved from a supplier development activity? H20: There is no relationship between the suppliers’ levels of understanding of the goals and the supplier development outcome in the areas of quality, delivery, cost, and technology. There is statistically a significant relationship between level understanding of goals and supplier development results focused on delivery, r = .49, t(25) = 2.84, p < .01; therefore, the null hypothesis is rejected. H2a: Higher levels of the suppliers’ understanding of the goals will result in higher levels of supplier development outcome in the areas of quality, delivery, cost, and technology. There statistically a medium-level positive relationship between information exchange, a correlation coefficient of .49, and supplier development results focused on delivery therefore the hypothesis is accepted. Research Question 3: What relationship does the suppliers’ level of participation have with the outcome achieved from a supplier development activity? H30: There is no relationship with the suppliers’ level of participation and the supplier development outcome in the areas of quality, delivery, cost, and technology.

127 There is statistically a significant relationship between participation and supplier development results focused on delivery, r = .50, t(25) = 2.85, p < .01; therefore, the null hypothesis is rejected. H3a: Higher levels of suppliers’ participation will result in higher levels of supplier development outcome in the areas of quality, delivery, cost, and technology. There is statistically a medium-level positive relationship between information exchange, a correlation coefficient of .50, and supplier development results focused on delivery; therefore, the hypothesis is accepted. Research Question 4: What relationship does the suppliers’ leadership attitude have with the outcome achieved from a supplier development activity? H40: There is no relationship with the level of suppliers’ leadership attitude and the supplier development outcome in the areas of quality, delivery, cost, and technology. There is statistically a significant relationship between leadership attitude and supplier development results focused on delivery, r = .60, t(25) = 3.78, p < .01; therefore, the null hypothesis is rejected. H4a: Higher levels of the suppliers’ leadership attitude will result in higher levels of supplier development outcome related to quality, delivery, cost, and technology. There is statistically a high-level positive relationship between information exchange, a correlation coefficient of .60, and supplier development results focused on delivery; therefore, the hypothesis is accepted. Research Question 5: What relationship does the buying firm’s level of presence of a coordinator have with the outcome achieved from a supplier development activity?

128 H50: There is no relationship with the level of assignment of a development coordinator from the buying firm and the supplier development outcome in the areas of quality, delivery, cost, and technology. There is statistically a significant relationship between level of assignment of a development coordinator and supplier development results focused on delivery, r = .38, t(25) = 2.35, p = .01; therefore, the null hypothesis is rejected. H5a: Higher levels of assignment of a supplier development coordinator by the buying firm will result in higher levels of supplier development outcome in the areas of quality, delivery, cost, and technology. There is statistically a medium-level positive relationship between information exchange, a correlation coefficient of .38, and supplier development results focused on delivery; therefore, the hypothesis is accepted. Research Question 6: What relationship does the suppliers’ level of dependence based on percentage of the suppliers’ sales revenue to the buying firm have with the outcome achieved from a supplier development activity? H60: There is no relationship with the suppliers’ level of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) and the supplier development outcome in the areas of quality, delivery, cost, and technology. The research did not show statistically a significant relationship between supplier dependence on buying firm and supplier development results focused on delivery, r = .16, t(25) = .94, p > .05; therefore, the null hypothesis cannot be rejected. H6a: Higher levels of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) will result in higher levels of supplier development outcome in the areas of quality, delivery, cost, and technology. At a 5% confidence level,

129 the analysis shows there is no relationship between dependence on the buying firm and supplier development outcome in the area of delivery, resulting in the hypothesis being rejected. Research Question 7: What relationship do the level of (a) information exchange, (b) understanding of goals, (c) participation, (d) leadership attitude, (e) buying firm’s coordinator presence, and (f) supplier dependence on buying firm collectively have with the outcome achieved from the supplier development activity? H70: There is no collective relationship with the level of (a) information exchange, (b) understanding of goals, (c) supplier participation, (d) leadership attitude, (e) buying firm’s coordinator presence, and (f) suppliers’ dependence on buying firm and the supplier development outcome in the areas of quality, delivery, cost, and technology. There is statistically a significant relationship between the collective variables of information exchange, understanding of goals, participation, leadership attitude, coordinator presence, and dependence on buying firm and supplier development results focused on delivery, R2 = .47, F(6, 20) = 3.01, p < .03; therefore, the null hypothesis is rejected. H7a: Higher collective levels of (a) information exchange, (b) understanding of goals, (c) supplier participation, (d) leadership attitude, (e) buying firm’s coordinator presence, and (f) suppliers’ dependence on buying firm will result in a higher supplier development outcome in the areas of quality, delivery, cost, and technology. A coefficient of determination score of .47 indicates that the collective independent variable scores can explain 47% of the variation in the delivery improvement values. The remaining 53% cannot be explained. The score does not represent a causal relationship.

suppliers’ leadership attitude. The data also indicate additional factors may contribute to successful supplier development results that were not the focus of this research. The factors showed a low to high level of correlation with supplier development results in the area of delivery.029 indicates there is a high level of confidence that the collective independent variables do correlate with the dependent variable. the hypothesis is accepted. therefore. the research questions and hypotheses are analyzed in relation to the results achieved from supplier development projects in the area of cost. showed a higher strength of correlation related to the results in delivery compared to quality. suppliers’ leadership attitude. Cost In this section. Supplier dependence showed no correlation to supplier development results with a focus on cost. and supplier development support and the dependent variable of cost improvement results from supplier development projects. The correlation coefficient scores for understanding of goals and number of functional areas participating have a low level of correlation with supplier development results. understanding of goals. supplier leadership attitude. and . in general. understanding of goals. The correlation coefficients show a medium level of correlation between the independent variable of information exchange.130 The significance score of . Table 14 is a correlation matrix of the analysis of the independent variables scores in relation to the dependent variable scores related to the results of supplier development projects. The data indicate as the level of information exchange. Information exchange. The factors. and level of support were shown to have a positive correlation to supplier development results related to cost.

The correlation coefficient for supplier dependence showed no statistical evidence of correlation. Understanding of goals 3. the results achieved through supplier development projects focused on cost also increase.131 coordinator presence increases.65 0.73 0.64 0.49 1 0.21 -0.46 1 2 3 4 5 6 7 .31 0.04 -0.37 0. An analysis of the scatter plot diagram indicates the relationship may not be linear.30 0. Information exchange 2. Figures 24-29 show the scatter plot diagrams for the six independent factors studied in relation to the cost improvement results achieved through supplier development projects. Correlation coefficients calculate data to fit a linear line (Cooper & Schindler. Table 14 Correlation Coefficients Matrix for Supplier Development Projects Focused on Cost 1 Cost 1.47 0.22 0. Supplier development engineers’ level of support 6.34 0. Number of functional areas participating 4.12 -0.39 0. results related to cost decrease. Suppliers’ dependence 0.34 1 0.15 -0. Suppliers’ leadership’s attitude 5.04 0. 2003).57 1 1 0.05 1 0.28 1 0. The negative correlation coefficient related to the number of functional areas participating indicates as this factor increases.

No Understanding of Goals 8 .Complete Understanding of Goals Figure 25. % Cost Improvement Percent Cost Improvement 40% 30% 20% 10% 0% 0 2 0 No Information Exchanged 4 6 8 . % Cost Improvement Percent Cost Improvement 40% 30% 20% 10% 0% 0 2 4 6 8 10 0 . Level of supplier information exchange versus percentage cost improvement. Level of supplier understanding of goals versus percentage cost improvement. Level of Supplier Understanding of Goals vs. .All information Exchanged 8 10 Figure 24.132 Level of Supplier Information Exchange vs.

. % Cost Im provem ent Percent Cost Im provem ent 40% 30% 20% 10% 0% 0 2 4 6 8 10 0 . Level of Supplier Leaderships Attitude vs.Total Leadership Support Figure 27.133 Level of Participation vs. Level of participation versus percentage cost improvement. % Cost Improvement 40% Percent Cost Improvemnt 30% 20% 10% 0% 0 2 4 6 8 10 Number of Funtional Areas Participated in Workshop Figure 26. Level of supplier leadership attitude versus percentage cost improvement.No Leadership Support 8 .

134 Level of Supplier Development Coordinators Presence vs. . The diagrams indicate none of the factors studied show a high degree of correlation with supplier development results related to cost. % Cost Improvement Percent Cost Improvement 40% 30% 20% 10% 0% 0 2 4 6 8 10 12 14 16 18 Percent of Suppliers Sales Sold to Buying Firm Figure 29. % Cost Improvement Percent Cost Improvement 40% 30% 20% 10% 0% 0 2 4 6 8 10 0 . A visual review of the scatter plot diagrams for each variable studied in this research supports the findings of the data analyses.100% of Time Leading Project Figure 28.0% of Time Leading Project 8 . Level of supplier development coordinator’s presence versus percentage cost improvement. Level of Supplier Dependence on Buying Firm vs. Level of supplier dependence on buying firm versus cost percentage improvement.

r = . and technology. . Table 15 shows the relative strength of the relationship. the results achieved through supplier development projects with a focus on cost also increase. The ANOVA table displayed the coefficient of determination (R-squared) score of . Based on the guidelines provided by Creswell (2003). There is statistically a relationship between information exchange and supplier development results focused on cost. t(33) = 1.61. the results in cost achieved through supplier development activities decrease. delivery. the score indicates the collective independent variables are useful for limited correlation with the dependent variable of cost improvement.31.88. therefore. A negative relationship indicates as the level of participation of functional areas increases. No statistical evidence of correlation indicates the variables show no relationship. Research Question 1: What relationship does the suppliers’ level of information exchange have with the outcome achieved from a supplier development activity? H10: There is no relationship between the suppliers’ levels of information exchange and the supplier development outcome in the areas of quality. Table 15 shows a summary of the variables and the conclusions based on the analysis of results from the research. p < . the null hypothesis is rejected. A statistical analysis of the survey results is reflected in an ANOVA table shown in Appendix I. cost. A positive relationship indicates that as the level of the independent variable increases.135 Multiple regression analysis was used to evaluate the combined relationship of the independent variables with the dependent variable related to cost.04.

H1a: Higher levels of supplying firm information exchange will result in higher levels of supplier development outcome related to quality. based on the data. and Strength of Relationship With Cost Focused Supplier Development Projects Positive/negative/no Independent variable Level of information exchange Level of understanding of goals relationship Positive relationship Strength of relationship Medium Statistically insignificant. therefore. no No relationship relationship Level of supplier participation Negative relationship Low Medium Medium Level of suppliers’ leadership attitude Positive relationship Level of coordinator’s presence Level of supplier dependence on buying firm Positive relationship Statistically insignificant. There is statistically a medium-level positive relationship between information exchange. the hypothesis is accepted.136 Table 15 Table of Variables. Direction of Correlation. cost.31. and technology. delivery. and supplier development results focused on cost. Research Question 2: What relationship does the suppliers’ level of understanding of the goals have with the outcome achieved from a supplier development activity? . no No relationship relationship The relationship was significant Collective level of a-f values (all the Multiple correlation above) coefficients show a useful level for limited correlation. a correlation coefficient of .

There is statistically a low-level negative relationship between information exchange. Research Question 3: What relationship does the suppliers’ level of participation have with the outcome achieved from a supplier development activity? H30: There is no relationship with the suppliers’ level of participation and the supplier development outcome in the areas of quality. therefore. r = -. cost. t(33) = 1. cost. p > . At a 5% confidence level. and technology. p < . and technology. There is statistically a relationship between level of participation of buying firm at the supplier location and supplier development results focused on cost. the analysis shows there is no relationship between suppliers’ understanding of goals and supplier development outcome in the area of cost. therefore.22.05.21. the null hypothesis is rejected. cost. delivery. r = . delivery. H3a: Higher levels of suppliers’ participation will result in higher levels of supplier development outcome in the areas of quality. delivery. and supplier development results focused on cost. cost. the hypothesis is rejected.28.28.137 H20: There is no relationship between the suppliers’ levels of understanding of the goals and the supplier development outcome in the areas of quality. t(33) = -1. therefore. . a correlation coefficient of -.05. The research did not show statistically a significant relationship between understanding of goals and supplier development results focused on cost.71. delivery. resulting in the hypothesis being rejected. H2a: Higher levels of the suppliers’ understanding of the goals will result in higher levels of supplier development outcome in the areas of quality. the null hypothesis cannot be rejected. and technology. and technology.

delivery. delivery. and supplier development results focused on cost. and technology. cost.47.30. therefore. There is statistically a relationship between leadership attitude and supplier development results focused on cost.04. p < . r = . There is a statistically significant relationship between level of assignment of a development coordinator and supplier development results focused on cost. cost. H5a: Higher levels of assignment of a supplier development coordinator by the buying firm will result in higher levels of supplier development outcome in the areas of quality. t(33) = 1. and technology. delivery. Research Question 5: What relationship does the buying firm’s level of presence of a coordinator have with the outcome achieved from a supplier development activity? H50: There is no relationship with the level of assignment of a development coordinator from the buying firm and the supplier development outcome in the areas of quality. t(33) = 3.30. a correlation coefficient of . There is statistically a low-level positive .03. and technology.138 Research Question 4: What relationship does the suppliers’ leadership attitude have with the outcome achieved from a supplier development activity? H40: There is no relationship with the level of suppliers’ leadership attitude and the supplier development outcome in the areas of quality. cost.82. r = . There is statistically a low-level positive relationship between information exchange. the null hypothesis is rejected. therefore. delivery. and technology.01. cost. H4a: Higher levels of the suppliers’ leadership attitude will result in higher levels of supplier development outcome related to quality. therefore. the null hypothesis is rejected. p < . the hypothesis is accepted.

04. Research Question 7: What relationship does the level of (a) information exchange. the hypothesis is accepted. cost. At a 5% confidence level. H6a: Higher levels of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) to the buying firm will result in a higher level of supplier development outcome in the areas of quality. (c) participation. the null hypothesis cannot be rejected. and technology. delivery. t(33) = .05. p > . therefore. (b) understanding of goals. therefore.139 relationship between information exchange. Research Question 6: What relationship does the suppliers’ level of dependence based on percentage of the suppliers’ sales revenue to the buying firm have with the outcome achieved from a supplier development activity? H60: There is no relationship with the suppliers’ level of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) and the supplier development outcome in the areas of quality.22. . and supplier development results focused on cost. and technology. (e) buying firm’s coordinator presence. r = . delivery. the analysis shows there is no relationship between dependence on the buying firm and supplier development outcome in the area of cost. cost. and (f) supplier dependence on buying firm collectively have with the outcome achieved from the supplier development activity? H70: There is no collective relationship with the level of (a) information exchange. (c) supplier participation. (d) leadership attitude.47. a correlation coefficient of . The research did not show statistically a significant relationship between supplier dependence on buying firm and supplier development results focused on cost. (d) leadership attitude. (b) understanding of goals. resulting in the hypothesis being rejected.

coordinator presence. The level of supplier dependence on the buying firm showed no discernable level of correlation. The score does not represent a causal relationship. and (f) suppliers’ dependence on buying firm will result in a higher supplier development outcome in the areas of quality. H7a: Higher collective levels of (a) information exchange.61 indicates that the collective independent variable scores can explain 61% of the variation in the cost improvement values.61. R2 = . the hypothesis is accepted. F(6. The remaining 39% cannot be explained. The variables of understanding of goals and supplier participation showed a low level of correlation to supplier development results in the area of cost. supplier leadership attitude.41. cost. (e) buying firm’s coordinator presence. There is statistically a significant relationship between the collective variables of information exchange. therefore. and coordinator’s presence. leadership attitude. p < . 28) = 7.01. and technology. and dependence on buying firm and supplier development results focused on cost. A coefficient of determination score of . . cost. delivery. participation. the null hypothesis is rejected. delivery.00 indicates a high level of confidence and that the collective independent variables do correlate with the dependent variable related to cost. (d) leadership attitude. therefore. (c) supplier participation. Factors that showed a medium level of correlation with supplier development results achieved included level of information exchange. The significance score of . and technology. understanding of goals.140 (e) buying firm’s coordinator presence. and (f) suppliers’ level of dependence on buying firm and the supplier development outcome in the areas of quality. (b) understanding of goals.

141 Technology In this section.40 0.32 0.25 0. Understanding of goals 3.19 0. Table 16 is a correlation coefficients matrix of the analysis of the independent variables scores in relation to the dependent variable scores related to the results of supplier development projects focused on technology. the research questions and hypotheses will be analyzed in relation to the results achieved from supplier development projects in the area of technology.04 0.73 0. Suppliers’ leadership’s attitude 5. Suppliers dependence 0. Table 16 Correlation Coefficients Matrix for Supplier Development Projects Focused on Technology 1 Technology 1. The .41 1 0.72 0.58 1 0.48 0.45 1 2 3 4 5 6 7 The correlation coefficients show a high level of correlation between the independent variable of supplier development level of support with the dependent variable of technology improvement results from supplier development projects. Supplier development engineers’ level of support 6.90 0.22 1 0.41 0.24 1 1 0. Information exchange 2.18 1 0.12 0. Number of functional areas participating 4.78 0.28 0.47 0.08 0.

and (e) level of coordinator presence increase. All factors with the exception of suppliers’ dependence on the buying firm showed a positive correlation to supplier development results. and suppliers’ leadership attitude showed a medium level of correlation. 0 .All Inform ation Exchanged 6 8 Figure 30.No Success 8 Total Success 8 6 4 2 0 0 2 4 0 . supplier dependence showed no correlation to supplier development results with a focus on technology. . the results achieved through supplier development projects focused on technology also increase. Finally.No Inform ation Exchanged 8 . Figures 3035 shows the scatter plot diagram for the six independent factors studied in relation to the technology improvement results achieved through supplier development projects. (b) level of understanding of goals. (d) level of supplier leadership attitude.142 correlation coefficients for information exchange. (c) level of supplier participation. Level of supplier information exchange versus technology success. Technology Success Success of Technology Project. Level of Supplier Information Exchange vs. The independent factor of understanding of goals is shown to have a low level of correlation with supplier development results. indicating as the (a) level of information exchange. number of functional areas participating.

.Total Success 8 6 4 2 0 0 2 4 6 8 0 . Level of Participation vs. 0 .No Understanding of Goals 8 .Total Understanding of Goals Figure 31.No Success 8 . Level of supplier understanding of goals versus technology success.No Success 8 Total Success 8 6 4 2 0 0 2 4 6 8 # of Functional Areas Participated in Workshop Figure 32. Technology Success Success of Technology Project.143 Level of Supplier Understanding of Goals vs. Technology Success Success of Technology Project. 0 . Level of participation versus technology success.

0 .144 Level of Supplier Leaderships Attitude vs. Technology Success Success of Technology Project. Level of supplier’s leadership’s attitude versus technology success.100% of Tim e Leading Project Figure 34.No Leadership Support 8 . Level of Supplier Development Coordinators Presence vs.No Success 8 .No Success 8 Total Success 8 6 4 2 0 0 2 4 6 8 0 .Total Success 8 6 4 2 0 0 2 4 6 8 0 . . Level of supplier development coordinator’s presence versus technology success. Technology Success Success of Technology Project.0% of Tim e Leading Project 8 . 0 .Total Leadership Support Figure 33.

A statistical analysis of the survey results is reflected in an ANOVA table shown in Appendix J. Based on the guidelines provided by Creswell (2003). Multiple regression analysis was used to evaluate the combined relationship of the independent variables with the dependent variable related to technology. the results achieved through supplier development . these findings should be considered limited. A positive relationship indicates that as the level of the independent variable increases.No Success 8 Total Success 8 6 4 2 0 0 2 4 6 8 % of Suppliers Sales Sold to Buying Firm Figure 35. the score indicates the independent variables show good correlation with the dependent variable of technology improvement. The ANOVA table displayed the coefficient of determination (R-squared) score of . Technology Success Success of Technology Project. 0 .145 Level of Supplier Dependence on Buying Firm vs. With the total number of projects in the analysis for technology at 18. Table 17 shows a summary of the variables and the conclusions based on the analysis of results from the research. A visual review of the scatter plot diagrams for each variable studied in this research supports the findings of the data analyses. Level of supplier dependence on buying firm and technology improvement success. The score indicates the collective independent variables have good correlation with the dependent variable related to technology.796.

The relation was significant based on the data. Direction of Correlation. no relationship Level of supplier participation Level of suppliers’ leadership attitude Level of coordinator’s presence Level of supplier dependence on buying firm Collective level of a-f values (all the above) Positive relationship Positive relationship Positive relationship Statistically insignificant no relationship Multiple regression coefficients show a good correlation. No statistical evidence of correlation indicates the variables have no relationship. Medium Medium High No relationship Strength of relationship Medium No relationship Research Question 1: What relationship does the suppliers’ level of information exchange have with the outcome achieved from a supplier development activity? .146 projects with a focus on technology also increase. and Strength of Relationship With Technology-Focused Supplier Development Projects Positive/negative/no Independent variable Level of information exchange Level of understanding of goals relation Positive relationship Statistically insignificant. The table also shows the relative strength of the relationship. Table 17 Table of Variables.

p > . There is statistically a significant relationship between information exchange and supplier development results focused on technology. and technology.47. therefore. therefore. the hypothesis is accepted.47. a correlation coefficient of . delivery. cost. There is statistically a relationship between participation and supplier development . r = . delivery. and technology. cost. and supplier development results focused on technology. t(15) = 2. H30: There is no relationship with the suppliers’ level of participation and the supplier development outcome in the areas of quality. resulting in the hypothesis being rejected. cost. r = . cost.19.05. H1a: Higher levels of supplying firm information exchange will result in higher levels of supplier development outcome related to quality. At a 5% confidence level. the null hypothesis cannot be rejected. delivery. and technology. and technology. the null hypothesis is rejected. cost. delivery. There is statistically a medium-level positive relationship between information exchange. the analysis shows there is no relationship between suppliers’ understanding of goals and supplier development outcome in the area of technology.03.147 H10: There is no relationship between the suppliers’ levels of information exchange and the supplier development outcome in the areas of quality. H20: There is no relationship between the suppliers’ levels of understanding of the goals and the supplier development outcome in the areas of quality.15. p < . therefore. The research did not show statistically a significant relationship between suppliers’ understanding of the goals and supplier development results focused on technology. t(15) = . and technology.78. delivery. H2a: Higher levels of the suppliers’ understanding of the goals will result in higher levels of supplier development outcome in the areas of quality.

H4a: Higher levels of the suppliers’ leadership attitude will result in higher levels of supplier development outcome related to quality. the hypothesis is accepted.41. t(15) = 1. p < . There is statistically a medium-level positive relationship between information exchange.05. There is statistically a relationship between leadership attitude and supplier development results focused on technology.73. H40: There is no relationship with the level of suppliers’ leadership attitude and the supplier development outcome in the areas of quality. . cost. r = . delivery. There is a statistically significant relationship between level of assignment of a development coordinator and supplier development results focused on technology.04.40. therefore.01. cost. therefore. delivery.79. t(15) = 1. H50: There is no relationship with the level of assignment of a development coordinator from the buying firm and the supplier development outcome in the areas of quality. p < . therefore. the null hypothesis is rejected.41. delivery. a correlation coefficient of . and supplier development results focused on technology.41. cost. t(15) = 6. therefore. and technology. the null hypothesis is rejected. and supplier development results focused on technology.148 results focused on technology. H3a: Higher levels of supplier participation will result in higher levels of supplier development outcome in the areas of quality. r = .05. the null hypothesis is rejected. a correlation coefficient of . p < . and technology. There is statistically a low-level positive relationship between information exchange. and technology. and technology. delivery. therefore.80. the hypothesis is accepted. cost. r = .

the analysis shows there is no relationship between dependence on the buying firm and supplier development outcome in the area of technology. and technology. and technology. cost. and (f) suppliers’ dependence on buying firm and the supplier development outcome in the areas of quality. and technology. resulting in the hypothesis being rejected. (b) understanding of goals. (d) leadership attitude. p > . and technology. . H60: There is no relationship with the suppliers’ level of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) and the supplier development outcome in the areas of quality. (e) buying firm’s coordinator presence. delivery. cost. therefore. (c) supplier participation.46.149 H5a: Higher levels of assignment of a supplier development coordinator by the buying firm will result in higher levels of supplier development outcome in the areas of quality. the hypothesis is accepted.72. delivery. a correlation coefficient of . delivery. participation. At a 5% confidence level. therefore. H70: There is no collective relationship with the level of (a) information exchange. cost. There is statistically a high-level positive relationship between information exchange.08. and supplier development results focused on technology. cost. understanding of goals. leadership attitude. The research did not show statistically a significant relationship between suppliers’ level of dependence and supplier development results focused on technology. r = .05. t(15) = . There is statistically a significant relationship between the collective variables of information exchange. delivery. the null hypothesis cannot be rejected. H6a: Higher levels of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) to the buying firm will result in a higher level of supplier development outcome in the areas of quality.

(d) leadership attitude. (b) understanding of goals. cost. (e) buying firm’s coordinator presence. delivery. and level of leadership attitude. the hypothesis is accepted. A coefficient of determination score of . Factors that showed a medium level of correlation with supplier development results in the area of technology included level of information exchange. 11) = 7. (c) supplier participation. cost. and technology.80.150 coordinator presence. The independent variable of supplier development engineers’ level of support showed a high correlation to the dependent variable of level of success related to technology. p < . . The significance score of .003 indicates a high level of confidence that the collective independent variables do correlate with the dependent variable related to technology. delivery. therefore. Level of understanding of goals showed a low level of correlation to supplier development results in the area of technology. F(6. and technology. The remaining 20% cannot be explained. and dependence on buying firm and supplier development results focused on technology. the null hypothesis is rejected.80 indicates the collective independent variable scores can explain 80% of the variation in the technology improvement values. level of supplier participation. The level of supplier dependence on the buying firm showed no statistical discernable level of correlation with supplier development results in the area of quality.01. The score does not represent a causal relationship.15. therefore. R2 = . and (f) suppliers’ dependence on buying firm will result in a higher supplier development outcome in the areas of quality. H7a: Higher collective levels of (a) information exchange.

Table 18 Summary Table Showing the Correlation Results of Direction for Strength and Direction in Relation to the Studied Independent Variables Dependent variables Quality Independent variables Information exchange Understanding of goals Supplier participation Leadership attitude Supplier development coordinator presence Supplier dependence NA NA NA NA NA NA NA NA Medium D + NA NA NA NA S Medium NA NA NA NA Delivery D + + + + + S Medium D + Cost S Medium NA Low Medium Medium Technology D + NA + + + S Medium NA Medium Medium High Medium NA Medium High Medium + + Collective variables Low Low Low Note. delivery. (e) buyer firm’s coordinator presence. cost. +. negative. The research results on . and (g) the collective relationships. and technology related to the independent variables of (a) information exchange. delivery. direction. (f) supplier dependence on buying firm. strength. The data on the independent variable of level of information exchange were found statistically to have a significant relationship with results from supplier development activities in the areas of quality. S. positive. (d) supplier leadership attitude. and technology. NA. D.151 Summary Table 18 is a summary of the direction and strength of correlation for each of the areas of dependent variables of quality. -. cost. not applicable. (c) level of supplier participation. (b) understanding of goals.

cost. and no statistical significance with activities focused on quality. future research opportunities. cost. and technology. and technology. the limitations of the research. The statistics on the suppliers’ level of participation showed mixed results with a significant positive correlation with supplier development results focused on delivery and technology.152 the factors of level of understanding of goals and supplier’s leadership attitude were found statistically to have a significant relationship with supplier development results in the areas of delivery but not in the area of quality. The research indicated that collectively the independent variables showed a slight to good relationship with the dependent variables of supplier development outcome. Chapter 5 contains an overview of the research. a statistically negative relationship with supplier development activities focused on cost. delivery. and concluding comments. cost. . The data on the level of supplier development coordinator’s presence and participation showed a significant relationship with supplier development activities focused on delivery. The research finding on the independent variable of supplier dependence on the buying firm was showed no statistically significant relationship with supplier development results focused on quality. and technology.

research questions. A lack of understanding of the variables that contribute to successful supplier development efforts may impede firms’ ability to utilize invested resources effectively to meet customer requirements. Based on this definition. delivery. (b) understanding of goals. and outcomes of the hypotheses. The variables were studied independently and collectively. . (c) supplier participation. p. For this research. supplier development involved the “transfer of resources for the purpose of improving the suppliers’ performance and capabilities” (Easton. and technology advancement. (e) buyer firm’s coordinator presence. Overview of the Research This section provides an overview of the study and contains a review of the methodology. 2000.153 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS The purpose of the quantitative research study was to analyze the relationship between the independent variables of (a) information exchange. cost. 2). Research in the area of supplier development may provide supply chain professionals the knowledge to improve results. (d) supplier leadership attitude. delivery. and technology. cost. The study involved a quantitative analysis to identify and test the relative importance and direction of key factors believed to have a relationship to results generated through supplier development projects in the areas of quality. This chapter contains the conclusion of the research. The result of the study expands the body of knowledge on supply chain management and augments past research by analyzing variables from the perspective of a buying firm. and (f) supplier dependence on buying firm and the dependent variable of supplier development results in quality.

The strategy proved effective. or 82%. Supply chain professionals completed a survey instrument for projects completed between January 2005 and February 2008. The approach appears to have been successful for executing the research project.154 supplier development includes any activity or resource the buying firm deploys to improve the performance of suppliers. Factors that were potentially important for organizations to focus on to produce satisfactory results from supplier development activities were identified through an investigation of supplier development literature. Supported by the literature. resulting in 29 of the 42 supply chain professionals. . To examine the model. completing one or more survey instrument to be included in the research. Data were collected through the use of a self-administered survey instrument with some data mining. a model of important factors contributing to successful supplier development results was constructed and shown in Figure 3. Seventy-five acceptable surveys were returned for analysis from the 42 supply chain professionals. Table 19 displays the research questions resulting from the literature review and model used for the study. A survey instrument was appropriate for the research because the analysis required data from supplier development engineers related to projects that have been completed to test the research questions and hypotheses. data were collected from one large automotive supplier that has been practicing supplier development activities for over 5 years. The strategy of conducting premeetings with the supplier development engineers prior to survey completion allowed participants to understand the nature of the research. A test of the survey instrument helped to ensure the research would produce valid and reliable results.

(d) supplier leadership attitude.155 Table 19 Summary Table Showing Research Questions Number 1 Research question What relationship does the suppliers’ level of information exchange have with the outcome achieved from a supplier development activity? 2 What relationship does the suppliers’ level of understanding of the goals have with the outcome achieved from a supplier development activity? 3 What relationship does the suppliers’ level of participation have with the outcome achieved from a supplier development activity? 4 What relationship does the suppliers’ leadership attitude have with the outcome achieved from a supplier development activity? 5 What relationship does the buying firm’s level of presence of a coordinator have with the outcome achieved from a supplier development activity? 6 What relationship does the suppliers’ level of dependence based on percentage of the suppliers’ sales revenue to the buying firm have with the outcome achieved from a supplier development activity? 7 What relationship do the level of (a) information exchange. (e) buying firm’s coordinator presence. and (f) supplier dependence on buying firm . (c) supplier participation. (b) understanding of goals. (e) buyer firm’s coordinator presence. (c) participation. (d) leadership attitude. and (f) supplier dependence on buying firm collectively have with the outcome achieved from the supplier development activity? The research questions addressed the relationship of (a) information exchange. (b) understanding of goals.

. Table 20 provides a summary of the results. delivery. Dunn & Young. and technology. 2005). 2002. delivery. A summary of the results of the hypotheses tests for the variables in the research model is also provided. cost. The results of the research show a medium level of positive correlation with supplier development results between suppliers’ information exchange and the results of supplier development projects in the area of quality. Sanchez-Rodriguez et al. 2002. . 134). Elmuti. and technology. cost. and technology. the research results are evaluated in the context of the literature. Correlation of Supplier Development Results With the Level of Information Exchange Hypothesis 1 addressed the relationship of the level of information exchange with the results achieved from supplier development projects.156 individually with the outcome individually and collectively achieved from supplier development activity focused on quality. cost. 2004.. In the following pages. Monczka et al. delivery. Information exchange was selected due to the number of authors advocating its importance in successful supplier development results (Burt et al. Burton (2000) defined information exchange as the “relaying of business-related information in a way that enables the recipient to take action” (p.. 2003. The results from the t-test indicated information exchange showed statistically a significant relationship to the results achieved from supplier development activities focused on quality.

H1a: Higher levels of supplying firm information exchange will result in higher levels of supplier development outcome related to quality. Quality. cost. Sako. 2004. and technology. and technology. 2006). delivery. Sanchez-Rodriguez et al.. delivery. and technology Rejected Null hypothesis rejected based on probability values < . Goals establish organizational priorities and represent the foundation of how resources are . Strength shown to be medium. delivery. 2002. delivery. cost. cost.157 Table 20 Summary Table of Hypothesis H1 Hypothesis Area of focus H10: There is no relationship between the suppliers’ levels of information exchange and the supplier development outcome in the areas of quality. and technology Accepted Selling firms’ information exchange positively correlates to successful supplier development results.05. Quality. cost. Support Explanation of results Correlation of Supplier Development Results With the Level of Suppliers’ Understanding of Goals Understanding of goals was selected as a variable for the research due to the numerous authors advocating its importance in successful supplier development processes (Krause & Scannell.

Table 21 Summary Table of Hypothesis H2 Hypothesis Area of focus H20: There is no relationship between the suppliers’ levels of understanding of the goals and the supplier development outcome in the areas of quality. H2a: Higher levels of the suppliers’ understanding of the goals will result in higher levels of supplier development outcome in the areas of quality. delivery. The results (see Table 21) from the t-test indicated understanding of goals showed statistically a significant relationship to the results achieved from supplier development activities focused on delivery.05. and technology. cost. 9).05. and technology Not Rejected Null hypothesis not rejected based on probability value > . and technology. Support Explanation of results .158 allocated (Lindsey. and technology Rejected Delivery Accepted Delivery Rejected Quality. Lindsey wrote. cost. The t-test did not support there was statistically a significant relationship between understanding of goals and results achieved from supplier development activities focused quality. “There must be both organizational and individual commitment to the strategy and the goals that derive from the strategy” (p. and technology. Cost. Correlation coefficient values supports the hypothesis for delivery and quality but not for cost and technology based on probability values of > . 1989). Null hypothesis rejected based on probability value < . delivery. cost. delivery. cost.05.

159 Correlation of Supplier Development Results With the Level of Participation of the Supplier Organization Understanding of level of supplier participation by the selling firm was selected as a variable for the research due to the numerous authors advocating its importance in successful supplier development processes (Burt et al. p. and technology. 1995. . 1989. power. Results from the t-test indicated level of supplier participation showed statistically a significant relationship to the results achieved from supplier development activities focused on delivery. Lindsey noted that resource allocation to specific strategies communicates to others within the firm where priorities have been positioned and conveys authority. 211). The t-test showed statistically a negative relationship between level of participation and results achieved from supplier development activities focused on cost. The data indicated the level of participation may have a negative impact on the level of cost improvement for supplier development projects. 2003. Monczka et al. and status. that the goal is important and that the senior manager is serious about it” (Lindsey. The t-test did not support there was statistically a significant relationship between level of supplier participation and results achieved from supplier development activities focused quality. An examination of the scatter plot diagram showed that the approach of correlation analysis of forcing data into a linear line may cause this conclusion to be suspect.. 2002). cost. “Resource allocation clearly testifies to people throughout the organization.. Krause. The results (see Table 22) of the research show a medium level of positive correlation between suppliers’ understanding of goals and the results from supplier development projects in the area of delivery.

Cost showed a negative correlation resulting in a rejection of the hypothesis. delivery. and technology.05 for projects focused on delivery. and technology.05. Quality Cost Rejected Rejected Hypothesis rejected based on correlation coefficient. delivery. H3a: Higher levels of suppliers’ participation will result in higher levels of supplier development outcome in the areas of quality. . Cost Technology Not rejected Null hypothesis could not be rejected based on probability value > . and technology. Correlation of Supplier Development Results With the Level Suppliers’ Leadership Attitude The state of commitment of the suppliers’ top leadership at the initiation of the supplier development activity may have an impact on the level of results achieved. Cost showed a negative correlation. and technology. Delivery Technology Accepted Accepted Correlation coefficient values support the hypothesis for delivery.160 Table 22 Summary Table of Hypothesis H3 Hypothesis Area of focus Support Explanation of results H30: There is no relationship Quality with the suppliers’ level of participation and the supplier development outcome in the Delivery areas of quality. cost. cost. Rejected Rejected Rejected Null hypothesis rejected based on probability values < .

This new breed of leadership is tasked with being able to influence and inspire followers with a clearly articulated vision of new goal achievement (Leonard..161 Research into this factor may provide insight into what pre-requirements may be necessary to initiate a supplier development process. “Overwhelmingly. The results (see Table 23) from the t-test indicated level of suppliers’ leadership attitude showed statistically a significant relationship to the results achieved from supplier development activities focused on delivery. 24). p. 2003). 2006. Easton (2000) conducted empirical research in which 86 suppliers were analyzed and indicated that the more positive the attitude by the supplier’s leadership was. The t-test did not support there was statistically a significant relationship between level of suppliers’ leadership attitude and results achieved from supplier development activities focused quality. the interviewed managers emphasized that ‘real’ SCM cannot deliver exceptional value without the highest levels of managerial commitment both within their companies as well as up and down the supply chain” (Fawcett et al. cost. Hartley and Choi (1996) noted organizations that cooperatively participate in a supplier development activity may achieve greater results as opposed to suppliers who are coerced into the activity. . the more supplier capability improvement occurred. and technology.

delivery. supplier development outcome Cost related to quality.05 for projects focused on cost.162 Table 23 Summary Table of Hypothesis H4 Hypothesis H40: There is no relationship with the level of suppliers’ leadership attitude and the supplier development outcome Cost. Technology H4a: Higher levels of the suppliers’ leadership attitude will result in higher levels of Quality Rejected Hypothesis rejected based on correlation coefficient. in the areas of quality. and technology. Delivery Accepted Correlation coefficient values support the hypothesis for delivery but not for delivery. Technology The research results did not show statistically a significant relationship between suppliers’ level of participation and the results from supplier development projects in the area of cost. cost. delivery. Delivery Area of focus Support Quality Not Explanation of results Null hypothesis could not be rejected rejected based on probability values > .05. Correlation of Supplier Development Results With the Level of Assignment of Supplier Development Coordinator Understanding of level of coordinator’s presence was selected as a variable for the research due to the numerous authors advocating its importance in successful supplier . and technology. cost. delivery. cost. and technology. Rejected Null hypothesis rejected based on probability values < . and technology.

2003.. and technology. Trent. Easton. Wagner (2003) asserted supplier participation in buying firms may lead to lowering cost.. in the process map for supplier development. . The results (see Table 24) from the t-test indicated level of assignment of supplier development coordinator showed statistically a significant relationship to the results achieved from supplier development activities focused on delivery.. The t-test did not support there was statistically a significant relationship between level of assignment of supplier development coordinator and results achieved from supplier development activities focused quality. Research indicates when management follow-up and oversight is high. organizations have a higher understanding of the goals of the supplier development activity (Easton). 2000. 2004. Monczka et al. Easton (2000) noted from research the importance of appointing a champion for supplier development activities. Wagner. emphasized the importance of reaching agreement on the key project and securing the joint resources to execute.163 development processes (Burt et al. Based on a review of literature. improved quality. Monczka et al. 2002. cost. 2003). and reduced developmental cost.

H5a: Higher levels of assignment Delivery. and technology. cost. and a high for technology. cost. and technology Quality Not rejected Null hypothesis could not be rejected based on probability value >. Support Explanation of results development coordinator from the technology buying firm and the supplier development outcome in the areas of quality. cost. delivery.05 Accepted The results indicate a medium level of correlation for delivery and cost.05.164 Table 24 Summary Table of Hypothesis H5 Hypothesis Area of focus H50: There is no relationship with Delivery. Correlation of Supplier Development Results With the Level of Suppliers’ Dependence on Buying Firm Easton (2000) posited based on empirical research that there is a positive relationship between the dependency level of the supplier on the customer firm and the actual execution of the knowledge learned through supplier development activities. delivery. 05. Rejected based on p value Rejected >. Quality and technology. and Rejected Null hypothesis not supported based on probability values <. of a supplier development coordinator by the buying firm will result in higher levels of supplier development outcome in the areas of quality. . the level of assignment of a cost.

The research showed that coercive power may also be applied in a manner that provides a supportive outcome to the supplier development project (Bates & Hollingsworth. Correlation of Supplier Development Results With the Level of the Collective Variables Identified in Hypotheses 1-6 The analysis of data indicates statistically there is a relationship collectively between all independent factors and the dependent variables. Table 26 presents a summary of the findings from the research. 2004).165 McHugh et al. (2003) noted organizations may want to diversify the customer base to avoid the domination. cost. The results (see Table 25) from the t-test did not support there was statistically a significant relationship between level of suppliers’ dependence on buying firm and results achieved from supplier development activities focused quality. The results indicate that dependency may not be as significant to supplier development results as suggested from past research. and technology. delivery. .

Explanation of results Technology Not rejected Technology Rejected . delivery. delivery.05. and technology. Quality Delivery Cost Rejected Rejected Rejected Rejected based on p value >. Delivery Cost Not rejected Not rejected focus Quality Support Not rejected Null hypothesis not rejected based on probability value > . and technology.05. cost.166 Table 25 Summary Table of Hypothesis H6 Area of Hypothesis H60: There is no relationship with the suppliers’ level of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) and the supplier development outcome in the areas of quality. cost. H6a: Higher levels of dependence on the buying firm (based on sales percentage of revenue sold to buying firm) to the buying firm will result in higher level of supplier development outcome in the areas of quality.

(c) supplier participation. delivery. With the industry demands for perfect quality. and technology. the finding shows that supplier development activities support the organization by achieving improvements in the areas of quality.02. Support Rejected Explanation of results Null hypothesis was rejected based on p value < . (d) leadership attitude. and technology. (e) buying firm’s coordinator presence.167 Table 26 Summary Table of Hypothesis H7 Hypothesis H70: There is no collective relationship with the level of (a) information exchange. (e) buying firm’s coordinator presence. H7a: Higher collective levels of (a) information exchange. the supplier development activities resulted in a 48% improvement in first-time quality at the suppliers’ manufacturing location. cost. and (f) suppliers’ dependence on buying firm and the supplier development outcome in the areas of quality. delivery. (d) leadership attitude. and technology. (c) supplier participation. (b) understanding of goals. In addition to the results of the research. cost. cost. Accepted Based on the values of the coefficient of determination and significance. there is a collective relationship. In the area of quality. and (f) suppliers’ dependence on buying firm will result in a higher supplier development outcome in the areas of quality. delivery. this type of . (b) understanding of goals.

In the area of cost reduction. The savings may be passed on to the customer or used to offset increasing commodity price pressure. delivery. and technology. Suppliers’ level of understanding of goals showed a positive relationship . Many of the projects produced significant savings for the organization. The research also indicates that the independent variables of information exchange and buyer firm’s coordinator presence have a positive relationship with the dependent variables of supplier development results in quality. In the area of delivery. supplier development projects resulted in 13 of the 18 projects producing excellent results and 4 of the remaining 5 projects producing nominal results. Finally. cost. 22 of the 27 supplier development activities resulted in a significant improvement in delivery performance. The suppliers’ level of participation and leadership attitude was shown to be important with supplier development projects focused on delivery. The overall results show the benefits of having an effective supplier development program. and technology improvements. cost. the 35 supplier development projects reported an average savings of 9%. Improvements through supplier development practices allow the organization to focus on fewer suppliers for re-sourcing activities. Implications of the Study for Theory and Practice The findings of the study indicate that supply management organizations may be capable of achieving significant improvements from supplier development programs. which could have a positive impact on cash flow.168 improvement supports the value proposition provided to the customer. Improved delivery performance often can result in lowering inventory needs. The study indicates the importance of information exchange and supplier development engineers’ presence at the supplier location to achieve acceptable results from supplier development activities. in the area of technology.

169 with projects focused on delivery improvement. When delivery of product is in jeopardy, the first task tends to be to obtain a clear understanding of where the organization is at with shipments and what is required. It is not surprising that obtaining a clear understanding of the goals would be particularly important when there is a delivery issue. Suppliers’ dependence on the buying firm was not shown to have a positive relationship with results from supplier development projects. Perhaps the most significant finding of the research for supply chain professionals is that buying firms cannot focus on only one factor to drive improvements from supplier development practices. The factors were generally shown to have medium to low correlation with the results achieved from the supplier development projects. Collectively, the factors were shown to have a relationship to the supplier development results. Thus, supply chain professionals who have a process that focuses collectively on these factors may produce results that improve their value propositions to the customer. This is supported in the literature review by past research. Krause and Ellram (1997) identified top leadership support, cross-functional effort, and effective communications as important antecedent variables to successful supplier development results. Easton (2000) identified extensive supplier support as a significant factor related to supplier development results. Information exchange and effective communication was identified as an important factor related to supplier development results (Forker & Mendez, 2001; Krause et al., 2000; Narasimhan et al., 2001). The research supports the results from past research and augments the findings by providing data that support or reject the importance of the factors with supplier development projects focused on quality, delivery, cost, and technology.

170 The findings support key suggested supplier development steps identified by Handfield et al. (2000) such as (a) form cross-functional teams, (b) meet with suppliers’ top leadership, (c) identify key projects, (d) define details of agreement, and (e) monitor status and monitor strategies. These steps promote information exchange, encourage understanding of goals, ensure proper participation, solicit leadership support prior to starting a project, and ensure the buying firm can support the project. The research findings show these steps to be important and have a positive correlation with successful supplier development results. Although the factors in the research offer some explanation for positive supplier development results, the data indicate there are others not identified in this research. Firms developing supplier development processes would be well served in identifying standard work that takes into account factors such as supplier leadership support, information exchange, level of supplier participation, monitoring supplier’s leadership attitude, and level of support. As an example, standard work that requires a project kick-off meeting with the supplier’s top leadership to ensure buy-in is one method to gain support to ensure the proper focus for success. This activity allows the organization to focus on several of the factors researched. The meeting can consist of information sharing and discussions to collectively understand the goals, acquire the right level of participation, and assess the suppliers’ leadership attitude for the project. Followup sessions to check on the progress of a project and validating that the right resources are being applied appear to be important in achieving the desired results from supplier development projects. The research showed a negative correlation between supplier development results focused on cost reduction and level of participation by the supplier.

171 This may suggest that cost reduction discussions should be executed with a minimal number of participants. Based on this research, organizations that create standard work to execute projects that include a focus on information exchange, participation, and ensuring proper resources are in place to support the supplier development process may be more successful. Recommendations for Organizations Leaders of organizations should understand factors that contribute to the successful results of supplier development approaches. Improvements in the area of quality, delivery, cost, and technology can be achieved through successful utilization of supplier development resources. Organizations dissatisfied with the performance of their supplier base may be well served to establish a supplier development program. The improvements generated can help improve the organization’s competitive position. The results seen in the current research with an average of 48% first-time quality improvement, 9% cost-reduction improvement, significant delivery, and technology improvement provide additional support for the position that an effective supplier development program can allow an organization to achieve improvements in suppliers’ performance. When considering developing a supplier development program, organizations should include elements such as those suggested by Handfield et al. (2000), such as ensuring the supplier’s leadership is in support of a project prior to starting, forming cross-functional teams with appropriate members, allowing information to be shared freely, and ensuring proper resources are in place to support the project. Processes that allow supplier development engineers to respect confidential information to allow the

172 free exchange of information should also be considered. Additional tools such as cost modeling, where the supply chain professional can estimate cost, may be effective methods to address where information related to cost is restricted by the supplier organization (Zsidisin, Ellram, & Ogden, 2003). Finally, the research indicates that a supplier development program requires a comprehensive approach where several factors are incorporated into the process. Limitations of the Research The current research, like all research, has limitations to consider. First, the research focused on six factors shown to be of importance for organizations to consider in relationship to supplier development results. Many factors were not considered in the research. The bias toward these factors may have resulted in not identifying factors that are important to achieving supplier development results. Second, the research method did not provide data on the interaction of the variables. In addition, many of the supplier development projects had multiple focuses (quality, delivery, technology, and cost), resulting in interactions based on the focus that was not considered. Third, the population came from a single large automotive supplier. The limited participation resulted in statistical confidence levels of 90% and +/- 10% precision. Therefore, the results need to be verified through additional research on a larger population. The impact of the limited sample size should be considered when evaluating the results of this research. Fourth, the research did not consider factors from a supplying firm’s perspective. Fifth, the study involved the evaluation of factors based on a model that did not consider the buying firm’s size, the supplier firm’s size, and sector of business. The

the survey may also require improvements in the structure. Future Research Opportunities Based on the findings and conclusions of the research. Researchers should consider these limitations when constructing future research models. The survey tool may require improvements to be executed over a wider audience. researchers should continue to evaluate other organizations and industries to determine if the conclusions are consistent. By evaluating the finding with other industries. manufacturing). size of customer. Second. The survey may also require modifications to the dependent variables for the industry being studied. Factors such as type of customer (service vs. the conclusions may be further supported or determined not to be consistent. To avoid the introductory meetings. the researcher determined that an introductory meeting (conference call) was necessary to explain the intent of the research and survey instrument. survey results were self-reported. and social experiences (Kemppila & Lonnqvist. if research could be conducted from the start .or understated due to the influences of attitude. More effective analysis may provide additional insight. the research used a survey specifically developed and used for the first time. the following recommendations are offered by the researcher. Although every effort was made to ensure only qualified supplier development engineers or supply chain professionals completed the survey that possessed knowledge of the results of the project.173 current research is from a single large automotive supplier’s perspective. values. 2003). and size of supplier may offer additional insight. The self-reported measures may be over. First. Sixth. In administering the survey.

it is not known if a lack of trust causes suppliers to increase the price when quoting new business. researchers could explore other measurement goal constructs that may offer improved reliability and validity. and others may provide more insight. This factor may be important and require further investigation. causing suppliers to increase prices when being quoted. Volumes not materializing. researchers could obtain real-time results. For example. Trust may have implications to other areas in supply chain management that were not the focus of this research but that may be of interest. For example. actual savings received by buying firm. additional factors such as supplier’s trust in the customer firm could be understood. 50% of the participants noted that cost information was not openly shared by suppliers with the customer firm in projects focused on cost improvements. cost of quality. There have been numerous studies related to supplier development. Third. . programs that are delayed. There may be a relationship worth exploring. and lack of information sharing may cause investment that does not allow adequate return. Additional factors could be applied to the research model and tested.174 to the finish of a project. which may provide insight into the causal nature of the factors. Dependent variables such as parts-per-million returns. Fourth. future researchers should continue to evaluate other factors believed to influence supplier development results. By following projects from start to finish. which would eliminate the need for survey respondents to rely on archived data and memory for the survey answers. Reviewing past research may offer improved constructs not considered in the current research.

improved performance in suppliers shipping on time. such as an average of 48% improvement in first-time quality. or delivery issues. Qualitative research in comparing organizations may provide supply chain leaders greater understanding to obtain greater benefits from the supplier development focus. The following question may require additional research: How does an organization configure a supplier development approach that brings a strategic advantage to the organization? If supplier development is used only as a defensive measure to deal with problems such as commodity pressure. The current research showed significant improvement occurred as a result of the supplier development activities. there appears to be no question that supplier development activities produce results. Finally. such as the foundation of philosophy behind the decisions on how supplier development is applied. then how does it develop suppliers to be eager to help transform the organization they serve? Liker and Choi (2004) provided some insight into the following questions: How does an organization react when faced with a potential supplier increase? Is the philosophical position to reject the increase and start global sourcing activities to find an alternative supplier or is it to investigate and understand the suppliers’ problem and look for solutions? Does one approach lead to a competitive advantage with the supply base? What constructs are important to base the supplier development effort . The research may also provide knowledge to address the issue of building trust with suppliers. Liker and Choi (2004) defined a supplier-partnering hierarchy when selecting suppliers for development. 9% cost reduction. as more organizations organize supplier development approaches. research could be conducted on the strategy of intent in developing suppliers.175 Fifth. current quality. and technology improvements.

supplier participation. leadership must ensure there is a focus on factors that contribute to successful results. and buyer firm’s coordinator presence with a comprehensive approach utilizing all factors to achieve acceptable supplier development results. supplier leadership attitude. The current study contains results that support case study research conducted in the past by Krause and Ellram (1997). In a competitive market.176 around? Should firms embrace the need for both the buying firm and suppliers to be profitable? Would such a construct develop a higher level of trust? Would it allow buying firms to build longer term relationships where there are advantages to both the buying firm and the supplier? The researcher strongly believes selected suppliers can offer a strategic advantage if nurtured through supplier development efforts. Supplier development is a strategic approach to execute improvements to achieve desired results. The rationale for supplier development is well documented in literature and supported in the current research. The current study presented data that indicate the importance of information exchange. organizations should place importance on driving improvements at supplier locations. . organizations need capable suppliers to support the needs of their value propositions. Concluding Comments To optimize the outcome generated through supplier development programs. With purchase parts representing an estimated 50 to 60% of the cost of sales in the United States.

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There is no risk or direct benefits to individuals participating in this research project. Vice President. Candidate Adress Approved:________________________________ Date:________________ Printed Name: Position: Sidney Johnson Vice President. UNIVERSITY INSTITUTION OR ASSOCIATION June 7. Global Supply Management .188 APPENDIX A: PERMISSION TO USE PREMISES. I am requesting permission to interview Supplier Development Managers to review data on past supplier development projects to verify results documented in the supplier development database and identify project leaders. John Novak Doctor of Management. However. NAME. Global Supply Management Mr. 2007 Delphi Corporation Attn: Sidney Johnson. please sign and date this letter on the line below. The supplier development project leaders would be requested to fill out a survey to provide information related to the factors being studied. ORGANIZATION. If you approve this request. AND/OR SUBJECT OF FACILITY. Respectfully. The purpose of the research is to explore factors that may contribute to successful supplier development results. The survey will take approximately 20 minutes to complete. this research may provide valuable insight and information to improve supplier development results. The findings of this study will be published but will not contain names of participants. The field of supply chain management may benefit from the findings of this research. Johnson I am a student at the University of Phoenix working on a Doctor of Management in Organizational Leadership with a plan to execute a research project related to supplier development.

.189 The permission form has been signed and dated. The organization and approval name is blacked out for confidentiality purposes. The signed and dated form is available if legally necessary.

and/or technology advancement. PARTICIPANT 18 YEARS OF AGE AND OLDER Dear. If you choose not to participate or withdraw from the study at any time. I value your participation and thank you for your contribution to this research project. The research model I am using is a quantitative approach to investigate the relationship between the independent variables of (a) information exchange. Your contribution will be to validate results from a data base search and to identify supplier development leaders that will be identified to complete a survey for this research project. (b) understanding of goals. Thank you for your interest in my dissertation research that will be conducted to fulfill the partial requirement of the University of Phoenix’s Doctor of Management in Organizational Leadership degree. delivery. However. the potential risks to me as a participant. The research may be published but your name will not be used and your results will be maintained in confidence. delivery. cost. _____________________________________________ Signature of Interviewee ______________________________________________ John Novak ______________________ Date ______________________ Date . cost. My study is entitled “Correlational Study of Organizational Factors that Influence Supplier Development: A Buyers Firm’s Perspective”. There are no other agreements. There is no risk or direct benefits to individuals participating in this research project. written or verbal. and I give consent to my voluntary participation in this study. and the means by which my identity will be kept confidential. and technology. I. prisoner or cognitively impaired) and that I give permission to voluntarily serve as a participant in the study described. (c) supplier participation. related to this study beyond that expressed in this consent and confidentially form. Your participation in this study is voluntary. and (f) supplier dependence on buying firm and the dependent variable of supplier development results in quality. If there are any questions or comments feel free to call me at xxx-xxx-xxxx or xxx-xxx-xxxx in the evening. The field of supply chain management may benefit from the findings of this research. The purpose of the study is to investigate factors that may correlate to successful supplier development results in the area of quality. understand the above explanation. (d) supplier leadership attitude.190 APPENDIX B: INFORMED CONSENT. (e) coordinator presence. the undersigned. My signature on this form also indicates that I am not a member of any protected category of participants (minor. By signing this form I acknowledge that I understand the nature of the study. During a 1 to 1-1/2 hour in-person sessions I will verify results achieved in the past three years of supplier development activities and seek to identify the leader of each project for survey participation. you can do so without penalty or loss of benefit to yourself. Through your participation I hope to gain an understanding of how the factors relate to supplier development results. I value your contribution to my research project and look forward to your participation. this research may provide valuable insight and information to improve supplier development results. pregnant women when considered part of a designated research group of women.

I want to emphasize the following points: The research project is being conducted for academic purposes (the survey is part of John Novak’s doctoral dissertation). John Novak . Data will only be provided to Company X in summary form. No individual data will be released. A summary of the results will be shared with you if you attach a business card with the completed survey. A third party survey representative will be utilized to ensure confidentiality of individual information.191 APPENDIX C: PRE-NOTIFICATION SURVEY LETTER Date << Name>> <<Street>> <<City>> <<Customer Organization>> Dear <<Buyer Representative (name)>> Company X in conjunction with John Novak is conducting a research project that examines factors in relation to supplier development results. Sincerely. The survey is being conducted by Company X and John Novak because of their interest in the advancement of supply management practices. It should take no longer than 30 minutes to complete. Thank you for your contribution to this very important research. I believe the results will be helpful to our organization because it may give guidance to Company X on how to improve its supplier development practices. I strongly request you to participate in this study and to fill out a questionnaire that will be sent to you within the next Five days. If you chose not to participate you can do so without penalty or loss of benefit to yourself. Participation is strictly voluntary. The survey has no right or wrong answers and no hidden agendas I would be grateful to you for completing the questionnaire and returning it immediately.

and (f) supplier dependence on buying firm and the dependent variable of supplier development results in quality. Thank you for your interest in my dissertation research that will be conducted to fulfill the partial requirement of the University of Phoenix’s Doctor of Management in Organizational Leadership degree. and technology. delivery. By electronically signing this form I acknowledge that I understand the nature of the study. pregnant women when considered part of a designated research group of women. I value your contribution to my research project and look forward to your participation. the undersigned. (c) supplier participation. cost.192 APPENDIX D: INFORMED CONSENT. and I give consent to my voluntary participation in this study. understand the above explanation. (b) understanding of goals. and the means by which my identity will be kept confidential. The purpose of the study is to investigate factors that may correlate to successful supplier development results in the area of quality. related to this study beyond that expressed in this consent and confidentially form. The field of supply chain management may benefit from the findings of this research. written or verbal. delivery. prisoner. The research may be published but your name will not be used and your results will be maintained in confidence. and/or technology advancement. However. this research may provide valuable insight and information to improve supplier development results. I strongly request your participation in this study by completing the attached survey. PARTICIPANT 18 YEARS OF AGE AND OLDER (SURVEY) Dear. The attached survey should take no longer than 30 minutes to complete. The research model I am using is a quantitative approach to investigate the relationship between the independent variables of (a) information exchange. the potential risks to me as a participant. If there are any questions or comments feel free to call me at xxx-xxx-xxxx or xxx-xxx-xxxx in the evening. Candidate _____________________________________________ Date:_____________________ Participants Name: Type in name to acknowledge acceptance to participate in research Must be electronically signed and dated prior to filling out the survey . Your participation in this study is voluntary. or cognitively impaired) and that I give permission to voluntarily serve as a participant in the study described. cost. you can do so without penalty or loss of benefit to yourself. There is no risk or direct benefits to individuals participating in this research project. Through your participation I hope to gain an understanding of how the factors relate to supplier development results. (e) coordinator presence. My study is entitled “Correlational Study of Organizational Factors that Influence Supplier Development: A Buyers Firm’s Perspective”. (d) supplier leadership attitude. John Novak Doctor of Management. If you choose not to participate or withdraw from the study at any time. I value your participation and thank you for your contribution to this research project. My electronic signature on this form also indicates that I am not a member of any protected category of participants (minor. I. There are no other agreements.

.000 >$500.000.000 >$500. .000 >$10.000 >$5. . B. .000 North America.000. Europe.000. Focus of supplier development project: Quality.Midpoint 8 – Total success of technology development project 0 1 2 3 4 5 6 7 8 D.000 >$1.000 >$100. 2.<$5.100% of product shipped on time 0 1 2 3 4 5 6 7 8 7. South America 5.000.<$1. : 0 – No execution of technology development project 4 . In response to the survey questions.000 >$50. 4.000 .000. C. Date supplier development project completed: _Must be within the past three years. 6.000. Supplier Name: Supplier Development Project: All questions below pertain to your relationship with this supplier as it pertains to the supplier development project.000.<$100. Delivery Improvement The result of the Supplier Development Project was . please consider only the supplier development project named above.000. Region of manufacturing location: Results of supplier development Project: A. 1.No delivery improvement 4. 3.000 .<$10.193 APPENDIX E: SUPPLIER DEVELOPMENT SURVEY To be filled out based on data mining and supplier development manager/procurement professional interviews: Section 1. Section 1 was filled out prior to the survey based on data in files collected on the supplier development project and other data bases available.000 . 0. Delivery.000.000 . .Midpoint 8.000.000 . Quality: Cost: _ % of first time quality improved __ % of annual purchase value saved Technology Development The results of the Technology Development project were .000. Cost. Asia Pacific. Technology Procurement professional assigned to supplier development project: Category of purchased parts supplied by firm: Annual Supplier sales revenue: Less than $500.000.<$50.<$500.000 .

Supplier Name: Supplier Development Project: All questions below pertain to your relationship with this supplier as it pertains to the supplier development project. (participant selects a number 1-10 representing the level the person reads supply chain management literature) 0 . .Midpoint 4 5 8–every day without fail 8 2 3 6 7 Procurement professional assigned to supplier development project: Level of buying firm information exchange: Scale 0 . 3. Delivery. Section 1 was filled out prior to the survey based on data in files collected on the supplier development project and other data bases available. . Customer/supplier formal forums resulted in .Never 0 1 Start of Survey: 1. : 0 – No information exchanged 4-Midpoint 8 – free exchange of information 0 1 2 3 4 5 6 7 8 e. Focus of supplier development project: Quality. Example question: Read the question and then assign a number that best fist the completion of the sentence. Technology 4 . : 0 – No information exchanged 4-Midpoint 8 – All information needed was exchanged 0 1 2 3 4 5 6 7 8 d. . . . The results of the customer feedback exchange has been the supplier allowing . I read literature about supply chain management . . The supplier development activity has resulted in the supplier allowing . .No information exchanged 0 1 2 3 b. . . : 4-Midpoint 4 5 8 -All information needed was exchanged 7 8 0 .194 8. : 0 – Allowed no information to be exchanged 4 .Midpoint 8 – Allowed all information needed to be exchanged 0 1 2 3 4 5 6 7 8 c. . The supplier development activity experienced . : 0 – No information exchanged 4-Midpoint 8 – All information needed was exchanged 0 1 2 3 4 5 6 7 8 What kind of supplier information was exchanged? . .8 a. please consider only the supplier development project named above. 6 When working to resolve an issue the supplier firm . Level of supplier dependence on buying firm: % of sales sold to customer firm Section 2: You were identified as a procurement professional that led a supplier development activity. . Cost. In response to the survey questions. 2.

. . 0–No understanding 4-Midpoint 8–Complete understanding 0 1 2 3 4 5 6 7 8 What area were the goals identified in? 5. . of what it wanted from the supplier development activity. . : Scale 0 .8 d) When the suppliers was approached the top leadership demonstrated . . . . . . 0 – 0% of the time leading the project 4-Midpoint 8–100% of the time leading the project 0 1 2 3 4 5 6 7 8 Are there any additional comments you would like to make in regard to this research and supplier development? . : 0-No understanding of the goals 4-Midpoint 8– Complete understanding of the goals 0 b) 1 2 3 4 5 6 7 8 Based on pre-work performed prior to the supplier development activity the supplier firm had . .8 a) The criteria used to measure the supplier development project resulted in the supplier having . Level of participation by supplier firm: Sales Product Engineering Manufacturing Quality Control Other 6. . . Level of suppliers leaderships attitude: Scale 0 . : 0 – No leadership support 4-Midpoint 8–Total leadership support 0 1 2 3 4 5 6 7 8 Purchasing Material Management Process engineering Supplier Quality Other e) During the execution phase of the supplier development project top leadership demonstrated .8 g) The supplier coordinator assigned to the program spent . 0–No leadership support 4-Midpoint 0 1 2 3 4 5 6 7 8–Total leadership support 8 What level of top leadership was involved in the project? 7. . .195 What kind of supplier information was not exchanged? 4. . . Level of understanding of goals: Scale 0 . 0 – No leadership support 4-Midpoint 8–Total leadership support 0 1 2 3 4 5 6 7 8 f) Top leadership demonstrated through involvement . Level of Supplier Development Project Leaders presence was . 0–No understanding of the goals 4-Midpoint 8–Complete understanding of the goals 0 1 2 3 4 5 6 7 8 c) The customer had .

please input the information below and a copy will be sent to you: Name: Address: Thank you again for your participation in this research project.196 I am grateful to you for completing the questionnaire and sending it in to be included in the research. Thank you for your contribution to this very important research. Sincerely. If you would like an executive summary of the results of the research. John Novak .

V4. V7. V5. V3. V5.703 df 6 36 Mean Square 2083. V5. b.232 Std. V2 ANOVAb Model 1 Regression Residual Sum of Squares 12500.015a Total 36570.651 42 a. V6.585a R Square . All requested variables entered.491 668. V4. V3. .197 APPENDIX F: ANOVA TABLE (QUALITY) Quality Regression.116 Sig. Predictors: (Constant). V6. Dependent Variable: V1 .949 24069.342 Square . Enter a. V7. V2 b. V2a a. V4. V3. Error of the Estimate 25.85736% Variables Removed Method . V6.603 F 3.Dependent Variable Variables Entered/Removedb Variables Model 1 Entered V7. Predictors: (Constant). Dependent Variable: V1 Model Summary Adjusted R Model 1 R .

720 .220 .174 V2 V3 V4 V5 V6 V7 a.245 -1.000 4.192 Coefficients Beta t -.300 .361 1.485 .942 .002 2.952 3.126 1. Dependent Variable: V1 .003 .057 .051 -1.056 . Error 21.951 3.650 3.151 -5.267 .968 .146 .368 16.111 3.743 1.428 4.322 .198 Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) B -20.195 -.348 . .068 -4.343 Std.741 -.388 Sig.

0453 0.1007 0.0487 0.5207 0.8403 0.1775 Quality 0.4737 2.r vaules t-values Prob values Dep .5811 0.0004 0.2081 1.4105 1.8007 0.0593 .r vaules t-values Prob values equals significance Cost 0.1151 -0.0685 0.9424 0.2028 0.2553 1.7809 0.0133 0.4607 0.8240 0.3256 Delivery 0.4941 2.8419 0.0044 0.2134 1.7252 6.0024 0.0799 0.5165 0.2173 0.0847 0.4146 Technology 0.7936 0.8776 0.0000 0.4092 1.2987 0.7838 0.2231 0.4667 3.2674 1.1516 0.0004 0.3107 1.4960 2.2224 0.3566 0.r vaules t-values Prob values Supplier Att .1988 1.2846 -1.3026 1.0386 0.0509 0.r vaules t-values Prob values Eng Supp .1619 0.199 APPENDIX G: t-TEST TABLE t-computed = r / {square root of [(1-r2)/(n-2)]} Info Exchange .r vaules t-values Prob values Funct Areas .4881 3.0235 0.1301 0.0043 0.0317 0.r vaules t-values Prob values Und Goals .3985 0.1916 0.8564 0.0459 0.0347 0.5944 0.7056 0.4502 2.0378 0.6034 3.3795 2.0092 0.

V4.188 64. Predictors: (Constant).698 3.479 df 6 20 Mean Square 9. V7. V6. V6. V4.689a R Square . Dependent Variable: V1 . Dependent Variable: V1 Model Summary Adjusted R Model 1 R . V3. Enter a.796 Variables Removed Method . V5a a.200 APPENDIX H: ANOVA TABLE (DELIVERY) Delivery is the Dependent Variable Variables Entered/Removedb Variables Model 1 Entered V7. V2.474 Square . V4. V2. b. V3. V7. Error of the Estimate 1. . V3. V5 ANOVAb Model 1 Regression Residual Sum of Squares 58. All requested variables entered.224 F 3.667 26 a. V6. V2. Predictors: (Constant).008 Sig.029a Total 122. V5 b.317 Std.

020 .099 -.276 . Dependent Variable: V1 .265 .156 .120 Std.333 .245 .234 . .639 .246 .448 -.214 Sig.433 .386 .017 .229 Coefficients Beta t .585 .710 -.065 1.239 V2 V3 V4 V5 V6 V7 a.316 .659 .395 1.178 .201 Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) B .885 .949 .190 . Error 1.517 .475 1.376 .302 .251 .227 1.

Error of the Estimate 6.Cost as Dependent Variable Variables Entered/Removedb Variables Model 1 Entered V7. V6. V6. V7. Dependent Variable: V1 Model Summary Adjusted R Model 1 R . V2. V3. V7.971 34 a. V3.783a R Square .531 Std. .611 1057. V5a a.413 Sig.000a Total 2736. V4. V4. V3. V2. b.763 F 7.614 Square .361 df 6 28 Mean Square 279. V5 b. V6. All requested variables entered. Enter a. Predictors: (Constant). V4.14515% Variables Removed Method .202 APPENDIX I: ANOVA TABLE (COST) Regression. Predictors: (Constant). V5 ANOVAb Model 1 Regression Residual Sum of Squares 1679. Dependent Variable: V1 . V2.935 37.

173 .023 -.131 Std.006 .148 3.495 . .746 .040 .336 1.859 -. Error 5.000 .632 1.072 2.405 .672 .425 .001 .143 -3.498 .203 Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) B -7.204 2.653 -.507 .519 .287 .171 .652 V2 V3 V4 V5 V6 V7 a.456 Sig.059 Coefficients Beta t -1.161 2.125 -.122 -5.315 1.720 . Dependent Variable: V1 .904 .

VAR00003. Dependent Variable: VAR00001 Model Summary Model 1 R . VAR00005a a. VAR00002. VAR00006.003a Total 80.483 F 7. Dependent Variable: VAR00001 .615 1.159 Sig. Predictors: (Constant).310 df 6 11 Mean Square 10. VAR00005 ANOVAb Model 1 Regression Residual Sum of Squares 63. VAR00007.Technology Dependent Variable Variables Entered/Removedb Variables Model 1 Entered VAR00007. Error of the Estimate .21767 . Enter Variables Removed Method a. VAR00007.204 APPENDIX J: ANOVA TABLE (TECHNOLOGY) Regression. VAR00003. All requested variables entered. VAR00004. b.690 16.892a R Square . VAR00006. VAR00005 b.796 Adjusted R Square Std. VAR00004. VAR00003. Predictors: (Constant). VAR00004. VAR00002.685 1. . VAR00002.000 17 a. VAR00006.

034 Std.279 4.414 .218 .085 .395 1.570 .077 .732 .227 .061 Coefficients Beta t 1.793 -.002 .989 .205 Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) B 5.266 .852 .139 . . Error 2.014 .396 Sig.647 .383 -1.569 -1.428 -1.544 .194 .085 .700 VAR00002 VAR00003 VAR00004 VAR00005 VAR00006 VAR00007 a.034 .936 -1.904 .892 2.664 2. Dependent Variable: VAR00001 .458 -.124 .