A

DISSERTATION
ON
“Study on Supplier Relationship Management of Havells India Ltd Industry”

IN THE PARTIAL FULFILMENT OF THE REQUIREMENT OF

MASTERS OF BUSINESS ADMINISTRATION (MBA)

UNDER THE GUIDANCE OF

DR.PADMAKAR SAHARE

SUBMITTED BY

SAHIL MANOJ RAWAL

MITU21MSCM0006

2021-23

SUBMITTED TO

MIT COLLEGE OF MANAGEMENT, PUNE

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3
 DECLARATION

I Sahil Manoj Rawalof Master of Business Administration Semester - IV of MIT College of

Management, Pune, hereby declare that I have successfully completed this Dissertation on
“Study on Supplier Relationship Management of Havells India Ltd Industry”

IN HEAVY ELECTRICAL INDUSTRY” during the Academic Year 2022-23. The

information incorporated in this report is true and original to the best of my knowledge.

Place: MITCOM, Pune Mr. SAHIL MANOJ RAWAL

Date: PNR NO: MITU21MSCM0006

(MBA-SCM - 2022-23)

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 ACKNOWLEDGEMENTS

To list who all have helped me is difficult because they are so numerous, and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channels and fresh
dimensions in the completion of this project.

I take this opportunity to thank MIT-ADT UNIVERSITY for giving me the chance to do this
project.

I would like to thank my Dean,. Dr. Sunita M Karad for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank. Dr. Padmakar Shahare for his moral support and guidance.

Lastly, I would like to thank each person who directly or indirectly helped me in the
completion of the project especially my Parents and Peers who supported me throughout
my project.

Date: SAHIL MAOJ RAWAL

Place: MITCOM, Pune

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 TABLE OF CONTENT
Sr.
Particulars Page No.
No.
1 Executive Summary 7
2 Introduction 8
4. Literature review 24
3.1 Literature reviews
5. Research Methodology 30
6. Data Analysis and Interpretation 34
7. Findings 52
8. Recommendations and suggestions 55
9. Conclusions 58
10 bibliography 61
11 appendix 64

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List of Tables and Figures

Tables

S.No Particulars Page No.

1. Table-1 Showing Data about the different initiatives that the firms in 35
oil and gas industry

Figures

S.No Particulars Page No.

1. Figure-1 Shows the latest trends that the oil , gas and energy firms 13
adopt to gain market capitalization.
2. Figure – 2 Logo of Petrofuel Group as their representation. 18
3. Figure-3 Shares data about the SCM practices by Petrofuel (T) 49
Limited.
4. Figure-4 shows data about different resource and waste management 50
techniques that the firms use to have a green and sustainable supply
chain.

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 INTRODUCTION

1.1Conceptual Background

“We are now entering the era of ‘supply chain competition’. The fundamental

difference from the previous model of competition is that an organization can no

longer act as an isolated and independent entity in competition with other

similarly‘stand-alone’ organizations. Instead they need to create value delivery

systems that are more responsive to fast-changing markets and that are much more

consistent and reliable in the delivery of that value requires that the supply chain as a

whole be focused on the achievement of these goals.” (Christopher, 1998:28)

The above quotation highlights the challenges which companies are facing, the notion

that no business is an island (Håkansson & Snehota,1995). Market is very competitive

and existing players know the pulse of the market, hence one needs to be striving at all

fronts to remain be in competitive era. The concept of Supplier Development has been

conceived to provide a new dimension in order to conceptualize the array of business

process, mandatory for the accomplishment of organisation’s objective, performance

and business results, to ultimately make one self-competitive. This thesis had an

emphasis on ‘Win-Win partnership.’

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Buyer-Supplier explicitly identifies the need to focus on the achievement of pre-

determined mutual performance objectives; which is well associated and connected

with Quality, Delivery, Support, and Commercial. Original Equipment Manufacturers

(OEMs) believe that the implementation of Supplier Development will support

their suppliers in the overall development of their business and manufacturing

processes, adapting new technology and new products, which ultimately contributing

to mutually enhanced future competitiveness and success.

As the business environment has become quite competitive, supplier development has

been considered as the key business drivers (Van Wheel,2006), by the OEMs.

Supplier development is now considered as the strategic tool for improvement towards

end customer satisfaction, mutual profitability for both supplier-buyer and effective

competitiveness in today’s challenging market (Giunipero & Brand,1996).

This has become quite evident now that supplier performance plays an important role

towards overall achievement of any Original Equipment manufacturer (OEM). They

very significantly affect the profitability and ability of the OEMs to satisfy the

customer (Foster, 2001).

The current trend and competition has motivated OEMs, to strengthen their

relationship with their major suppliers and must initiate supplier development

programme to supply chain system and overall performance and capabilities(Carr et

al,2008). The purpose of doing this is to create awareness among the suppliers about

the business trends , opportunities , better returns and long term understanding to

create a platform for ‘Win-Win’ situation and at the same time , this initiative will

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have higher product quality and lower total cost (Larsson,1994).

1.2Studies On Supplier Development

Author’s (Year) Industry Contribution

( Country)

Feigenbaum (1982 ) Automotive Suppliers are the vital part of a total quality
approach. The companies with best suppliers
(UK) in terms of their capabilities are likely to have
a competitive advantage.

Philips Real Estate Coined the phrase Partnership. It is based on

(Europe) the principle that both the parties can gain
(1985) more through co-operation than by
separatelypursuing their own interests. It
pushes a desire for both parties to improve
continuously the product and clearly to
understand their responsibilities.

Masson Electronic One company, that had developed partnership

(China) approach, achieved better results than those
(1988) who did not implemented, claiming that
supplier development was fundamental to the
difference in performance.

Bevan Motor Noted that the relationship between Japanese

(Japan) motor manufacturers and their suppliers is
(1989) entirely different from their counterparts in
Europe, USA and Far East. Some Highlights
are:

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  There are fewer suppliers; which
is congenial to a more
manageable situation.
 Working relationships are very
close and promote problem
solving.
 Suppliers were totally
committed to their customers'
objectives.
Huckett Xerox / Adopted a partnership approach with their
Rayleigh suppliers to improve quality and to adopt a
& Just-In-Time (J.I.T.) philosophy.
(USA,UK)
Harriso

(1989)

Lyons, Car (USA) To achieve world class competitive status a

new order of supplier development
relationships was necessary. This was
Krache characterised by team decision making, longer
term contracts, higher levels of outsourcing
nberg& and increased independence

Henke

(1990)

Harriso Electronics Investigated the role of quality in the supplier

(Japan) performance of various Original Equipment
n Manufacturers(OEM),referring to quality as
(1990) the exchange of the right goods at the right
time between one level in the supply chain and
the next.

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1.3Scope of the Study :-

This research is proposed to find out the various dimensions of supplier development

with reference to the heavy electrical industry in India. Further, rational approach

for this study will be advanced, where existing literature will be reviewed so as know

the various factors which affects the buying firm’s performance and how the

capabilities of supplier can be enhanced.

Furthermore, a framework is also proposed, which will signify the past experience and

consequences of supplier development. The assertion for the framework is the

proximity of the supplier with their buyers and vice-versa, which indicates, supplier

development is an important tool which ultimately results in overall growth of both

supplier and buyer simultaneously by improving the quality, reducing the cost,

reducing delivery time, and various other functional values which are in offerings.

This is somehow associated with the enhancement of mutual commitments, trust

transparency towards financial terms. The framework is more to focus on how to

develop or identify a system or model to set up a platform that will create a ‘Win-Win’

situation for both Buyer and Supplier.

The core focus of the study is to analyse the importance of supplier development, its

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associated risks and substantial benefits for both buyer and supplier. The study tests the

research framework in the field from the perception of the suppliers. The target respondents

have been broadly divided into dedicated to a large buyer and not dedicated to any buyer.

CHAPTER - 2
LITERATURE REVIEW

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 LITERATURE REVIEW

2.1Introduction

This chapter reviews the literature on supplier development. The main purpose of the

review is to build a deep understanding of the concept and practices of supplier

development through work done by previous researchers and draw abroad framework

of our research. The comprehensive literature review provides a guideline to

understand various aspects of the topic and the work already done. It also helps in

correlating the various fundamentals and thereafter to create synthesis among them.

After rigorous exercise and extensive study, foundation for developing the conceptual

framework is laid and the same will be empirically tested with various hypotheses

formulated.

Feigenbaum (1982) identified that; international competition has emerged as a

combination of both traditional form (product versus product) as well as less visible

form of competition involving company's skills in implementing a total quality. He

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 further highlights that companies capability in maintaining supplier’s capabilities hold

the key to competitive advantage.

An elaborated and comprehensive literature review is carried out with the following

objectives :

 To develop the understanding about the Supplier development concept

prevalent across the industries.

 To know about the process flow and tools practically available for supplier

development.

2.2Concept of Supplier Development

Supplier development is the process of working with certain suppliers on a one-to-one

basis to improve their performance for the benefit of the buying organisation. It is

closely associated with supplier relationship management and partnering.

One of the first authors who introduced the term supplier development in academia was

Leenders who stated that supplier development if properly used could “be an extremely

effective purchasing tool” (Leenders, 1966 reprinted 1989:47), and that therefore is an area of

high relevance for purchasing research. Since Leenders’ article, there has been an increasing

interest for supplier development activities both in academia (Axelsson&Håkansson,1984;

Hines, 1996; Krause & Handfield, 1999; Lilliecreutz & Ydreskog, 1999; Monczka & Morgan,

2000) and in practice (Gadde & Håkansson, 1998; Larsson, 1999). Supplier development may

be defined as any effort of a buying firm to increase the performance and capabilities of the

supplier( Krause DR,1997).Supplier development is a broad concept aimed at strengthening

the performance of subcontracting firms not only by enabling them to acquire the skills and

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capacities required of them by the main contracting (or client) enterprise but also by raising

their awareness and assisting them in reducing their costs.(United nation industrial

Development organization, 1999).Supplier development is the process of working with

certain suppliers on a one-to-one basis to improve their performance for the benefit of the

buying organisation. It is closely associated with supplier relationship management and

partnering (Chartered Institute of Purchasing and Supply,2002).

2.3Mutual Growth Perspective

Relationship establishment between customer-supplier is an important tool for mutual

growth of both. Researchers had views that having cordial association and developing

this further is tough task and time taking. Groocock and Bache (1986) in their

research into purchasing and quality management found no correlation between

ratings awarded to suppliers and their actual performance. Bevan (1987) stated that

supplier development has its origin in Japan and it is founded on mutual co-operation

between customer and supplier. He also said that Japanese follows the principle of

trust and this they prefer more than contractual terms and condition. Dale and

Lascelles (1988) suggest that the companies should treat their suppliers as long term

business partners. They further recommend following key areas that should be

addressed to ensure product quality improvement through supplier development:

(i) To investigate the supplier base to ensure continuity of product against the

standard required.

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(ii) To improve communication and feedback, internally and between the business

unit and the suppliers.

(iii) To eliminate supplier complacency.

(iv) To develop customer objectives and strategy for Supplier development.

(v) To develop and improve customer credibility.

Figure 2.4: Link between the degree of rewards and the degree
of commitment for a supplier and a customer.

From Figure (2.1) it can be made out that there are various options and ways to

cooperate, which ranges from normal relationship with customer just to provide with

set price for a particular product to an association in which the customer and supplier

17
are mutually committed and optimising resources to accomplish defined objectives.

The words partnering and partnership are used to describe generally activity depicted

on the right side of the 'commitment' axis of the Figure.

Johnston and Lawrence (1988) carried out a study of the use of value added

partnerships as a competitive strategy by Italian firms, concluded that these firms

achieved a superior performance by working closely together to manage the flow of

goods and services along the entire value chain for an industry.

2.5The Customer-Supplier Relationship Performance

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2.6Quality Management

Supplier should be well briefed with the needs and objective of their customer. As

prime objective of the organisation is to achieve their goals, their efforts should go

hand in hand to bring their suppliers also to same platform of understanding. To have

the firm and clear understanding, there may be very specific needs of the suppliers

which their customers had to take care and ensure for all best support to them. One

major factor which is to be taken into prime consideration is Quality

management.According to Deming (1950), customers and suppliers major task was

to identify the differentiator factor of their own offerings and those of competitors.

They eventually recognized “Quality” could be the important differentiator factor.

Schonberger (1982) studying Japanese manufacturing techniques found that most

OEM's are pursuing supplier reduction programmes with the motive to develop closer

relationships, higher volumes etc. When the OEM's strategy is based on J.I.T. then

additional pressure is on the supply chain.

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 CHAPTER - 3
RESEARCH METHODOLOGY

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 RESEARCH METHODOLOGY

3.1Introduction

Supplier development aspects had been discussed in the last chapter of literature

review. Through literature review, research gap and research variables had been

identified. This chapter will design the research framework and the methodology

which is to be employed during the progress of the research work.

According to Sekaran (1992), research is an organised, systematic, databased, critical,

scientific inquiry or investigation into a specific problem, undertaken with the

objective of finding answers or solutions to it. The process of research activity is a

sequence of steps designed and executed with the objective of finding solutions to the

issues which are of concern to the subject of research.

A methodology of research can be designed depending upon the requirement and how

it suits to the given situation [Checkland, 1994].This will be unique and specific to the

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 research. The methodology requires iterations during the research stages and also

define the role of the associates. According to Bignell and Gregory(1991), a

methodology should address the objectives of the research, provide review and

modification with due justification and also provide guidelines for handling similar

issues.

3.2 Primary Data

The Data is collected from Petroleum Industry Experts and People Involved in
Supply Chain of Petroleum Products through structured Questionnaire,
Telephonic Talks & Personal Visits.

Secondary Data

The Secondary Data is gathered from the following sources:

1.              Books & Reports

2.              Case Study Analysis

3.              Journals, News Papers & Company’s official websites. 

3.3Research tools and techniques

The research design refers to the overall strategy that researcher choose to

integrate the different components of the study in a coherent and logical way,

thereby, ensuring to effectively address the research problem and successfully

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 accomplish the research objectives; it constitutes the blueprint for the

collection, measurement, and analysis of data ( William M.K. ,2006).

CHAPTER – 4
DATA ANALYSIS AND INTERPRETATION

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 DATA ANALYSIS AND INTERPRETATION

The date collected through survey has been analysed using qualitative and quantitative tools.

4.1Statistical Tools
For data analysis various mathematical and statistical tools and techniques were

identified used. These tools were experimental in drawing the inferences from the data

collected. Regression analysis was conducted to correlate with the hypotheses. This

test is being used to analyse the relationship between several independent variables

and a single dependent variable. Then t-Test also conducted to judge the significance

of a sample mean, in case of a small sample.

This chapter presents the research design adopted in this study. Starting with the

research questions, it provides the objectives of this research and its scope. A brief

discussion of the pertinent variables, backed with literature support, has been followed

by the research model. The purpose of this chapter is to discuss the research

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methodology which can provide a logical route for accomplishing the research

objectives. The approach designed for the research is more methodological. It had

been thought well before and also the structure of approach well planned-off to

conclude with relevant findings which would ultimately help the progress of the

research and to enhance the better aspects of supplier development.

CHAPTER-6
FINDINGS

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 FINDINGS

The present chapter deals with the data collected and analyzed in order to test

hypotheses and reach the conclusion of the study. The extensive work done in terms of

questionnaire framing, getting feedback from the competent authorities, collection and

compilation of data, thereafter the significant work of analysis of collected and

compiled data commences.

This chapter divides into two broad sections starting with qualitative analysis using the

graphical presentation of profile questions, representing the views of the respondents

regarding their preference for the HEI and exclusive association with the buyer

company and test of significance of seven factors on the basis of dedicated and non-

dedicated groups of suppliers. The second section deals with the Regression Analysis

to find out the impact of independent variables on dependent variable. Two regression

models are developed using two control variables, i.e. the length of association of the

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respondent with HEI and the macro environment variables.

This part of the chapter gives the subjective views of the firms interacted. The objective is

to determine whether suppliers exclusive and non-exclusive association with buyers, years

of association, government policies and various factors of suppliers expectation from their

customers have any impact on the responses on association with Heavy Electrical Industry.

Various analysis tools have been considered to evaluate the data to justify this objective,

which includes Frequency table, pie chart and t-test.

CHAPTER – 7
RECOMMENDATIONS AND CONCLUSION

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 RECOMMENDATIONS AND CONCLUSION

This chapter presents the research findings and conclusions along with the significant

contribution of the research as well as recommendations. The chapter divides into six

sections.

First section covers the research findings drawn from the literature review, survey,

qualitative and quantitative analysis of suppliers’ perception regarding exclusive and

non- exclusive association with buyers. On the basis of findings of literature review,

significant dimensions affecting the suppliers’ preference have been identified and

administered in the form of questionnaire to get the response of the suppliers. The

collected data has been analyzed through qualitative and quantitative techniques and

its findings have been broadly discussed in this section along with the findings of

literature review. Second section deals with the synthesis of conclusions drawn from

both literature review and survey that the researcher has identified during the period of

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research. Section three includes significant research contribution to the body of

existing knowledge that would help the future researcher to further proceed with the

new dimensions of the research in this area. Fourth section offers recommendations.

Section five describes the limitations of the research and lastly section six gives the

scope for further research.

CHAPTER – 7
BIBLIOGRAPHY

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 BIBLIOGRAPHY

Out of total sixty eight (68) respondents, majority 66% respondents have been associated with
the industry for more than a decade. And less than 10 % were in the industry for less than
five years. It highlights the importance of the responses. 2. Out of 68 overall respondents, it was
found that 30 respondents are dedicated supplier and remaining 38 suppliers are non-dedicated
supplier
1. A large section of the respondents (73.5%) would prefer to remain in the industry

whereas only 1.5% may not continue. The rest were also positive about their

intention to continue.

2. On response to reason to prefer the Industry, majority respondents (48.5%) quoted

better future and 29.4% of respondents claimed for better understanding of the

industry is their main reason to stick to the industry. Only smaller % of

respondents discussed about the comfort and lucrativeness of the industry.

30
3. Majority of the respondents (77.9%) would choose industry knowledge as their

main reason to operate in HEI. Entrepreneurial desire (13.2%), Better returns

(5.9%) and Parental Business (2.9%) are also specific reason to choose HEI by the

respondents.

4. Analysis of the responses shows that 5.26% of the respondents supplies to less

than 3 customers, 13.16% of the respondents supplies between 3-8 customers and

81.58% of the respondents supplies to more than 8 customers.

CHAPTER – 7
ANNEXURE
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32
 ANNEXURE

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Bevan, K.A. (1989). A New Incremental Fit Index for General Structural Equation Models.

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Bevan, M. (1987). Honeymoons and the liability of adolescence: a new perspective on

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Management Review, 16 (2), 442–468.

Bevan, M. (1989). Understanding Business Markets: Interaction, Relationships and

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Bignell, V. and Gregory, M. (1991). Structure and design of manufacturing systems:

manufacturing-a transformation. The Open University, Milton Keynes, UK.

Brokaw, J.H. and Davisson, K. (1977). Creating and managing a high-performance

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345– 367.

Carlisle, J. A. and Parker, R. C. (1989). Beyond negotiation: redeeming customer-

supplier relationships. Chichester: Wiley.

Carr, A.S., Kaynak, H. and Harvey, M.G. (2008). Communication methods, information

sharing, supplier development and performance: an empirical study of their

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relationships. International Journal of Operations and Production Management, 27

(4), 346–370.

Carr, A.S., Kaynak, H. and Homburg, C. (2004). Buyers-Supplier Relationships and

Customer Firm Costs. International Journal of Operations and Production

Management 27 (4), 346–370.

Carter, J. R. and Narasimhan, R. (1990). Purchasing in the International Journal of

Purchasing and Materials Management.

Carter, J. R. and Narasimhan, R. (1993). Purchasing and materials management's role

in total quality management and customer satisfaction. Center for Advanced

Purchasing Studies.

Checkland, P. (1994). Systems theory and management thinking. American Behavioral

Scientist, 38(1), 75-91.

Christopher, M. (1998). Logistics and supply chain management: Strategies for

reducing cost and improving service.

Cole, P. (1983). Deere on the run: quick response manufacturing drives supplier

development at John Deere. IIE Solutions, 31 (7), 24–31.

Creswell, J. W. (1994). Qualitative and quantitative approaches.

Crosby, P. B. (1979). Quality is free: The art of making quality certain. New York.

Dale, B. G. and Lascelles, D. M. (1988). A review of the issues involved in quality

improvement. International Journal of Quality & Reliability Management, 5(5), 76-94.

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