The Process of Supplier Development

            In supply chain management, the supplier development is considered to be extremely critical so that a world class and successful supply chain is achieved. The criticality of suppliers in the process of supply chain management itself asks for supplier development process to be initiated so that suppliers are able to become world class suppliers, and they can gain capabilities to support supply chain management system at the highest level (Ericksen, 2016). To define the process of supplier development, it is important to define the supplier development itself. The term has been used for many decades in the supply chain management, and many researchers have given various definitions. One definition was given in 1993 by Watts and Hahn, which stated that “A long-term cooperative effort between a buying firm and its suppliers to upgrade the suppliers’ technical, quality, delivery, and cost capabilities and to foster ongoing improvement.” (Mohanty, Gahan and Choudhury, 2014).

        As mentioned above that various definitions have been given to supplier development and one of the definitions stated as “activity that a buyer undertakes to improve a supplier's performance and/or capabilities to meet the buyer's short - and/or long-term supply need.” (Wisner, Tan and Leong, 2018). It is also important to understand that supplier development programmes can be of two kinds, one they can be process oriented, which means they are done to achieve certain process with better efficiency, or they can be result oriented, where overall purpose is to develop suppliers so that better results can be obtained by the supply chain management (Lysons and Farrington, 2010). After looking at the supplier development programme initiated by Nissan, it can be said that it was mix of both strategies, like they wanted to improve their design process in UK, so that they can get better results in terms of getting better designs for their product to meet customers’ demands (Taylor, Taylor and Brunt, 2001).

Supplier Development and Required Organizational Structures

        It is important for every organization to understand that they need certain organizational structures before implanting any kind of supplier development programmes. If organizational structures do not have required elements in its structure, then it is quite difficult to implement any organizational structure, and things can go totally wrong. The overall structure of an organization performs different functions, and these functions can improve its productivity and efficiency. The organizational structure should have the ability to support overall supplier development process (Hanks, n.d). The Cogent initiative taken by the Nissan was a good one, but it was important for the management to create a suitable environment through their leadership, which facilitates Cogent on all levels, and no issues are faced in this regard. When employees get support from their management, they feel more valued, motivated and work harder for the given tasks. So, this is how Nissan was able to integrate their “Cogent” programme by creating a suitable management and organizational environment (Erridge, Fee and McIlroy, 2001)

        Another important part of any organizational structure is its communication. It is important to have a better communication process so that ideas and any changes with any programme are communicated with clarity. If employees, suppliers and all stakeholders would not be able to understand the purpose of a supplier development programme, then it’s true meaning cannot be passed on. The communication process needs to be accurate so that message is clearly shared with each other and all stakeholders can remain on the same page. Any lack of communication is deadly for any programme to be successful (Lambert, 2008). When Nissan Cogent programme is reviewed closely, it was evident that Nissan had better communication with its network of suppliers. Both were on the same page to have same meaning and understanding of ideas and concepts being applied in Cogent, and they were responding well to each other. This better communication between suppliers and Nissan helped them to understand the desires of their customers, and work together to achieve their supply chain performance goals (Nissan Cogent YouTube Video, 2013)

        The other important element of an organizational structure is that they have group of people, who have different kinds of skills, and they collaborate those skills, and work together so that they can be able to achieve a common objective. An organization has different departments and all departments perform different kind of functions, but it is important to understand that all their functions are for achieving a common business goal. The good thing for Nissan was that they have a good cross functional group of people to work together so that they can achieve their targets related to cogent programme. Their marketing, sales, R&D & manufacturing departments should good collaboration to achieve the better supply chain management (Rapra Technology, 1999). One more crucial part in the organization is cooperation and development with their suppliers to achieve high end performance in their supply chain. If things are going well and suppliers are getting good support from their manufacturers, then they both can develop a great supply chain management process with desired outcomes (Jürgens, 2013). Nissan had great level of cooperation and development with their network of suppliers, which helped them to integrate cogent programme (Nissan Cogent YouTube Video, 2013)

Linking Theory with Practice of Supplier Development

        A cogent programme was initiated by Nissan, which was their co-development programme for their suppliers, and it had various objectives to achieve. The first objective was to enhance the design performance as well as cooperation with their suppliers along with Cranfield University. The other purpose was to make sure that their cycle time is reduced as much as possible and they are also able to make designs, which are more attractive for their customers. They also wanted to mitigate any kind of communication gaps with their suppliers network so that they all work together to achieve the goals set by the cogent programme (Nissan Cogent YouTube Video, 2013). Looking at different suppliers development concepts and theories, it was evident that suppliers network was bit reluctant to communicate on various issues with the Nissan management. The co-development process adopted by the cogent programme was based on different process, perceptions, targets as well as enhancing their design and come up with better performance in the supply chain management, which is part of any supply chain management process.

Conclusion of Supplier Development

        After reviewing Nissan’s Cogent Programme and looking at it with practical theories and concepts related to supplier development, it can be said that programme had the capability to be successful, as it had required ingredients, but they needed to makes sure that everything is in place in their strategy. The company was able to develop good cooperation and development with their suppliers, which helped the programme to excel at good speed, and come up with desired results, which were expected by the cogent programme.

References of Supplier Development

Brandes, O., Brege, S. and Brehmer, P.-O. (2013) 'The Strategic Importance of Supplier Relationships in the Automotive Industry', International Journal of Engineering Business Management, vol. 5, no. 17.

Ericksen, P. (2016) The Case for Supplier Development, [Online], Available: https://www.industryweek.com/supplier-relationships/case-supplier-development [14 December 2018].

Erridge, A., Fee, R. and McIlroy, J. (2001) Best Practice Procurement: Public and Private Sector Perspectives, illustrated Edition edition, Gower Publishing, Ltd.

Hanks, G. (n.d) Supply Chain Organization Structure, [Online], Available: https://yourbusiness.azcentral.com/supply-chain-organization-structure-27199.html [14 December 2018].

Jürgens, U. (2013) New Product Development and Production Networks: Global Industrial Experience, illustrated Edition edition, Springer Science & Business Media.

Krause, D.R. and Handfield, R.B. (1999) Developing a World-class Supply Base, illustrated Edition edition, Center for Advanced Purchasing Studies.

Lambert, D.M. (2008) Supply Chain Management: Processes, Partnerships, Performance, Supply Chain Management Inst.

Lysons, K. and Farrington, B. (2010) Purchasing and Supply Chain Management, Pearson Education India.

Mohanty, M.K., Gahan, P. and Choudhury, S. (2014) 'Why most of the supplier development programs fail in discrete manufacturing – findings from selected Indian discrete manufacturing industries', International Journal of Management Science and Engineering Management, vol. 9, no. 3, pp. 201-211.

Nissan Cogent YouTube Video (2013) Nissan COGENT, [Online], Available: https://www.youtube.com/watch?v=COEiObzybjw [14 December 2018].

Rapra Technology (1999) Automotive Supplier 99: Brands Hatch, UK, 15th-16th September 1999, iSmithers Rapra Publishing.

Taylor, D., Taylor, D.H. and Brunt, D. (2001) Manufacturing Operations and Supply Chain Management: The Lean Approach, illustrated Edition edition, Cengage Learning EMEA.

Teller, C., Kotzab, H., Grant, D.B. and Holweg, C. (2016) 'The importance of key supplier relationship management in supply chains', International Journal of Retail & Distribution Management, vol. 44, no. 2, pp. 109-123.

Wisner, J.D., Tan, K.-C. and Leong, G.K. (2018) Principles of Supply Chain Management: A Balanced Approach, 5^th edition, Cengage Learning.

Wyatt, C.M., Evans, S., Johnson, A.S. and Jukes, A.S. (1997) 'Co-development: The COGENT initiative', IMECHE SEMINAR PUBLICATION, 101-110.