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CHAPTER 5
SUPPLIER RELATIONSHIP MANAGEMENT
Figure 5.4:
The supplier development process [16].
The supply management team has to ensure that it has a clear understanding of
the concept of supplier development and what it involves. This will ensure that
only those programmes that they have a thorough grasp of and the capacity to
complete will be implemented. If these aspects are not satisfactory, it is best to
wait until the employees concerned are ready.
Supplier development may be implemented as a once-off project or as a
continuous long-term programme. This being the case, the outcome of the
selection process for supplier development may best be reflected in the following
three categories:
• The supplier is suitable for immediate development: This is a supplier who
would have scored highly in meeting the specified selection criteria and is
therefore critical and strategic to the organisation. Developing this supplier
typically provides suitable rewards for the organisation. This supplier will
immediately be contacted to begin negotiations regarding the development
programme.
• The supplier has been placed on hold as a potential candidate for future
development: This supplier will have obtained a moderate or average score.
The supplier is important, but may not be categorised as strategic to the
organisation. The supplier will not be discarded but will possibly be suitable
for a future supplier development programme.
• The supplier is not suitable for development investment: This is a supplier
who does not merit any supplier development. Any efforts to develop such
a supplier will waste resources. The supplier will have obtained a very low
score in the selection criteria.