Critical elements of supplier development in the Malaysian automobile industry : Parts and components procurement and supplier development Practice at Proton【Article】
JIDC_09_02_05_Abdullah.pdf 795 KB
Maharjan, Keshav Lall
Supplier development is defined as any effort of a buying firm with regard to its supplier to increasethe performance and/or capabilities of the supplier to meet the buying firm's supply needs. The procure-ment practice of the buyer is critical and acts as a window to nurture the supplier development effort, itis also crucial in determining the type of relationship that the company has with its suppliers. This paperexamines the procurement practice at PROTON for parts and component inputs at the domestic level.To improve the existing buyer-supplier relationships it is first necessary to review the procurement prac-tices of the firm. The effort to improve the relationship will usually include key suppliers as joint prob-lem solvers utilising problem-solving models the firm's attitude towards suppliers may change fromconfrontational to one of trust and partnership. However, the improvements and solutions for the prob-lems rely not only on the buyers' side, but also on the suppliers' side. This paper (1) discusses theimportance of supplier development, (2) reviews literature to identify potential critical elements of sup-plier development, and (3) discusses the procurement practice at PROTON-the first national carmaker inthe Malaysian automotive industry.