Third-party involvement in lean supplier development

Abstract

Developing business relationships with suppliers is crucial to exploit the full potential of lean management. Inspired by mature lean firms, such as Toyota, lean adopters have been employing lean supplier development, a set of initiatives aimed at transferring lean and continuous improvement capabilities to suppliers. Key issues in lean supplier development are collaborative relationships, the use of activities to transfer lean capabilities, and implementation steps. These issues have been discussed in a variety of literature streams, focusing on activity structures used by advanced lean firms to develop single suppliers. Specifically, research has considered the level of dyads or the development of large supply networks and associations. However, lean supplier development also involves relationships with additional suppliers, other suppliers or customers, and other organizations. These third parties, alongside the buying firm, initiate and drive lean supplier development. Against this backdrop, this study explores the involvement of third parties in lean supplier development. The study underlying this thesis is based on a case study and two literature reviews. Paper 1 reviews the involvement of third parties in the supplier development literature, identifying ways in which they can be involved and discussing the reasons for their involvement. Paper 2 discusses the key elements of lean supply and how they can be interpreted from an industrial marketing and purchasing perspective (i.e., the industrial network approach). Paper 3 explores a case of lean supplier development employed by a firm with evolving lean capabilities, and the role of third parties in the process, comparing their initiative with the Toyota-style supplier network. The theoretical framing of the thesis is the industrial network approach, which explores relationships in a network context, and regards them as belonging to a broader network as a set of connected relationships. A conceptual model based on the industrial network approach and literature on triads is developed and applied in the analysis, which focuses primarily on the third-party effects, connections, and types of actors, such as an additional buyer, additional supplier, and ancillary organization. It is found that lean supplier development involves deep supplier relationships, direct and advanced supplier development, and relationship management, with mature lean firms like Toyota providing inspiration. The literature has identified various triads, with third parties involved in different ways regarding their types and connections. The results of the present study show that an additional buyer can contribute positively to the engagement of the focal supplier in lean supplier development. In addition, an additional supplier can share superior capabilities and transfer knowledge to other suppliers, leading to strong(er) network ties. Ancillary organizations provide important teaching, training, and resources in lean supplier development, and those with high levels of lean capabilities play a crucial role in initiatives of buyers that are not yet mature in terms of lean capabilities. This thesis contributes to lean supplier development research by using a network level of analysis to systematically explore third-party involvement. It expands the current view of the focal buyer as the lean master, and sheds light on the third party as a fundamental role. The study relies on and contributes to the industrial network approach and literature on triads by examining third-party involvement. Finally, this thesis provides some important guiding principles for managers of buyers, suppliers, and third parties involved in lean practices and supplier development.