Partnerships in the motor industry: Opportunities and risks for suppliers

Partnerships in the motor industry: Opportunities and risks for suppliers

Partnerships in the Motor Industry: Opportunities and Risks for Suppliers Fiona Leverick and Rachel Cooper P ARTNERSHIPS BETWEEN MANUFACTURERS and t...

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Partnerships in the Motor Industry: Opportunities and Risks for Suppliers Fiona Leverick and Rachel Cooper

P ARTNERSHIPS BETWEEN MANUFACTURERS

and their suppliers have increasingly been placed on the business agenda, with much attention devoted in recent literature to competitive advantage gained through effective supply chain management.lm5 The acceptance of practices such as Just-in-Time and Total Quality Management pushes supplier-manufacturer relationships further into the spotlight, given that support from other members of the supply chain is critical in their implementation. Recent interest in supplier-manufacturer relationships also reflects a wider interest in collaboration management more generally, a topic which has dominated business literature in recent years as organisations have apparently tended to move away from adversarial relationships with suppliers and competitors towards a more co-operative way of doing business.‘-’ Our focus here is on supplier-manufacturer relationships within the U.K. automotive industry. The U.K. automotive components sector has annual sales of approximately G billion, accounted for by over 4000 individual components suppliers,l” suggesting that the management of relationships between manufacturers and their suppliers is likely to be a particularly pertinent issue. Indeed, authors such as Hyun” have argued that the management of suppliers is so much more complicated in the automotive industry than in other manufacturing sectors, simply because a vehicle is composed of so many components, approximately 15,000 separate parts. Accordingly, the nature and management of automotive supplier-manufacturer relationships is beginning to receive attention in the business literature,“l8 although most emphasis thus far has been devoted to U.S. and Japanese practices. Up until the early 199Os, considerable divergence was reported in the manner in which Japanese autoPergamon PII: SOON-6301(97)00092-7

motive manufacturers worked with their suppliers, compared to their U.S. and European counterparts. The typical U.S. and European model was one of short-term, relatively adversarial relationships between manufacturers and suppliers, with the majority of design and product development work undertaken by manufacturers and where the supplier is chosen on price considerations and merely told what to supply. The typical Japanese model might best be described as “partnership sourcing”,’ whereby a long-standing relationship is developed between supplier and manufacturer and suppliers become highly involved in product development and design. A number of more recent studies’1,14,‘“-Z4 of the worldwide automotive industry have suggested that international relationship management practices Long Range Planning, Vol. 31, No. 1, pp. 72 to 81, 1998 0 1998 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0024-6301/98 $19.00+0.00

might be converging towards the “Japanese” partnership sourcing model. Such recent evidence has tentatively identified a number of trends in the U.S. and (although reported on less frequently) the European automotive industry including increasing levels of and earlier supplier involvement in design and product development; the sourcing of components to single, rather than multiple, suppliers; the purchasing of complete subsystems from suppliers, rather than individual components: and closer, less adversarial relationships between suppliers and manufacturers, with a corresponding increase in, for example, information sharing. It is against this background that our study of the nature, extent and management of supplier involvement in automotive product design and development was undertaken. The research programme was initiated by Dr Jeffrey K. Liker of the Department of Industrial and Operations Engineering at the University of Michigan and involved respondents from U.K., the U.S. and Japan. Here, we focus on the U.K. participants in the study, given the relative scarcity of European research evidence compared to that detailing U.S. and Japanese practices. The article addresses two main aims. The first of these is to provide an up-to-date description of the nature of supplier-manufacturer relationships in the U.K. automotive industry and, to this end, considerable evidence of “Japanese-type” supplier involvement is provided. The second aim is to address the implications of this shift in the nature of supplier-manufacturer relationships. According to if the U.K. automotive industry is indeed Hyun,” changing in this manner, partnership commitments and effective supplier management become increasingly important. However, this is not solely a concern of automotive suppliers as Hyun implies. If the nature of relationships between suppliers and manufacturers are changing, then there is a need for both partiesmanufacturers and suppliers-correspondingly to develop their approach to relationship management. It is the intention of this article, based on the research findings, to suggest a number of relationship management issues suppliers and manufacturers should place on their agenda.

The Study In this study, data was collected from automotive components suppliers themselves, rather than from manufacturers as is more often the case. Indeed, the recent studies undertaken by Helper’6-‘8 stand out as some of the few concerned with obtaining the views of automotive components suppliers, although the focus of Helper’s work was on U.S. and not European firms. The decision to focus solely on suppliers and not also to survey manufacturers was taken partly for

reasons of time and cost and partly because it was considered that issues of relationship management from the automotive manufacturer perspective had already received a reasonable degree of coverage (for example in surveys of automotive manufacturers undertaken by Hyunl’; Cusumano and Takeishi13; Anderson Consultingz5; Birou and Fawcett”; Dyerz7). However, there is clearly scope in the future to examine specific supplier-customer relationships from the point of view of both the manufacturer and supplier involved in order to compare the two perspectives. Detailed questionnaires were mailed to a sample of 450 U.K. suppliers of manufactured automotive components during 1994. The sample of 450 suppliers was selected at random from relevant trade directories, companies’ annual reports and supplier lists, such as that published by the Society of Motor Manufacturers and Traders. Respondents were asked to answer questions regarding the component, termed Product X, which accounted for their company’s largest sales volume. They were also asked to complete the questionnaire with a specific automotive customer in mind, termed Customer A. Customer A was most commonly a vehicle manufacturer, such as Ford, Rover or Nissan. Eighty-eight usable responses were received from the total of 450 questionnaires sent to U.K. suppliers, a response rate of 20%. Table 1 provides a brief summary of sample characteristics. Full details of the

Complexity

of component

supplied (% of respondents)

Individual parts. Generic individual components or groups of non-assembled components (e.g. batteries, belts, gears, hinges, pistons, pumps, locks, seals, tires, fasteners, or cables).

33

Assembled

units. Generally part of a larger subsystem (e.g. airbags, disc brake callipers, seat frames, small motors, windscreen wipers, fans, or lamps).

38

Completesubsystems. Complete assemblies that can be installed intact in the vehicle (e.g. audio systems, fuel and emission systems, window systems, ignition systems, heating and air conditioning systems, or transmissions).

28

Identity of automotive

customer (o/oof respondents)

Ford Rover Nissan Other Not knowna

21 21 5 22 33

n=88. “Although the questionnaire stressed that responses would be kept entirely confidential, 33% of respondents preferred to keep the identity of CustomerA anonymous.

Long Range Planning Vol. 31

February 1998

in Cooper and research sample are contained Leverick.” In the next section of the paper, we focus in particular on the research findings concerning: The duration and nature of supplier-manufacturer relationships; ??The involvement of suppliers in design and product development; ??The price setting process; comsupplier-manufacturer ??The nature of munication; ??The level of external awareness among suppliers. ??

We then go on to consider the implications of these findings for relationship management practice.

Evidence of the Nature of SupplierManufacturer Relationships The Duration Manufacturer

and Nature of SupplierRelationships

Respondents were asked to provide information on various aspects of their relationship with their main automotive customer, referred to as Customer A. First, a measure of the relationship duration was obtained. The extent of mutual dependency between supplier and manufacturer was proxied by measuring the proportion of Customer A requirements supplied for the component in question and the percentage of the respondent’s sales revenue accounted for by Customer A. Respondents were also asked whether any of their own senior personnel had previously been employed at Customer A. Finally, suppliers were asked to estimate the likelihood of a number of consequences if their designs failed to satisfy Customer A, using a scale of 1 (not likely) to 5 (certain). Tables 2 and 3 summarise results relating to all of these issues. As Table 2 shows, there is some evidence that U.K.

Length and importance of relationship: Mean length of relationship with Customer A (years) % sales revenue from Customer A (mean) % Customer A requirements supplied (mean) % respondents with top managers employed by Customer A in the past Extent of relationship with other suppliers: Mean frequency of co-ordinating design decisions directly with other suppliers (i.e. not through Customer A) (Scale: I= almost never; 3 = half the time; 5 = always) n=88. Partnerships

in the Motor Industry: Opportunities

20.8 28.1 77.5 16

2.6

suppliers are developing close, long-standing trust based relationships with manufacturers. Somewhat surprisingly, the average length of relationship with Customer A among respondents was over 20 years. The extent of mutual dependence is illustrated by the fact that on average Customer A accounted for 28% of respondents’ sales revenues and respondents supplied 78% of Customer A requirements for Product A, the component in question. In addition, 16% of respondents actually had top managers who had been employed at Company A in the past. Researchers such as Hyun” have suggested that automotive manufacturers increasingly attempt to bring together the suppliers of individual parts within a system and have them co-operate in the delivery of a complete system to the assembly plant. To assess the extent to which automotive suppliers are working together with others in a network, respondents were asked to estimate the frequency with which they coordinated design decisions directly with other suppliers (that is, not through Customer A) on a scale of 1 (almost never) to 5 (always). The mean score achieved across respondents was 2.6, which approximates to just under half of all design decisions, providing some support for Hyun’s suggestion. When asked to indicate the most likely consequence if their designs failed to satisfy Customer A, two scenarios were jointly rated most likely: that “Customer A would provide design assistance” and that the respondent would “lose the next contract” (Table 3). The least likely consequence was that the respondent would “lose the current contract with Customer A”. The evidence here then is somewhat mixed, but with at least some indication of supportive previously relationship supplier-manufacturer assumed to be the province of the Japanese.

The Involvement of Suppliers in Design and Product Development A further section of the questionnaire was concerned with the extent to which automotive suppliers were involved in product development and design work for their largest automotive manufacturer, Customer A. Respondents were asked to provide information on the length and nature of any involvement in design and product development (Table 4) and their perceived levels of influence on design improvements when supplying components to Customer A (Table 5).

As Table 4 shows, there was extensive design and product development involvement among the sample of automotive suppliers, with 72% of respondents undertaking some product development work on Product X (the component they supplied to Customer A). Forty-one percent of respondents were entirely responsible for designing Product X. In terms of the

and Risks for Suppliers

If designs Likelihood Likelihood Likelihood Likelihood

fail of of of of

to satisfy Customer A: losing current contract losing next contract getting smaller contract next time receiving assistance from Customer A

(Scale: 1 = not likely; 3 = somewhat

Mean likelihood

Standard deviation

2.37 3.42 2.49 3.45

1.29 1.18 1.19 1.27

likely; 5 = certainly).

n=88.

timing of this input, on average respondents first influenced design decisions almost 26 months before the start of production. In 71% of cases, Customer A shared their overall vehicle concept with the supplier in question, this occurring on average over 23 months before the start of production (Table 4). Such findings clearly indicate a high degree of trust in the majority of suppliermanufacturer relationships and a type of relationship some way removed from the adversarial, short-term model described earlier. In addition, design communication between suppliers and manufacturers was high, with 79% of respondents participating in Customer A’s design review meetings and Customer A attending the respondent’s design review meetings in 64% of cases. Table 5 summarises the extent to which respondents felt that they had been responsible for improvements in various aspects of the automotive design process, rating their degree of responsibility on a scale of 1 (no responsibility) to 5 (100% responsibility). On average, respondents felt that they had played at least an equal role with the manufacturer in the case of improvements to product performance (a mean score of 3.3); manufacturability (a mean score of 3.7); product quality (a mean score of 3.5); reductions in product design time (a mean score of 3.0); and reductions in manufacturing costs (a mean score of 3.7). All of these findings provide further indications of a sub-

stantial level of involvement in design among sample of U.K. automotive component suppliers.

the

The Price Setting Process The approaches to pricing encountered by suppliers were investigated, in order to obtain an indication of whether competitive bids were the major pricing mechanism for automotive components, or whether other influences were important. To this end, respondents were asked to rate the respective influence of the five factors listed in Table 6 on the price paid by Customer A for the component supplied. A scale of 1 (no influence) to 5 (major influence) was used. As Table 6 shows, and perhaps somewhat surprisingly, respondents rated the greatest influence on price to be negotiation between supplier and manufacturer (a mean of 3.9). Target vehicle price also played a major role in the price set for Product X (a mean of 3.8). However, competitive bids were also rated as an important influence (a mean of 3.7) and these findings suggest that while some suppliers have encountered a more open approach to price setting, there is something of a polarisation of experiences among the sample.

The Nature of Supplier-Manufacturer Communication Respondents were asked about their communicating with manufacturers.

Length and nature of design involvement: % respondents undertaking product development work for Product X % respondents entirely responsible for designing Product X Timing of first design influence (mean months before production) Customer A shared overall vehicle concept (% yes) Timing of sharing vehicle concept (mean months before production) % respondents with influence over specifications for Product X % respondents participating in Customer A design review meetings % respondents with Customer A attending their design review meetings

experience of In particular,

72 41 26 71 23.6 65 79 64

n=88. Long Range Planning Vol. 31

February 1998

Mean level of influence Respondent influence on design improvements: Reduced engineering changes Better product performance Improved manufacturability Higher product quality Reduced time to design product Reduced manufacturing costs

Standard deviation

1.28 1.41 1.13 1.07 1.35 1.47

2.8 3.3 3.7 3.5 3.0 3.7

(Scale: 1 = 0%; 3 = 50%; 5 = 100%). n=88.

suppliers were asked to indicate the frequency with which they encountered each of the three different types of communication problems shown in Table 7 in their dealings with Customer A. These scores were then combined to develop the “communication problem index”, a measure of the overall level of communication difficulties. As Table 7 shows, the most frequently encountered communication problem was locating the appropriate person with which to communicate at Customer A; followed by changes in contact personnel and a lack of knowledge of technical issues among these personnel. The communication problem index of 2.33 indicates that such difficulties were a relatively frequent occurrence among the sample. There are clearly lessons to be learned on both sides, but the issue is an especially pressing one for manufacturers to address, given that they are likely to be involved in communicating with not one but many suppliers of components. Respondents were also asked about the extent to which they communicate electronically with manufacturers. As Table 8 shows, around 30% of those surveyed were exchanging design information with Customer A in electronic format. In addition, 28% had ensured that they used the same CAD system as

Mean level of influence

Standard deviation

3.4 3.7 3.2 3.8 3.9

1.33 1.36 1.03 1.03

Influence of: Previous price Competitive bids Production cost analysis Target vehicle price Negotiation (Scale: 1 = no influence). n=88.

influence;

3 = some

influence;

Partnerships in the Motor Industry: Opportunities

1.11

5 = major

Customer A and 15% had direct access A’s CAD database.

to Customer

The Level of External Awareness Among Suppliers Finally, in an attempt to assess the level of external awareness among suppliers, respondents were asked to identify their design competitors in Europe, the U.S. and Japan. As Table 9 shows, a significant proportion of U.K. components suppliers admitted to being unaware of whether or not they faced any competition. The problem was most apparent when respondents were asked to identify competitors in the U.S. and Japan, with 39% and 43% of components suppliers unable to identify U.S. based and Japanese based competitors respectively.

Summary and Implications

of Findings

The study of U.K. automotive suppliers identified relatively high levels of long term supplier-manufacturer relationships and interdependency; and relatively high levels of supplier involvement in and responsibility for product development and design. Yet the development of such close relationships with suppliers is not without dangers, as recent research has shown. The pitfalls of collaborative relationships have been well documented2g-3’ and include the risk that sensitive information is abused by a trusted partner;32 the loss of control over product development programmes and possibly a corresponding slippage in timescales. Manufacturers locked into a relationship with a particular supplier might also miss out on new technologies developed by organisations outside the partnership or may simply become over-dependent on the supplier in question.33 This is not to say that the issues identified above are inevitable consequences of developing long term relationships with suppliers; rather these risks make the need for effective relationship management more effective relationship manpressing. However,

and Risks for Suppliers

Frequency of: Communication problem A: Responsibility is dispersed and we must talk to different people in different locations at Customer A Communication problem B: Our contacts at Customer A are new on the job and we must re-establish relations Communication Problem C: Our contacts at Customer A are not knowledgeable about technical product design issues COMMUNICATION PROBLEM INDEX”

Mean frequency

Standard deviation

2.77

1.13

2.14

0.91

2.12

1.01

2.33

0.77

(Scale: I= never; 3 ? ?half the time; 5 = all the time). n=88. “The communication problem index was developed as a measure of the overall level of communication between suppliers and manufacturers and was calculated by (Problem A+Problem B+Problem Q/3.

agement takes time and resources and there is always the danger that the increased administrative burden actually lengthens the process of product development.2g~34 The next section of the article identifies a number of relationship management issues which need to be addressed by manufacturers and suppliers if they are to minimise the dangers of working together so closely. Some of these issues are pertinent entering into collaborative for all organisations relationships of whatever type and tend to crop up again and again in discussions of partnering practice. Here, we draw on a recent study of collaboration management undertaken by researchers at the Manchester School of Management.g*‘g330*31,34~35Other issues are relevant primarily to suppliers and manufacturers in the automotive industry and are drawn from the research reported in this article.

Lessons for Relationship Management Partner

Selection

Assessing the compatibility of the respective collaborating organisations in terms of culture, procedures and working practices should be a consideration at the outset of any partnership. It has been suggested that for organisations to work closely together, there has to be some degree of cultural fit or

% % % %

difficulties

compatibility.36 Thus, there is clearly an argument for manufacturers to assess the suitability of a particular supplier in advance of developing a close relationship or involving that supplier in the product development process. This is not, however, the same as saying that for organisations to work effectively together, their culture should be identical. According to Pudney3”, both manufacturer and supplier should bring something different and there should be enough difference to create synergy from the relationship. Several automotive companies, he states, have found that too close a “cultural fit” can create a lack of urgency in terms of innovation and lead to complacency. Suppliers may also be able to learn from the manufacturer’s way of doing things and vice versa. It is also worth considering in partner selection that not all automotive suppliers will necessarily be suited to partnering and not all will be capable of undertaking autonomous product development. According to Liker and Wasti,37 Japanese automotive manufacturers have recognised this and tend to be selective in the suppliers with which they choose to develop relationships, increasingly involving only a relatively small amount of their suppliers in the process of product development. Whether it can be predicted in advance that two companies will be well suited to developing a partnership is another matter. Some indication of the respective organisational cultures and styles of working should have been gained by

respondents receiving designs from Customer A in CAD format respondents sending designs to Customer A in CAD format respondents with access to Customer A’s CAD database respondents with same CAD system as Customer A

30 35 15 28

n=88.

Long Range Planning Vol. 31

February 1998

/

% of respondents % of respondents % of respondents

78

\

22 39 43

unable to identify European based competitors unable to identify U.S. based competitors unable to identify Japanese based competitors

n=88.

and supplier alike, even if their past relationship has been primarily transaction based. However, it is not until supplier and manufacturer actually begin the process of working together more closely that they will truly come to learn about the capabilities and practices of the other. Here, an openness to organisational learning is of particular importance, as supplier or manufacturer comes to recognise that there is not necessarily one “correct way” of doing things, as is the need to take something of a “step-by-step” approach, building partnerships gradually as familiarity and trust between companies increase. manufacturer

Communication The need for frequent communication between parties has been identified in numerous studies as a requirement for effective partnerships. In the study reported in Littler and Leverick,g frequent communication was the second most important discriminating factor between “successful” and “less successful” collaborations. However, the research reported here provides evidence of a number of communication difficulties experienced by the sample of U.K. automotive suppliers. It may be that the communication problems identified in Table 7 could be lessened, at least, by giving more priority to the role of acting as a liaison point in both supplier and manufacturer. Pudney”’ suggests that each partner designates a senior individual to act as “partner manager”, the main channel of contact and co-ordination between the parties. Clearly an effective “partner manager” would need to possess a variety of skills, given the mix of personnel from different organisational and professional cultures with which he or she might be required to deal. These would be similar in nature to those required in the “collaboration champion” identified by Littler and Leverick’ and would include technical competence, tact, diplomacy, negotiation, leadership and so on. In addition, there is a need for regular progress meetings, whereby suppliers actually sit down with manufacturers and discuss their relationship as well as their performance on key variables and tasks. Such meetings may also provide a forum for the exchange Partnerships

in the Motor Industry: Opportunities

of suggestions about product and process improvements. The level at which such communication takes place is also an issue of significance. Certainly for any collaborative partnership to be successful, the support of and periodic communication between senior management in the partnering organisations is vita1.36 Communication is also important at lower organisational levels and here emphasis might be on building familiarity and “social” links, rather than the administrative communication undertaken by key players, such as the “partner manager’J.32 As a final point, the research also identified that electronic communication is a significant relationship management tool among at least some of the sample. It may be that those suppliers and manufacturers which have yet to embrace such facilities are at a competitive disadvantage.33

Information

Sharing

Related to the issues of communication identified above is the development of trust and, in particular, the issue of information sharing. The presence of “trust” between collaborating parties has been identified as a major discriminator between successful and less successful partnership?,’ and such trust is clearly facilitated by the exchange of, sometimes commercially sensitive, information. The sharing of sensitive information with a partner has already been identified as a danger area in collaboration management. In the traditional model of relatively adversarial and short term automotive relationships, information was likely to have been seen as an indication of power and in such a nontrusting, risk-averse situation it is understandable that suppliers and manufacturers alike might take such an attitude. Yet if truly close and trusting relationships between suppliers and manufacturers are to be developed, information sharing is part of the relationship process; it provides the cement for the structure of the relationship and there is no getting away from the fact that potentially sensitive information is likely to be exchanged between parties. Indeed, some of the key benefits arising from “partner sourcing” stem from sharing information, ideas and suggestions for improvements in processes. These

and Risks for Suppliers

will not occur if trust is not developed to a level whereby the parties are comfortable enough to share key information on, for example, costs, processes and future strategies.38 Some evidence of information exchange was noted in the sample, with, in 71% of cases, Customer A sharing its overall vehicle concept with suppliers and doing so, on average, 24 months before production. There is a danger, however, that information exchange can go too far and, while no evidence of such difficulties was found in this sample, other studiesg~2g have suggested that the issue is one of establishing a balance of limiting the extent of information exchange to that which is absolutely necessary while still achieving an open and trusting relationship.

External Monitoring It has been pointed out by some sources that however well a partnership is managed, there are still many other factors which can affect its outcome.g,30*3g There is the need for both manufacturer and supplier to keep track of technological and other developments occurring outside of the relationship in question. In this way, the danger of complacency in performance (the risk that the partnership becomes “too cosy”‘), can be avoided. For the manufacturer this is a particularly pertinent issue. There will clearly only be a significant competitive advantage in working closely with a supplier if they are operating close to the forefront of technology, especially if the supplier contributes a major component of the automotive product. Indeed, Helper” points to an increasing trend among Japanese manufacturers towards ending previously stable supplier relationships in order to take advantage of new technologies developed by other suppliers. It might equally be argued, though, that technological development is something that suppliers and manufacturers should do together and that the threat, real or implied, that a manufacturer will switch to another supplier if they are offering advanced technology, can only damage an otherwise productive relationship. The challenge to suppliers and manufacturers alike is to keep abreast of technological developments but to do so within the relatively secure environment of the partnership itself; to work together to foster innovation and remain in the forefront of industry practice. If this is to happen, the onus for keeping abreast of technological development is not be placed solely on the manufacturer but there is a responsibility among suppliers too to be aware of developments among their competitors. Yet a significant proportion of U.K. components suppliers admitted to being unaware of whether or not they These findings are parfaced any competition. ticularly worrying, given the apparently increasing trend towards global supplier sourcing among manufacturers. A number of researchers have identified a

shifting of orders among major manufacturers worldwide from domestic to overseas suppliers, particularly those in the newly industrialised countries which enjoy a large comparative advantage.40.41 If suppliers are not even aware of the existence of competitors at a global level, the chances of keeping abreast of technological development are slim.

Conclusions Recent research, promoting supplier partnering as a strategy for competitive advantage, has ensured that supplier-manufacturer relationships in the automotive industry are in the spotlight. Such close supplier relationships had, until recently, been seen as the territory of the Japanese but, as this study has shown, many U.K. automotive suppliers are now developing long-standing partnering relationships with manufacturers, with high levels of information exchange and where the supplier takes an active role in the design and product development process. A well managed supplier partnership can clearly be highly beneficial to both parties in terms of potential time and cost savings and in acting as a forum for generating ideas on product and process improvements. However, partnering as a strategy is not without its dangers and these have been well documented in collaboration literature. Good management practice has a major part to play in increasing the chances of a successful relationship and, to this end, four issues in particular were briefly examined in this article, each of which needs to be placed on the respective agenda of automotive manufacturers and suppliers as they enter into the process of change. These four issues were partner selection; communication: information sharing; and external monitoring. The four points identified above are of course by no means an all-encompassing list of the issues suppliers and manufacturers need to address if they are to develop effective partnering strategies. To cater for the range of circumstances and situations faced by manufacturers and suppliers would be difficult to say the least. Yet the type of supplier partnering relationships that an increasing number of U.K. suppliers appear to be engaged in do present risks. These are not always acknowledged in management literature which often tends, quite understandably, to focus on success stories and not failures. However, such risks can be lessened by good partnership management, which takes account of the factors influencing the process of collaboration. This research programme was initiated by Dr Jeffrey K. Liker of the Department of Industrial and Operations Engineering at the University of Michigan. It was supported by the University of Michigan’s Japan Technology Management Programme, which is funded by the Air Force Office of Scientific Research. Long Range

Planning

Vol.

31

February

1998

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Partnerships

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Long Range Planning Vol. 31

February 1998