Out

CORRELATIONAL STUDY OF ORGANIZATIONAL FACTORS THAT
INFLUENCE SUPPLIER DEVELOPMENT: A BUYER FIRM’S PERSPECTIVE
By
John Charles Novak
A Dissertation Presented in Partial Fulfillment
of the Requirements for the Degree
Doctor of Management in Organizational Leadership
UNIVERSITY OF PHOENIX
August 2008
3337535
Copyright 2008 by
Novak, John Charles
All rights reserved
3337535
2008
© August, 2008 by John C. Novak
ALL RIGHTS RESERVED

ABSTRACT
Despite a thorough and deliberate supplier selection process, suppliers are not performing
adequately to organizations expectations. The purpose of this quantitative research study
was to analyze the relationship between the independent variables of (a) information
exchange, (b) understanding of goals, (c) supplier participation, (d) supplier leadership
attitude, (e) coordinator presence, and (f) supplier dependence on buying firm and the
dependent variable of supplier development results in quality, delivery, cost, and
technology advancement. Forty-two supply chain professionals were survey with 29
responding with survey data related; 43 in quality, 35 in cost, 27 in delivery, and 18 in
technology. The study indicates the importance of information exchange, multifunctional
participation, suppliers’ leadership attitude, and supplier development engineers’
presence at the supplier location to achieve acceptable results. Perhaps the most
significant finding is that buying firms cannot focus on only one factor to drive
improvements. The factors were generally shown to have medium to low positive
correlation with the results achieved from the supplier development projects. Collectively
the factors were shown to be significant in relationship to the supplier development
results. Thus, supply chain professionals who have a process that focuses on these factors
may produce desired results from supplier development projects.

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ACKNOWLEDGMENTS
When I first started the doctoral program, I had no idea how much it would
challenge me to grow as well as the level of dedication and support it would take to
finish. The support received was instrumental for me to successfully complete the
doctoral program. I would like to acknowledge and thank the leadership of the firm from
which the research was conducted for their contribution to the advancement of supply
chain leadership. I would like to thank a few individuals that supported me.
First, I would like to thank my wife, Kim for supporting me through this process
and more. There were times that I needed your support and I always knew I could count
on you. I truly could not have done this without the love and understanding you have
always provided. Without the support of my family it would not have been possible to
focus on such a challenge.
Second, I would like to thank the many participants that provided information for
the research. Taking the time to fill out a survey is a gift that the researcher cherishes.
Research could not be conducted without participants. I personally want to thank you for
your contribution to the advancement of supply chain management. I will forever be
indebted for you contribution. I would also like to thank Dr. April Collett for providing
mentorship throughout the process. In addition, the professional advice from leaders in
the supply chain research such as Dr. Robert Handfield and Dr. Robert Kemp was
invaluable to define the project and evaluate the survey instrument.
Finally, thanks to others such as Dr. Margaret Latonio and Dr. Frederick
Lawrence, for the continuous support and guidance provided. I truly am humbled by the
support from all of you and only hope I can help others. Thanks!
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TABLE OF CONTENTS
LIST OF TABLES................................................................................................ x
LIST OF FIGURES ............................................................................................xii
CHAPTER 1: INTRODUCTION ......................................................................... 1
Background of the Problem .................................................................................. 2
Statement of the Problem...................................................................................... 5
Purpose of the Study ............................................................................................. 6
Significance of the Problem.................................................................................. 7
Nature of the Study ............................................................................................... 8
Research Questions............................................................................................. 10
Hypotheses.......................................................................................................... 12
Theoretical Framework....................................................................................... 19
Independent and Dependent Variables ............................................................... 23
Definition of Terms............................................................................................. 24
Assumptions........................................................................................................ 27
Limitations .......................................................................................................... 29
Delimitations....................................................................................................... 30
Summary ............................................................................................................. 30
CHAPTER 2: REVIEW OF THE LITERATURE ............................................. 33
Literature Review................................................................................................ 33
Rationale for Supplier Development .................................................................. 34
Supplier Development ................................................................................. 35
Supplier Development Steps........................................................................ 36

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Research in Supplier Development..................................................................... 42
Supply Chain Management................................................................................. 50
Research Variables.............................................................................................. 52
Information Exchange ................................................................................. 52
Understanding of Goals ............................................................................... 54
Level of Supplier Participation.................................................................... 56
Coordinator’s Presence................................................................................ 58
Supplier Leadership Attitude....................................................................... 59
Dependency on Buying Firm....................................................................... 60
Conclusion .......................................................................................................... 61
Summary ............................................................................................................. 62
CHAPTER 3: METHOD .................................................................................... 66
Research Design.................................................................................................. 66
Appropriateness of Method ......................................................................... 67
Appropriateness of Design .......................................................................... 68
Research Questions and Hypotheses .................................................................. 69
Population and Sampling Frame......................................................................... 72
Informed Consent, Confidentiality, and Data Collection ................................... 74
Geographic Location........................................................................................... 75
Data Analysis ...................................................................................................... 76
Validity, Reliability, and Instrumentation .......................................................... 81
Pilot Study and the Validity and Reliability of Survey Instrument .................... 88
Summary ............................................................................................................. 90
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CHAPTER 4: RESULTS.................................................................................... 92
Population, Sample Selection, and Demographics ............................................. 94
Data Collection ................................................................................................... 97
Summary of Results Achieved From Supplier Development Projects............... 99
Measurement of Data........................................................................................ 101
Research Questions and Hypotheses ................................................................ 102
Data Analysis of Each Study Variable.............................................................. 105
Testing of Research Questions and Hypotheses ............................................... 108
Quality ....................................................................................................... 109
Delivery ..................................................................................................... 120
Cost ............................................................................................................ 130
Technology ................................................................................................ 141
Summary ........................................................................................................... 151
CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS.................... 153
Overview of the Research................................................................................. 153
Correlation of Supplier Development Results With the Level of Information
Exchange.................................................................................................... 156
Correlation of Supplier Development Results With the Level of Suppliers’
Understanding of Goals ............................................................................. 157
Correlation of Supplier Development Results With the Level of Participation
of the Supplier Organization...................................................................... 159
Correlation of Supplier Development Results With the Level Suppliers’
Leadership Attitude ................................................................................... 160

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Correlation of Supplier Development Results With the Level of Assignment
of Supplier Development Coordinator....................................................... 162
Correlation of Supplier Development Results With the Level of Suppliers’
Dependence on Buying Firm ..................................................................... 164
Correlation of Supplier Development Results With the Level of the
Collective Variables Identified in Hypotheses 1-6.................................... 165
Implications of the Study for Theory and Practice ........................................... 168
Recommendations for Organizations................................................................ 171
Limitations of the Research .............................................................................. 172
Future Research Opportunities ......................................................................... 173
Concluding Comments...................................................................................... 176
REFERENCES ................................................................................................. 177
APPENDIX A: PERMISSION TO USE PREMISES, NAME, AND/OR
SUBJECT OF FACILITY, ORGANIZATION, UNIVERSITY INSTITUTION
OR ASSOCIATION ......................................................................................... 188
APPENDIX B: INFORMED CONSENT, PARTICIPATION 18 YEARS OF
AGE AND OLDER .......................................................................................... 190
APPENDIX C: PRE-NOTIFICATION SURVEY LETTER .......................... 191
APPENDIX D: INFORMED CONSENT, PARTICIPANT 18 YEARS OF AGE AND
OLDER (SURVEY)…………………………………………………………...192
APPENDIX E: SUPPLIER DEVELOPMENT SURVEY ............................... 193
APPENDIX F: ANOVA TABLE (QUALITY)................................................ 197
APPENDIX G: t-TEST TABLE....................................................................... 197

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APPENDIX H: ANOVA TABLE (DELIVERY)............................................. 200
APPENDIX I: ANOVA TABLE (COST) ........................................................ 202
APPENDIX J: ANOVA TABLE (TECHNOLOGY)....................................... 204

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LIST OF TABLES
Table 1 Summary of the Qualitative Research on Supplier Development.........................48
Table 2 Summary of the Quantitative Research on Supplier Development.......................49
Table 3 Independent Variables With Data Level and Scale ..............................................78
Table 4 Dependent Variables With Data Level and Scale.................................................79
Table 5 Modified Table to Show the Triola, p Value, and Interpretation .........................80
Table 6 Scale Related to Level of Information Exchange..................................................84
Table 7 Scale Related to Level of Understanding of Goals ...............................................85
Table 8 Scale Related to Level of Understanding of Suppliers Leadership
Attitude.........................................................................................................................86
Table 9 Independent Variables with Data Level, Scale, and Number of Questions........106
Table 10 Correlation Coefficients Matrix for Supplier Development Projects
Focused on Quality ....................................................................................................110
Table 11 Table of Variables, Direction of Correlation, and Strength of
Relationship With Quality-Focused Supplier Development Projects........................115
Focused on Delivery ..................................................................................................120
Relationship with Delivery Focused Supplier Development Projects .......................125
Focused on Cost.........................................................................................................131
Relationship With Cost Focused Supplier Development Projects.............................136

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Focused on Technology .............................................................................................141
Relationship With Technology-Focused Supplier Development Projects .................146
Table 18 Summary Table Showing the Correlation Results of Direction for
Strength and Direction in Relation to the Studied Independent Variables................151
Table 19 Summary Table Showing Research Questions..................................................155
Table 20 Summary Table of Hypothesis H1 ....................................................................157

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LIST OF FIGURES
Figure 1. Model of factors influencing supplier development results...............................24
Figure 2. Supplier quality and development business priority. .........................................38
Figure 3. Supplier development research model of independent and dependent
variables. ......................................................................................................................68
Figure 4. Number of surveys versus suppliers annual sales in the research data..............95
Figure 5. Number of projects per purchase part area. .......................................................96
Figure 6. Number of surveys submitted per supplier development engineer....................98
Figure 7. Results of supplier development project focused on delivery. ..........................99
Figure 8. First-time-quality improvement from supplier development projects. ............100
Figure 9. Supplier development projects focused on technology....................................100
Figure 10. Cost improvement results from supplier development projects.....................101
Figure 11. Hypotheses of positive correlation of independent to dependent
variables. ....................................................................................................................109
Figure 12. Level of supplier information exchange versus quality improvement...........111
Figure 13. Level of supplier understanding of goals versus quality improvement. ........111
Figure 14. Level of supplier participation versus quality improvement. ........................112
Figure 15. Level of supplier leadership’s attitude versus quality improvement. ............112
Figure 16. Level of supplier development coordinator’s presence versus quality
improvement. .............................................................................................................113
Figure 17. Level of supplier dependence on buying firm versus quality
improvement. .............................................................................................................113
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Figure 18. Level of supplier information exchange versus delivery
improvement. .............................................................................................................121
Figure 19. Level of supplier understanding of goals versus delivery
improvement. .............................................................................................................122
Figure 20. Level of participation versus delivery improvement. ....................................122
Figure 21. Level of supplier leadership’s attitude versus delivery improvement. ..........123
Figure 22. Level of supplier development coordinator’s presence versus delivery
improvement. .............................................................................................................123
Figure 23. Level of supplier dependence on buying firm versus delivery
improvement. .............................................................................................................124
Figure 24. Level of supplier information exchange versus percentage cost
improvement. .............................................................................................................132
Figure 25. Level of supplier understanding of goals versus percentage cost
improvement. .............................................................................................................132
Figure 26. Level of participation versus percentage cost improvement..........................133
Figure 27. Level of supplier leadership attitude versus percentage cost
improvement. .............................................................................................................133
Figure 28. Level of supplier development coordinator’s presence versus
percentage cost improvement. ...................................................................................134
Figure 29. Level of supplier dependence on buying firm versus cost percentage
improvement. .............................................................................................................134
Figure 30. Level of supplier information exchange versus technology success. ............142
Figure 31. Level of supplier understanding of goals versus technology success............143

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Figure 32. Level of participation versus technology success. .........................................143
Figure 33. Level of supplier’s leadership’s attitude versus technology success. ............144
Figure 34. Level of supplier development coordinator’s presence versus
technology success.....................................................................................................144
Figure 35. Level of supplier dependence on buying firm and technology
improvement success. ................................................................................................145

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CHAPTER 1: INTRODUCTION
Since the 1980s, many firms have experienced a transformation in the role of the
purchasing function from a business that executes transactions to one that leads supplier
selection and manages the supplier network (Krause, 1995). The advancement and
increasing importance of the purchasing role is attributed to the widely recognized
contribution of supply professionals to the competitiveness of the buying firm (Burt,
Dobler, & Starling, 2003; Ogden, Peterson, Carter, & Monczka, 2005). “The relationship
between the corporation and its suppliers is very important and can be regarded as an
intangible and agile asset of the corporation” (Lee & Yang, 2000, p. 787). This research
advanced the body of knowledge in supply chain management by analyzing
organizational factors that may influence the success of supplier development programs.
Numerous qualitative and quantitative research studies have supported the role of supply
chain leadership in supplier development success.
Lack of trust between a supplier and customer can often result in ineffective
performance (Chu & Fang, 2006). Kwon and Suh (2004) noted a lack of trust may result
in higher transactional costs due to increased examination and verification of contractual
activities. Kwon and Suh posited that value-added activities such as supplier development
approaches have become difficult to execute.
For the purpose of the current research, “supplier development was defined as the
transfer of resources for the purpose of improving the suppliers’ performance and
capabilities” (Easton, 2000, p. 2). Based on this definition, supplier development includes
any activity or resource the buying firm deploys to improve the performance of suppliers,
including minimal activities such as communication through supplier scorecards and

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other supplier feedback processes to more moderate activities such as on-site
assessments, providing training, and short-term workshops or kaizen activities
(improvement workshops) and then advancing to more extensive activities such as joint
development activities, long-term projects, and employee exchanges focused on
knowledge transfer (Burt et al., 2003). The current research involved an examination of
the relationship between factors related to supplier development and the results of the
activity from the buying firm’s perspective. “With suppliers making a significant
contribution to a company’s competitive position, it would be a fatal mistake if
companies were to neglect the potential of supplier development practices” (Wagner,
2006, p. 566).
Chapter 1 introduces the problem of a lack of understanding of the variables that
contribute to successful supplier development efforts and the need to analyze factors in
relation to supplier development results. Specifically the chapter includes the background
of the problem, statement of the problem, purpose of the study, significance of the
problem, nature of the study, research questions, hypotheses, theoretical framework,
independent and dependent variables, definition of terms, and assumptions, limitations,
and delimitations. Chapter 1 concludes with a discussion of the pertinent aspects of the
research study.
Background of the Problem
With the turbulent times that extensive global competition brings, as well as the
escalation of commodity costs such as steel, resin, crude oil, and precious metals, many
firms have transformed their traditional purchasing organizations with a focus on price to
purchasing organizations with a focus on supply management to create a competitive

3
advantage (Burt et al., 2003; Krause, 1995; Monczka, Trent, & Handfield, 2002). In
1939, Toyota management adopted a supplier development philosophy that viewed
suppliers as part of the Toyota family (Sako, 2004), which indicated a long history of
focus on supplier development by the Toyota organization.
In the 1950s, management in Japan adopted an approach that viewed the
manufacturing process as a system with a focus on quality, including the evaluation of
purchased materials to improve an organization’s ability to provide jobs (Deming, 1982).
Toyota demonstrated commitment to supplier development by opening lectures,
seminars, and training courses to core supplier employees (Sako, 2004). Deming posited
that buying and supplier organizations should work together to reduce the level of defects
seen by the purchaser through cooperative methods. At Toyota, Nissan, and Honda,
supplier development has been taken for granted for several decades, with only recent
emphasis by manufacturers in the United States (Burt et al., 2003; Sako). Following
Toyota, Nissan, and Honda’s lead, many organizations have seen a transformation of the
role of purchasing from simply issuing purchase orders to managing and developing
world-class suppliers (Burt et al., 2003).
The transformation requires a paradigm shift in thinking from one that is purely
transactional to a relationship where the buying firms’ leadership and selling firms’
leadership have a sincere desire to enhance each other’s interest (Burt et al., 2003).
Movement to transformational approach has led to fewer suppliers in the supply chain
characterized by longer term relationships (Burt et al., 2003; Krause, 1995; Monczka et
al., 2002). “The evolution of the purchasing function’s importance within the
organization and the evolution of the buyer-supplier relationship have occurred, in part,
4
because buying firms increasingly recognize the potential contribution of their suppliers’
performance to their own competitive position” (Krause, p. 1). Activities range from
nominal support to full-time staffs leading the supplier development activities (Krause).
If organizations are to effectively use resources devoted to supplier development
activities, an understanding of the factors associated with successful supplier
development results may be of importance.
Research on factors that influence successful supplier development results may be
of importance to buying firms’ leadership of supply management. Heide and George
(1990) noted supplier development programs were more prevalent than expected at the
time and also identified the element of formal supplier evaluation as the key to success.
Krause (1995) identified antecedent variables to successful supplier development
processes, which included support of top leadership, cross-functional involvement, and
effective communication. Research by Krause and Ellram (1997) indicated satisfactory
supplier development results correlated with firms with a philosophy of expecting
improved supplier performance and the willingness to devote resources to the effort.
Handfield, Krause, Scannell, and Monczka (2000) noted firms can avoid the pitfalls of
poor supplier development results by conducting meetings with the buyers and supplier
teams, defining key projects, and monitoring project results. In an empirical study on one
large company with an established supplier development program, Easton (2000)
revealed that significant factors such as the suppliers’ positive attitude, suppliers’
appointment of a coordinator for the supplier development effort, and a high level of
supplier dependence on the customer contributed to successful supplier development
approaches.
5
Monczka et al. (2002) described how the supply chain encompasses all actions
connected with the stream and transformation of products or services from the raw
material stage (extract from Mother Earth) through to the end-buyer. The chain may be
referred to as dirt to customer, referring to the extracting phase of taking product from the
earth and then processing it until it is in its intended form for the final customer.
Statement of the Problem
Despite a thorough and deliberate supplier selection process, many suppliers are
not performing adequately in the areas of quality, delivery, cost reductions, and
technology advancements (Burt et al., 2003; Easton, 2000; Krause, 1995). Doolen,
Traxler, and McBride (2006) noted, “Although having good supplier performance is
important, surveys show that U.S. manufacturing companies continue to struggle with
supplier management” (p. 26). Poor supplier performance could result in unnecessary
design changes, increased cost, time delays in delivery, and poor quality (Lo & Yeung,
2006). Effective supply chain leadership is important to the organization and society
because it may lead to lower total cost, improved quality and delivery performance, and
advancements in technology (Fugate, Sahin, & Mentzer, 2006).
When faced with a poorly performing supplier, firms may choose to resource the
product or service to an alternative supplier, develop the manufacturing capabilities
internally, or assist the supplier to develop the capabilities to perform at an acceptable
level (Burt et al., 2003). The premise of the current research was that the buying firm has
chosen to assist the supplier to improve the capabilities to perform at an acceptable level,
known as supplier development. Previous research in supplier development primarily
focused on case study analysis with limited empirical focus (Sanchez-Rodriguez,

6
Hemsworth, & Martinez-Lorente, 2005). A lack of understanding of the variables that
contribute to successful supplier development efforts may impede the firms’ ability to use
invested resources effectively to meet customer requirements. Research in the area of
supplier development may provide supply chain professionals the knowledge to improve
results.
When buying firms engage in supplier development activities, improvements may
occur with suppliers in areas such as quality, delivery, cost, lead time/cycle time, and
technology resulting in improved value propositions for the buying firm (Burt et al.,
2003). This multiple linear regression research study expands the body of knowledge in
supply chain management by testing factors that may be associated with successful
supplier development results. The data collected in the study may provide supply chain
professionals insight into the independent variables and the relationship they may have
with supplier development results. “Purchasing can and should take a lead role in supplier
development to ensure that the links between supply chain members are productive and
rewarding” (Easton, 2000, p. 2).
Purpose of the Study
The purpose of the current quantitative research study was to analyze the
relationship between the independent variables of (a) information exchange, (b)
understanding of goals, (c) supplier participation, (d) supplier leadership attitude, (e)
coordinator presence, and (f) supplier dependence on buying firm and the dependent
variable of supplier development results in quality, delivery, cost, and technology
advancement. A supplier development engineer is an individual assigned to execute a
project with a supplier to advance performance in the areas of quality, delivery, cost, and
7
technology (Burt et al., 2003). The research involved supplier development engineers and
supply chain professionals who have completed supplier development projects from one
large automotive component firm. The leadership of the organization participating in the
research provided permission (see Appendix A). Participants in the research led supplier
development activities with the large automotive component firm. Supplier development
engineers who lacked experience as defined by their supervisor and were acting in an
apprentice role were not included in the research. The supplier development engineers
answered the survey with a specific supplier development project in mind. Engineers
could have answered more than one survey based on leading multiple projects with
multiple suppliers. Research participants were asked to reflect on their development
activities with the supplier firms that have participated in the supplier development
activity between January 2005 and February 2008.
Significance of the Problem
The significance of the impact of leadership on supplier development lies in the
knowledge of which factors may be related to achieving successful supplier development
results. The multiple linear regression study involved an examination of the variables to
determine if there was a relationship with supplier development results. The significance
of supplier development is well documented in literature (Sanchez-Rodriguez et al.,
2005).
One of the purchasing function’s basic objectives is to maintain a network of
capable suppliers. Yet, many view their supplier’s performance as lacking in the
critical areas of quality and cost improvement, delivery performance, new
technology adoption, and financial health. (Krause & Ellram, 1997, para. 2)
8
By understanding the factors that may contribute to successful supplier development
results, a significant contribution was made to supply chain management and
organizations seeking to establish or strengthen supplier development processes. The
results may provide the buying firms with the ability to identify best practices that if
applied can assist organizations in creating a competitive advantage. Improving
supplier’s performance creates an advantage, resulting in the buying firms’ ability to
improve customer value propositions.
Narasimhan, Talluri, and Mendez (2001) noted, “Effective allocation of resources
for supplier development programs is often a difficult decision faced by managers” (para.
38). By understanding the relationship of factors that may contribute to successful
supplier development programs, purchasing leadership can develop and deploy processes
that achieve intended results. Understanding supplier development is important to society
because improving supplier performance may result in an organization advancing the
ability to provide services and products that are superior in quality, delivery, cost, and
technology. The result of the study expands the body of knowledge on supply chain
management and augments past research by analyzing variables from the perspective of a
buying firm.
Nature of the Study
A quantitative approach using a survey instrument with ratio phrase completion
and ratio type scales was used to conduct the research. A multiple linear regression
analysis study was selected as the preferred method. The quantitative approach was
selected after examining qualitative and quantitative research that identified variables that
may be associated with successful supplier development results (Dunn & Young, 2004;
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Krause & Ellram, 1997; Krause & Scannell, 2002; Sanchez-Rodriguez et al., 2005; Sako,
2004). A correlation study was appropriate, as the intent for the research was to test the
association or relationship between the independent variables and the dependent
variables. Creswell (2003) noted, “Correlational research seeks the association or
relationship between two variables or sets of scores and develops this understanding by
exploring the form, direction, and magnitude of the association” (p. 366). Ratio and
phrase completion scales were used in the research for the variables. Multiple linear
regression analysis was utilized to determine the form, direction, and magnitude of
association of the factors being studied in relation to supplier development results.
The survey collected information from supplier development engineers who had
executed supplier development projects between January 2005 and February 2008. The
research was divided into four groups based on the focused results (dependent variable)
of the supplier development activity: (a) quality, (b) delivery, (c) cost, and (d)
technology. The independent variables were analyzed utilizing multiple regression
analysis independently and then collectively with the dependent variable in each of the
four groups: (a) quality, (b) delivery, (c) cost, and (d) technology. In essence, four
research activities were pursued. The research results indicate differences between the
four focused activities that are discussed in chapter 4. The entire population of supplier
development engineers was targeted with activities led by supplier development
engineers executed between January 2005 and February 2008 with a focus on quality,
cost, delivery, and technology.
The survey was administered electronically to the supplier development engineer
and supply chain professional. The survey was used to collect data on the independent
10
and dependent variables. The descriptive data were populated by the supplier
development engineers utilizing data collected from past completed projects. Descriptive
data included (a) focus of supplier development project, (b) category of buy from the
supplier, (c) annual supplier sales, (d) region of supplier manufacturing location, and (e)
supplier development completion date.
Correlation and multiple linear regression analysis were applied to the data to
determine whether or not correlations existed with the individual factors and then
collectively. The independent variables included values related to (a) information
exchange, (b) understanding of goals, (c) supplier participation, (d) supplier leadership
attitude, (e) buyer firm’s coordinator presence, and (f) supplier dependence on buying
firm, with the dependent variables including the results achieved through the supplier
development activity in the areas of quality, delivery, cost and technology development.
The supplier development engineers were instructed that if the values for the annual sales
and percentage dependent on the buying firm were not known, the information could be
left blank on the survey instrument. Data mining techniques were utilized to identify
these values to complete the survey. Each independent variable was studied individually
and then collectively with each dependent variable. Correlation and multiple linear
regression analysis method was used to analyze the relationship between independent
variables (a-f) with the dependent variable data. If a relationship did exist, the form,
direction, and magnitude of the association with the independent variables were analyzed.
Research Questions
One primary question drove the research: Does a relationship exist between the
independent variables of (a) information exchange, (b) understanding of goals, (c)

11
supplier participation, (d) supplier leadership attitude, (e) coordinator presence, and (f)
supplier dependence on buying firm with the dependent variables of supplier
development results in quality, delivery, cost, and technology advancement? The
following research questions were investigated through the research:
Research Question 1: What relationship does the suppliers’ level of information
exchange have with the outcome achieved from a supplier development activity?
Research Question 2: What relationship does the suppliers’ level of understanding
of the goals have with the outcome achieved from a supplier development activity?
Research Question 3: What relationship does the suppliers’ level of participation
have with the outcome achieved from a supplier development activity?
Research Question 4: What relationship does the suppliers’ leadership attitude
Research Question 5: What relationship does the buying firm’s level of presence
of a coordinator have with the outcome achieved from a supplier development activity?
Research Question 6: What relationship does the suppliers’ level of dependence
based on percentage of the suppliers’ sales revenue to the buying firm have with the
outcome achieved from a supplier development activity?
Research Question 7: What relationship do the level of (a) information exchange,
(b) understanding of goals, (c) participation, (d) leadership attitude, (e) buying firm’s
coordinator presence, and (f) supplier dependence on buying firm collectively have with
the outcome achieved from the supplier development activity?
The data were analyzed utilizing correlation and multiple regression analysis to
determine if variables individually and collectively correlate to the dependent variable.

12
The research questions were applied in four groups based on the focus of the supplier
development activity or project dependent variables related to (a) quality, (b) delivery, (c)
cost, and (d) technology. The research provides insight into the following question: Is
there a significant relationship between factors related to the supplier development
process of (a) information exchange, (b) understanding of goals, (c) supplier
participation, (d) supplier leadership attitude, (e) coordinator presence, and (f) supplier
dependence on buying firm with the dependent variables (supplier development outcome
in the areas of quality, delivery, cost, and technology)?
Hypotheses
Supplier development represents a proactive approach to improving a supplier’s
performance (Burt et al., 2003; Dunn & Young, 2004; Easton, 2000; Hahn, Watts, &
Kim, 1990; Krause & Ellram, 1997; Sanchez-Rodriguez et al., 2005). Research indicated
that firms with a supplier development focus may expect to see improvements in
suppliers’ performance in quality, delivery, cost, and technology (Burt et al., 2003).
Based on a review of previous research, the following hypotheses and null hypotheses are
offered.
H10: There is no relationship between the suppliers’ levels of information
exchange and the supplier development outcome in the areas of quality, delivery, cost,
and technology.
H1a: Higher levels of supplying firm information exchange will result in higher
levels of supplier development outcome related to quality, delivery, cost, and technology.
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H20: There is no relationship between the suppliers’ levels of understanding of the
goals and the supplier development outcome in the areas of quality, delivery, cost, and
technology.
H2a: Higher levels of the suppliers’ understanding of the goals will result in
higher levels of supplier development outcome in the areas of quality, delivery, cost, and
technology.
H30: There is no relationship with the suppliers’ level of participation and the
supplier development outcome in the areas of quality, delivery, cost, and technology.
H3a: Higher levels of suppliers’ participation will result in higher levels of
H40: There is no relationship with the level of suppliers’ leadership attitude and
the supplier development outcome in the areas of quality, delivery, cost, and technology.
H4a: Higher levels of the suppliers’ leadership attitude will result in higher levels
of supplier development outcome related to quality, delivery, cost, and technology.
H50: There is no relationship with the level of assignment of a development
coordinator from the buying firm and the supplier development outcome in the areas of
quality, delivery, cost, and technology.
H5a: Higher levels of assignment of a supplier development coordinator by the
buying firm will result in higher levels of supplier development outcome in the areas of
H60: There is no relationship with the suppliers’ level of dependence on the
buying firm (based on sales percentage of revenue sold to buying firm) and the supplier
development outcome in the areas of quality, delivery, cost, and technology.

14
H6a: Higher levels of dependence on the buying firm (based on sales percentage
of revenue sold to buying firm) to the buying firm will result in higher level of supplier
H70: There is no collective relationship with the level of (a) information
exchange, (b) understanding of goals, (c) supplier participation, (d) leadership attitude,
(e) buying firm’s coordinator presence, and (f) suppliers’ dependence on buying firm and
H7a: Higher collective levels of (a) information exchange, (b) understanding of
goals, (c) supplier participation, (d) leadership attitude, (e) buying firm’s coordinator
presence, and (f) suppliers’ dependence on buying firm will result in a higher supplier
The supply management function has changed dramatically between 1975 and
1995 (Burt et al., 2003; Krause, 1995, Monczka et al., 2002). “During the 1980s and
1990s, intense global competition has emphasized the need for the purchasing function to
simultaneously keep cost low, maintain high quality levels, and ensure the on-time
delivery of purchased material, services and assemblies” (Krause, p. 19). Firms are
forging closer relationships with important suppliers and including them in many aspects
of the business process (Burt et al., 2003; Krause; Monczka et al.; Nelson, Moody, &
Stegner, 2005). Krause posited buyer–supplier relationships in the United States are
moving from a traditional transactional relationship to a relationship with more
cooperation and collaboration.
H1a: Higher levels of supplying firm information exchange will result in higher levels of
supplier development outcome related to quality, delivery, cost, and technology.

15
Burton (2000) defined information exchange as the “relaying of business-related
information in a way that enables the recipient to take action” (p. 134). One of the most
important findings of research conducted by Krause (1995) asserted that communication
efforts with suppliers have the potential to affect the level of commitment for supplier
development activities. In a mixed method research study of 89 minority suppliers, the
results of Krause, Ragatz, and Hughley (1999) emphasized the need to effectively
communicate in order to develop minority suppliers.
In a case study analysis of supplier development activities at John Deere, Golden
(1999) emphasized the need to have open communications between the customer and the
supplier on information related to quality, cost, and technology. John Deere created a
trusting relationship with its supplier base, where information related to cost structures,
including profitability, was shared freely. John Deere understood the need for suppliers
to be profitable and the suppliers trusted the relationship. John Deere’s supplier
development activities allowed the personnel the opportunity to assist suppliers in
reducing process steps, resulting in lower cost and higher profitability for both the
suppliers and John Deere (Golden).
Burt et al. (2003) defined a trusting relationship between the supplier and buyer as
“being confident that the other party will do what it says it will do” (p. 87). As a buyer-
supplier relationship progresses from a transactional to a collaborative to an alliance, the
level of trust required typically increases (Burt, Dobler, & Starling, 1996). Monczka et al.
(2002) define collaboration as “the process by which two or more parties adopt a high
level of purposeful cooperation to maintain a trading relationship over time” (p. 135).
Alliance is defined as a special type of collaborative relationship where “confidential

16
information is shared, assets are invested in joint projects, and significant joint
improvements are pursued” (Monczka et al., p. 137).
H2a: Higher levels of the suppliers’ understanding of the goals will result in higher levels
of supplier development outcome in the areas of quality, delivery, cost, and technology
Watts and Hahn’s (1993) empirical analysis reported a need for three key
elements for the successful execution of a supplier development program: (a) establishing
clear goals and objectives, (b) supplier evaluations, (c) developing future supplier
capabilities. A survey of 527 conducted by Krause and Ellram (1997) indicated that
purchasing managers can improve suppliers’ performance by demanding more, clearly
communicating expectations, and actively participating through supplier development
efforts. Through case study analysis, Maltz (1998) showed that performance of an
electrical firm improved significantly by inviting distributors on site, opening a clear
communication path for expectations and making it a clear objective to be involved in
supplier improvement efforts.
Organizations depend on a number of activities to improve suppliers’
performance, such as the use of scorecards, supplier assessments, workshops, training,
direct involvement of personnel at the suppliers’ or customers’ location, and many other
projects (Claunch, 1993, Easton, 2000; Golden, 1999; Handfield et al., 2000, Krause,
1995; Krause & Ellram, 1997; Krause & Scannell, 2002; Watts & Hahn, 1993). Deming
(1982) asserted that long-term relationships such as collaborative relationships are
necessary to achieve the lowest total cost. Monczka et al. (2002) described collaborative
relationships as having characteristics such as (a) long-term relationships between buyers
and suppliers; (b) a win–win attitude to the benefit of the relationship; (c) joint effort to
17
improve, settle conflict, and meet challenges; (d) exchange information; and (e)
commitment to the success of each other in the relationship. Research emphasized the
need to improve the communications activities to ensure suppliers clearly understand
customers’ expectations (Ford, 2003; Forker & Mendez, 2001; Forker, Ruch, &
Hershauer, 1999; Krause, Scannell, & Calantone, 2000; Narasimhan et al., 2001). Dunn
and Young’s (2004) case study revealed that ineffective measurement criteria may be a
key obstruction to supplier development.
H3a: Higher levels of suppliers’ participation will result in higher levels of supplier
development outcome in the areas of quality, delivery, cost, and technology
The results of Easton’s (2000) research revealed that the more time the buying
firm spent at the supplier’s location, the greater the results of the supplier development
activity. Nelson (2004) suggested two key elements: (a) lean supplier development
requires an organization to invest in talent and resources with knowledge in activities to
improve suppliers’ performance and (b) the activity requires a long-term commitment of
the leadership of the organization. Krause and Scannell (2002) noted that product-based
firms tend to be more active in supplier development activities such as site visits,
providing training, and direct investment in the supplier firm.
H4a: Higher levels of the suppliers’ leadership attitude will result in higher levels of
supplier development outcome related to quality, delivery, cost, and technology
The state of commitment of the suppliers’ top leadership at the initiation of the
supplier development activity may have an impact on the level of results achieved.
Research into the factor may provide insight into which pre-requirements may be
necessary to initiate a supplier development process. Hartley and Choi (1996) noted
18
organizations that cooperatively participate in a supplier development activity may
achieve greater results than suppliers coerced into the activity. Easton (2000) conducted
empirical research in which 86 suppliers were analyzed and noted that the more positive
the suppliers’ leadership attitude toward supplier development activities, the more
supplier capability improvement occurred.
H5a: Higher levels of assignment of a supplier development coordinator by the buying
firm will result in higher levels of supplier development outcome in the areas of quality,
delivery, cost, and technology
Handfield et al. (2000) reported that to avoid pitfalls of poor supplier
development results, leaders of buying firms should ensure the supplier development
process includes a priority to achieve supplier leadership commitment to the process.
Handfield et al. noted that supplier top leadership support is a major factor in the success
of supplier development efforts. Easton (2000) noted that to maximize results of supplier
development activities, leaders of purchasing organizations may need to select firms that
support supplier development efforts. Firms willing to appoint a champion to the supplier
development effort may have a greater chance for success (Easton).
H6a: Higher levels of dependence on the buying firm (based on sales percentage of
revenue sold to buying firm) to the buying firm will result in higher level of supplier
development outcome in the areas of quality, delivery, cost, and technology
Easton (2000) noted that to maximize results of supplier development activities, it
is important for buying firms to choose suppliers based on factors such as high-
dependence customers. Because there are limited resources available to any supplier
19
development effort, selecting suppliers that provide the most return on investment may be
key to the supplier development process (Easton).
H7a: Higher collective levels of (a) information exchange, (b) understanding of goals, (c)
supplier participation, (d) leadership attitude, (e) buying firm’s coordinator presence,
and (f) suppliers’ dependence on buying firm will result in a higher supplier development
outcome in the areas of quality, delivery, cost, and technology.
Easton (2000) determined there was no relationship between level of information
exchange, level of understanding of goals, and level of supplier participation with
supplier development capabilities. Easton reported a positive relationship with the level
of suppliers’ leadership attitude, level of coordinator presence, and level of suppliers’
dependence on the buying firm with supplier development capabilities. The research,
however, did not separate the findings into the dependent categories of quality, delivery,
cost, and technology. The research project analyzed the data in the four areas to
determine if a relationship exists.
Theoretical Framework
As manufacturing and service organizations outsource work to suppliers to focus
on core competencies, suppliers are expected to deliver innovative products that meet
customers’ expectations (Burt et al., 2003; Krause, 1995). “When a supplier is incapable
of meeting these needs, a buyer has three alternatives: (1) bring the outsourced item in-
house and produce it internally, (2) resource with a more capable supplier, or (3) help
improve the existing supplier’s capabilities” (Handfield et al., 2000, p. 37). The scope of
the research was the supplier development process and improving an existing supplier’s
performance. The research involved an examination of variables in relation to supplier

20
development results. The theoretical framework for the study was supply-chain
leadership, leadership and development, and general organizational and leadership
theories.
Supply chain leadership includes activities that link suppliers and customers
downstream and upstream, where supplier’s link to customers that become suppliers for
other customers until the final product is produced for the final end user (Burt et al.,
2003). Supply chain leadership activities include supplier selection, systems
management, operations, purchasing, material inventory turn management, material
scheduling, order processing, transportation, cash disbursement, and customer service
(Burt et al., 2003). The research included the use of the following definition offered by
Monczka et al. (2002):
Supply chain management is the integration of these activities [supplier selection,
systems management, operations, purchasing, material inventory turn
management, material scheduling, order processing, transportation, cash
disbursement, and customer service] through improved supply chain relationships
to achieve a sustainable competitive advantage. (p. 5)
Advantages that are achievable through proper supply chain management include quality
improvement, cost savings improvements, reduced product or service cycle time,
improved product or service delivery, and improved technology (Monczka et al., 2002).
The term supply chain management became an accepted catchphrase with consultants in
the 1980s and throughout the 1990s and was analyzed by the scholarly community (Burt
et al., 2003).
21
A transition occurred by the late 1980s, when purchased material increased to 50
to 60% of the cost of sales in the United States (Burt et al., 2003; Nelson, Moody, &
Stegner, 2001). Due to the high impact of purchased material, the importance of the
purchasing and material function was propelled within the leadership of organizations
(Nelson et al., 2001). Nelson et al. reported the shift within organizations would continue
to occur, resulting in the continued alignment of supply chain management performance
measures with organizational performance measures. Supplier quality will be evaluated
similar to customer performance indicators, delivery performance will parallel customers’
expectations, and language for product development, timing, and information systems
will be present throughout the supply chain (Nelson et al., 2001). Nelson et al. (2001)
noted that continued research on supplier development may have a profound impact on
the leadership of the buying firms’ ability to establish effective supplier development
programs to achieve business objectives.
Leadership can be discussed in terms of two theories: transactional and
transformational. Transactional leadership addresses an exchange of equal-value items;
transactional leadership focuses on the contingent rewards and manages by exception
(Bass, 1990). A transformational leadership model focuses on developing the employee
and the supplier. The transformational leadership model allows the leader to move the
organization from what it is to what the leader wants it to be.
Transformational leadership refers to the leader moving the follower beyond
immediate self-interest through idealized influence (charisma), inspiration,
intellectual stimulation, or individualized consideration. It elevates the follower’s
level of maturity and ideals as well as concerns for achievement, self-

22
actualization, and the well-being of others, the organization, and society. (Bass,
1999, p. 11)
Leadership is expected to maximize the effectiveness of supplier development
implementation (Easton, 2000; Krause, 1995, Sanchez-Rodriguez et al., 2005). The study
evaluates factors in supply leadership that may contribute or hinder the effectiveness of
supplier development programs.
There are four phases in the supplier development process: planning, doing,
checking, and acting (Burt et al., 2003). In the planning phase, the organization prioritizes
and selects the projects that may provide the highest yield related to quality delivery,
cost, and technology. Due to resource constraints, organizations cannot support all
desired supplier development problems (Burt et al., 2003). At the planning phase, an
organization makes a decision as to whether or not the supplier development project is
initiated (Krause, 1995). In some cases, the project is hard-pressed by the customer due to
the supplier firm’s poor quality or delivery performance (Burt et al., 2003). The planning
phase includes a discussion on the overall goals of the supplier development activity with
the supplier to ensure there is full agreement (Krause).
Phase 2 is the do phase and includes activities such as training, current state
analysis, supplier introduction, process selection, data collection, goal setting, planning,
and implementation (Burt et al., 2003). Phase 3, the check phase, involves reviewing the
results of the supplier development activity. Results are collected for a period of time and
compared to the baseline data initially collected. Results are also compared to the
objectives established for the supplier development activity. Improvements are
institutionalized to ensure the elevated performance is maintained. The final phase is the
23
act phase and includes the dissemination of the improved method to other parts of the
organization (Burt et al., 2003).
Independent and Dependent Variables
Figure 1 represents the test model for the research with the independent variable
represented in oval shapes and the dependent variable in circles. The research involved an
analysis of the relationship of the independent variables to the dependent variables. The
independent variables include values related to (a) information exchange, (b)
buyer firm’s coordinator presence, and (f) supplier dependence on buying firm and the
dependent variables include the results achieved through the supplier development
activity in the areas of quality, delivery, cost, and technology development. The rectangle
represents variables that were controlled with this research. The research involved a
single large automotive supplier where the magnitude of variation is reduced due to
greater consistency in the business and organizational environment, processes,
procedures, and policies as opposed to utilizing several firms with greater variation.
Business environmental factors such as competition, market conditions, and quality
expectations are also controlled. The research model is reviewed in greater detail in
chapter 3.
24
Independent Variables
Supplier Organization
1. level information exchange
2. level of understanding of goals Dependent Variables
3. level of participation Supplier
4. level of suppliers’ leadership Analyze for Development
attitude relationship Results: quality,
5. level of coordinators presence delivery, cost, and/or
6. level of suppliers dependence technology
on the customer firm
7. collective relationship of the six
(1-6) independent variables
Controlled Variables
Buying Organization
• Business Environment
• Organizational Environment
• Buying Firms Processes, Procedures, and Policies
Figure 1. Model of factors influencing supplier development results.
Definition of Terms
The following definitions offer a more detailed understanding of terminology
used in the research. The definitions serve as a method to ensure proper representation of
data and facts. The section provides a link between the terms used in the research.
Buying firm: A buying firm is the organization that purchases a service or product
from a supplier (Cai, Jun, & Yang, 2006).
Collaborative relationship: Monczka et al. (2002) defined collaboration as “the
process by which two or more parties adopt a high level of purposeful cooperation to
maintain a trading relationship over time” (p. 135).

25
First-time quality percentage: Also referred to as first-time yield, first-time quality
is the process yield without scrap and rework (Vermani, 2003). To obtain the percentage,
the value is divided by the total parts produced.
Just-in-time (JIT): “JIT is a set of principles, tools, and techniques that allows a
company to produce and deliver products in small quantities, with short lead times, to
meet specific customer needs” (Liker, 2004, p. 23).
Kaizen: Kaizen is a Japanese term signifying continuous and incremental
improvement and an organizational philosophy about involving everyone in the pursuit of
improvement in productivity or performance (Burt et al., 2003).
Kaizen team: A kaizen team is a cross-functional team consisting of individuals
from product engineering, manufacturing engineering, suppliers, manufacturing, sales,
and purchasing (Burt et al., 2003). The team is empowered to achieve continuous
improvement through creativity (Alukal, 2006).
Keiretsu: Keiretsu is a series or related sequence; it implies that things are lined
up methodically or by position (Supply Management Research Group, Japan, 2005). “A
Keiretsu relationship is based on a close and stable business collaboration between
affiliated entities, rather than on family or other social ties” (Supply Management
Research Group, Japan, p. 6). According to the Supply Management Research Group,
Japan, “In a manufacturing Keiretsu, manufacturers supply components to companies on
a continual and stable basis” (p. 6) resembling a monopolistic market.
Keiretsu relationships: The Supply Management Research Group, Japan (2005)
studied the evolution of keiretsu relationships. “One definition common to many
researchers includes the words ‘fixed relationship’ or ‘close cooperation’ between

26
entities, in some cases between [a] large company and [a] conglomeration of other
companies” (Supply Management Research Group, Japan, 2005, p. 6).
Re-sourcing: Re-sourcing is the act of moving business from one supplier to
another (Burt et al., 2003). Burt et al. (2003) asserted that re-sourcing may be one
approach to improving a supplier that is not performing adequately.
Selling firm: The organization that vends material or services to the buying firm
(Dunn & Young, 2004).
Should-be-cost: Should-be-cost, also known as cost-based pricing, is when a
product is priced based on the cost structure of the supplier to manufacture the product or
service (Monczka et al., 2002). For the use of should-be-cost to be effective, the supplier
and customer should agree and understand the cost structure and profit requirements. The
use of should-be-cost allows the supplier and customer to minimize the time spent on
price negotiations and maximize the time spent on cost reduction (Monczka et al.).
Strategic alliances relationships: Alliance is a special type of collaborative
relationship where “confidential information is shared, assets are invested in joint
projects, and significant joint improvements are pursued” (Monczka et al., 2002, p. 137).
Supplier: Supplier is the contract manufacturer or contract service provider that
produces and sells a product that the buying firm intends to use to support operations in
the manufacture of a product or service to be sold to a third party. Supplier is “someone
whose business is to supply a particular service or commodity” (Supplier, n.d. Para. 2).
For the purposes of the current research, supplier was an organization whose business is
to supply a particular service or product to a buying firm.
Supply chain: Burt et al. (1996) offered the following definition for supply chain:
27
This chain is the upstream of the organization’s value chain and is responsible for
ensuring that the materials, service, and technology are purchased from the right
source, at the right time, in the right quantity. The value chain is a series of
organizations extending all the way back to firms which extract material from
Mother Earth, perform a series of value-adding activities, and fabricate the finish
good or service purchased by the ultimate customer. (p. 13)
Transactional relationship: In a supplier–buyer transactional relationship, the
relationship is limited by the exchange of money for services or products (Burt et al.,
2003). Burt et al. (2003) described the transactional relationship as “an arm’s-length
relationship wherein neither party is especially concerned with the well-being of the
other” (p. 81).
Trust: Burt et al. (2003) offered a definition that applies to the relationship
between the buyer and supplier as “being confident that the other party will do what it
says it will do” (p. 87). As the relationship between the buyer and the supplier progresses
from transactional to collaborative to alliance, the level of trust required typically
increases (Burt et al., 2003).
Assumptions
The basis of the study included three assumptions. The section includes a
definition of each assumption followed by the rationale. The survey instrument was valid
and reliable and the variables selected represent factors found to influence supplier
development results. To minimize the risk, subject-matter experts and rigorous validation
test methods were utilized to test the survey method. A subject-matter expert was an
individual with a doctoral level of education with a focus on supply chain research and
28
education. The survey instrument was evaluated in the following areas as determined by
Creswell (2003):
1. Are there inappropriate or sensitive questions that require rewording or
elimination?
2. Are there inappropriate open or closed-ended questions?
3. Question construction
a. Are questions clear?
b. Does each question require one response?
c. Is the question too wordy?
d. Are the responses overlapping?
e. Are the responses balanced?
f. Are there mismatches between the questions and the responses?
g. Does a question overuse technical jargon?
h. Does the questionnaire follow a logical order to avoid confusion?
4. Conduct a pilot test of the research instrument that allows pilot
participants to provide feedback directly on the survey.
Based on the feedback provided by the pilot group, the survey instrument was revised
before being sent to the participants of the research. The pilot group was excluded from
the research as recommended by Creswell (2003).
The second assumption was that the survey respondents would accurately and
honestly respond to the survey questions. The second assumption had two components:
(a) the individual would respond truthfully and (b) the individual would recall the
experience accurately. To minimize the risk of an error in recall, the respondents were
29
requested to utilize only recent supplier development projects between January 2005 and
February 2008. To minimize the risk of a lack of truthfulness in responses, professional
supplier development staff members with more experience and knowledge were utilized
in the research for survey responses.
The third assumption was the sample contained individuals who are
knowledgeable. To minimize the risk of this error, supplier staff members trained to
execute supplier development activities were asked to fill out the survey instrument. The
fourth assumption was that no environmental factors or industry factors would influence
the research results. To minimize the risk of this error, a single buying organization was
used for the research. Chapter 3 contains additional information on the research
methodology.
Limitations
Several limitations exist in the research. The first limitation is that the research
displays data from participants who chose voluntarily to respond to the survey. The
second is that the survey was limited in size and population to those who participated in
supplier development activities with a single large automotive parts manufacturer
between 2005 and 2008. The third is that the time to conduct the research was limited.
The fourth limitation is that the research project evaluated only the factors defined from
the literature review and omitted other important variables. The fifth is that the research
was limited to supply chain professionals who have led a supplier development project.
The study was also limited to the variables identified in the research design and dismissed
other variables with greater importance. All participants were supplier development
30
personnel who had overseen the completion of a project between January 2005 and
February 2008.
Delimitations
The delimitations of one buying organization are deliberate due to a focus of
minimizing the influence of environmental factors and of the researcher’s immediate
access to a large automotive supplier as a source of research participation. The study was
confined to survey supplier development engineers or supply chain professionals who
have executed supplier development project between January 2005 and February 2008.
The study focused only on variables identified in the research. Only suppliers who have
participated in supplier development activities with the participating buying organization
were included in the study. The research viewed supplier development from the buying
firm’s perspective and therefore excluded the supplier’s views. The research involved an
organization that supported supplier development activities and programs for over 5
years. The commitment of the organization to supplier development demonstrates that the
firm understands the benefits of such practices. Firms in the initial stages of supplier
development may have to work on factors not covered in this research.
Summary
Customers are focused on core competencies and are dependent on their suppliers
to provide products and services that allow them to be competitive in the markets (Burt et
al., 2003). One method to improve a supplier’s performance is the use of supplier
development. To effectively utilize these resources, organizations must understand the
factors that show a relationship to successful results of supplier development activities.
This research involved an examination of variables that showed a relationship to supplier

31
development results. By understanding the factors, firms may be able to establish more
effective supplier development efforts. More effective supplier development efforts
translate to the buyer firm as reduced costs, improved product quality, better delivery,
and use of improved technology (Monczka et al., 2002).
The research may have the potential to make a significant contribution to the
understanding of the variables that influence successful supplier development results. The
results of the research study provide additional knowledge on how buying firms can
improve supplier development processes. Buying firms as well as suppliers could benefit
from this research. Supplier development activities vary significantly across
organizations. Research indicated the variables that have the greatest influence on
successful supplier development could provide small and large firms the ability to
improve the results derived from these efforts. By understanding the relationship of the
independent variables related to (a) information exchange, (b) understanding of goals, (c)
supplier participation, (d) supplier leadership attitude, (e) buying firm’s coordinator
presence, and (f) supplier dependence on buying firm with the dependent variables of
results achieved through the supplier development activity in the areas of quality,
delivery, cost, and technology development, leadership of supply chain management is
served. This research may improve a firm’s capability to lead supplier development
efforts.
Narasimhan et al. (2001) noted, “Effective allocation of resources for supplier
development programs is often a difficult decision faced by managers” (para. 38). To
utilize resources effectively, one must understand the variables that provide acceptable
results. The current research involved an attempt to identify variables that relate to the
32
successful execution of supplier development programs. Watts and Hahn (1993)
indicated that as competitive pressure continues to rise, organizational leaders must
explore every opportunity to improve performance effectively, which includes the
supplier base to improve the profitability of the company. The research involved an
examination of whether a significant relationship exists between the independent
variables of the (a) suppliers’ level of information exchange, understanding of goals,
supplier participation, and supplier leadership attitude; (b) buyer firm’s coordinator
presence; and (c) supplier dependence on buying firm, with the dependent variables of
results achieved through the supplier development activity in the areas of quality,
delivery, cost, and technology development. Chapter 2 contains an examination of the
current body of knowledge as it pertains to the research question, hypotheses,
independent variables, and prior research methodology.

33
CHAPTER 2: REVIEW OF THE LITERATURE
In this chapter, the literature review is presented related to supplier development.
The literature framework includes a discussion on supplier development and the steps
firms take to execute a supplier development program. Following is a review of the
literature on (a) information exchange, (b) understanding of goals, (c) suppliers’
participation, (d) suppliers’ leadership attitude, (e) buyer firm’s coordinator’s presence,
and (f) suppliers’ dependency on a buying firm as they relate to supplier development
results. The chapter ends with a summary of the literature and an introduction to the
research method approach in chapter 3.
Literature Review
Hahn et al. (1990) held a narrow viewpoint of supplier development as “the
creation of new sources of supply when there are no adequate suppliers to meet the firm’s
requirement” (p. 3). Monczka et al. (2002) provided a broader definition: “Supplier
development is any activity undertaken by a purchaser to improve a supplier’s
performance and capabilities, to meet the purchaser’s short- and long-term supply needs”
(p. 307). The importance is on improving the existing suppliers’ performance and
capabilities to meet the buying firm’s needs and not on replacing the supplier with a new
one (Dunn & Young, 2004; Nelson, 2004). For the purpose of this research, “supplier
development is defined as the transfer of resources for the purpose of improving the
supplier’s performance and capabilities” (Easton, 2000, p. 2).
Supplier development represents a proactive approach to improving suppliers’
performance and capabilities through the use of supplier development activities to
achieve organizational objectives (Burt et al., 2003). When supplier development

34
activities are pursued, buying firms may expect to see improvements in quality, delivery,
cost, and technology (Burt et al., 2003). Successful supplier development activities may
result in the buying and supplier firms becoming more competitive, becoming more
profitable, and experiencing enhanced longevity (Krause, 1995). There is a gap in the
literature related to supplier development; therefore, additional research was reviewed
that pertained to supply chain managements.
Rationale for Supplier Development
A survey of purchasing professionals conducted in 1993 indicated that suppliers
were deficient in performance areas such as quality, delivery, cost reduction, and
bringing new technology into products (Morgan, 1993). To improve supplier
performance, supply chain management professionals organize, design, and deploy
supplier development efforts (Burt et al., 2003; Monczka et al., 2002). Koh, Saad, and
Arunachalam’s (2006) case study analysis determined that “good management of supplier
involvement and an agile SC [supply chain] can lead to better supplier performance,
improved manufacturing, and product and process improvements that in turn enhance
customer satisfaction and firm performance” (p. 463). Buying firms may design supplier
development structures with limited to extensive resources. The purpose of supplier
development efforts may range from limited activities related to measuring and
communicating a supplier’s performance to extensive support such as on-site supplier
support to assist in executing supplier improvement practices (Burt et al., 2003; Monczka
et al.; Nelson et al., 2001).
The rationale for supplier development activities in literature is evident in the
number of qualitative and quantitative studies examining supplier development practices

35
(Sanchez-Rodriguez et al., 2005). Newman and Rhee (1990) explored the just-in-time
(JIT) concept and the importance of working with suppliers to properly execute JIT
principles. Newman and Rhee showed the importance of communications to execute JIT
principles.
The key to Toyota’s success would appear to be their highly effective supplier
integration process that over the past 50 years has enabled the excellence of their
internal hoshin kanri (policy deployment) strategic total Toyota Production
System to be shared with their direct suppliers. (Bennett & O’Kane, 2006, p. 12)
Claunch (1993) examined Kawasaki Motors Corporation and identified three steps
related to successful supplier development results as preferred supplier status, supplier
qualification, and a part certification process. In an exploratory study, Krause and Ellram
(1997) identified a correlation between supplier development results and supplier firms
having philosophies regarding expected performance and the willingness to devote
resources. Liker and Choi (2004) noted the top 100 U.S. manufactures spent 48 cents for
material out of every dollar of sales compared to 43 cents in 1996. The increased
dependence on suppliers also provides a rationale to study supplier development.
Supplier Development
Supplier development activities where buying firms deploy resources to improve
a supplier’s performance include supplier scorecards, training sessions, quality
improvement workshops, on-site assessments, personnel exchange, supplier’s use of
customers’ capital equipment, capacity workshops, cost improvement workshops,
technology development, other kaizen events, and direct financial investment (Burt et al.,
2003; Easton, 2000; Monczka et al., 2002). Quantitative research by Krause and Ellram
36
(1997) indicated supplier development practices accounted for improved quality levels,
improved cycle times, improved delivery performance, and improved relationships
between the buying and supplier firms.
Top factors driving procurement organizations [buying firms] to improve supplier
development and collaboration, according to the research, include pressures to
generate year-over-year improvements in supplier quality and performance;
identify opportunities to remove non-value-added cost from the supply chain; and
develop and improve capacity, throughput, and other capabilities of key suppliers.
(“70% of Firms,” 2005, p. 10)
In a quantitative research study with 81 respondents, Watts and Hahn (1993) indicated
the most important objective of supplier development for most firms is to improve
suppliers’ quality performance to compete in the market, with a secondary focus on the
consolidation of the supply base.
Supplier Development Steps
Handfield et al. (2000) developed a conceptual model for the execution of
supplier development. Handfield et al. identified the steps as (a) “Identify Critical
Commodities,” (b) “Identify Critical Suppliers,” (c) “Form a Cross-Functional Team,”
(d) “Meet with Supplier Top Management,” (e) “Identify Key Project,” (f) “Define
Details of Agreement,” and (g) “Monitor Status and Monitor Strategies” (pp. 39-41). A
discussion of each step follows.
Step 1: Identify critical commodities. Handfield et al. (2000) described an
approach of segmenting commodities in relation to low to high volume in relation to low
to high opportunity versus risk. The result would be commodities segmented into four
37
categories: (a) “Noncritical Suppliers,” (b) “Leverage Suppliers,” (c) “Bottleneck
Suppliers,” and (d) “Critical Strategic Suppliers” (Handfield et al., p. 39). Handfield et al.
(2000) noted that suppliers in the critical strategic supplier category warrant
consideration for supplier development activities. Questions the procurement manager
should consider and answer yes to most or all include the following:
1. Does the source offer an opportunity to provide a competitive advantage?
2. Is the source expected to be a supplier for the foreseeable future?
3. Is there opportunity to accept the supplier’s suggestions?
4. Will you view the supplier as an extension of the operation?
5. Is there an objective to create a trusting relationship? (Monczka et al., 2002)
Deere uses a method of identifying 20% of the suppliers that represent 80% of the total
material spend (Burt et al., 2003). Deere also considers strategic and critical suppliers to
operations regardless of the amount of material spent for supplier development
application (Burt et al., 2003).
Gary Lennon (personal communication, May 1, 2007), Director of Supplier
Development at Delphi Corporation for the Powertrain Division, offered an alternative
segmentation approach. Lennon determined that suppliers need to be considered for
supplier development from a predictable and unpredictable viewpoint. Unpredictable
issues include a current supplier with a recent quality or delivery (volume) concern that
should be addressed to meet customer requirements on an urgent and high-priority basis.
These suppliers may surface due to a recent missed shipment or a quality spill to
operations. Predictable supplier issues include new program launch concerns, chronic
supplier poor performance in quality and delivery, strategic suppliers, and suppliers
38
targeted for kaizen activities. Launch issues are supplier performance concerns related to
new businesses going into production. Figure 2 represents a model of the segmentation
process.
Supplier Quality & Development Business Priority

Unpredictable Schedule Predictable Schedule
QVC Kaizen
Suppliers
Launch
Critical Supply Suppliers
6
$ Troubled
Tool Move
QV Crisis 2
1 3
Chronic QV 5
Suppliers
4 Strategic
Suppliers
QVC – Quality, Volume, Cost
Figure 2. Supplier quality and development business priority.
According to Gary Lennon (personal communication, May 1, 2007), suppliers are
segmented into six predictable categories of potential opportunity with an additional
unpredictable area defined as critical supply issues. Critical supply issues related to
quality and volume typically must be addressed in an urgent and unpredictable manner. If
the procurement manager believes help is needed to resolve the unpredictable issue,
assistance through supplier development may be necessary. Due to the urgency of such
issues, they may take priority over all predictable opportunities.

39
Categories 1 through 6 are predictable through a careful analysis of the supply
base as well as the value propositions of the product lines. Priority 1 suppliers are
strategic to the firm, are having launch issues or concerns, and are performing poorly
from a quality and volume perspective. Priority 2 suppliers are having launch issues and
quality and delivery concerns. Priority 3 suppliers are having launch concerns and are
strategic to the firm. Priority 4 suppliers are strategic to the firm and are having chronic
quality and volume concerns. Priority 5 suppliers are strategic to the firm. Priority 6
suppliers have an opportunity to provide a return to the firm based on a kaizen event in
the areas of quality, volume, and cost.
Step 2: Identify critical suppliers. With suppliers segmented utilizing the
preferred method of the buying firm, procurement professionals must decide which
suppliers to execute supplier development activities. A careful evaluation of the buying
firm’s value propositions, supplier’s delivery and quality performance, launch readiness,
and potential kaizen opportunities allows the procurement organization to identify
suppliers for potential supplier development activities (G. Lennon, personal
communication, May 1, 2007). Handfield et al. (2000) asserted constructing a Pareto
chart of current supplier performance concerns is a common approach for selecting
suppliers for developmental support.
Step 3: Form a cross-functional team. Monczka et al. (2002) noted, “Before
approaching suppliers and asking for improvements, it is important to develop internal
cross functional consensus for the initiative” (p. 310). Handfield et al. (2000) determined
it is important to have members of the buying firm in agreement with the scope of the
supplier development activity prior to approaching the supplier. Ford (2003), a senior
40
consultant with ADR International Purchasing Consultants, noted in a best practice
review that a key driver of success in supplier development is the buying firm ensuring
there is agreement on the current performance level of the supplier as well as the
expected performance requirements.
Step 4: Meet with supplier’s top management. Handfield et al. (2000) explained,
“Next, the buyer’s cross functional commodity team approaches the supplier top-
management group and establishes three keys to supplier improvement: strategic
alignment, measurement, and professionalism” (p. 40). Nelson (2004) identified two key
elements: lean supplier development requires an organization to invest in talent and
resources with knowledge in activities to improve suppliers’ performance and the activity
requires a long-term commitment by the leadership of the organization. Sanchez-
Rodriguez et al. (2005) revealed there “is strong justification to promote supplier
development efforts and to obtain the resources needed to implement them” (p. 299).
Step 5: Identify key projects. Handfield et al. (2000) reported after identifying
suppliers and achieving the suppliers’ leadership commitment, the team works to identify
promising opportunities and the required resources and time needed to complete the
project. Monczka et al. (2002) also noted other factors to consider such as the abilities of
the supplier and buyer personnel, strategic importance of the project, and life of the
product. It is also important for both the buyer and the supplier to understand the
potential benefits of the project (Handfield et al.). Leadership then determines the areas to
focus on for improvement and the degree of resources assigned (Burt et al., 2003; Easton,
2000; Golden, 1999; Handfield et al., 2000; Krause, 1995; Krause & Ellram, 1997;
Krause & Scannell, 2002).

41
Step 6: Define details of the agreement. In this stage, the organizations define the
scope of the agreement for the supplier development project (Handfield et al., 2000). Burt
et al. (2003) suggested obtaining signatures from all participants for a supplier
development project charter. The charter should include information related to the
business case, goals of the project, project scope, schedule and deliverables, and roles and
responsibilities (Burt et al., 2003). Monczka et al. (2002) described the importance of
coming to an agreement on the project but did not note that signatures are necessary.
Quantitative research by Krause et al. (2000) on 270 manufacturing firms showed that
supplier incentives are key enablers of supplier development activities. Nelson (2004)
noted a process of conducting top leadership meetings between the procurement
organization and the supplier firm to gain agreement for a project.
Step 7: Monitor status and modify strategies. Monczka et al. (2002) determined
that top management must monitor the project and meet often to ensure the momentum
continues. Empirical research by Krause and Ellram (1997) from 527 members of the
National Association of Purchasing Management indicated that procurement
organizations where expectations were exceeded invested more effort in many ways such
as communication, formal evaluations, training and education, and involvement. Watts
and Hahn (1993) conducted research on 81 companies, which determined that accurate
and timely evaluation of the supplier development activity is vital to the success of the
project. Burt et al. (2003) noted that once the metrics are defined for the project, a
“closed-loop corrective action procedure system is installed to review the process,
address gaps in performance, and continuously improve performance” (p. 524).

42
Research in Supplier Development
Hahn et al. (1990) purported that the main objective of purchasing is to ensure
quality suppliers are capable of meeting the supply needs of the organization. Two
definitions were introduced under the concept that a supplier development program is any
“systemic organizational effort to create and maintain a network of competent suppliers”
(Hahn et al., p. 3). The first definition offered by Hahn et al. asserted a narrow
perspective of supplier development as activities to develop new suppliers when none
exists. The second expanded the definition to include activities intended to upgrade
existing suppliers to meet customer needs (Hahn et al.).
According to Niezen, Weller, and Deringer (2007), “Corporate leaders expect
supply managers to ensure an uninterrupted flow of goods and services (often on a just-
in-time basis), help improve product quality, reduce cycle time or time-to-market, and
increase the rate of innovation” (p. 7). To improve performance, supply chain
management organizations design and deploy supplier development efforts (Burt et al.,
2003; Monczka et al., 2002). Buying firms may design supplier development structures
with limited-to-extensive resources (Burt et al., 2003). The purpose of the efforts may
range from limited activities related to measuring and communicating a supplier’s
performance to extensive support such as onsite supplier assistance in executing supplier
improvement practices (Burt et al., 2003; Monczka et al.; Nelson et al., 2001).
The rationale for supplier development activities in literature is evident in the
number of case studies examining organizations achieving success in part through the
supplier’s contribution (Dunn & Young, 2004; Krause & Scannell, 2002; Sako, 2004;
Sanchez-Rodriguez et al., 2005). Leenders and Blenkhorn (1988) noted that supply
43
objectives of firms could be met by aggressively working with existing suppliers or in
some cases creating new capable suppliers. Between 1980 and 1990, Japanese firms’
investment patterns in the United States shifted from a passive approach of supplying
capital to an active approach of managing, engineering, and designing (Newman & Rhee,
1990). An example of an active approach is the arrival of the joint venture between
General Motors and Toyota, named New United Motors Manufacturing Inc. (NUMMI).
Toyota’s traditional approach to the supplier–buyer relationships followed two key
concepts known as keiretsu and kaizen activities. Keiretsu refers to the network of
businesses that are interdependent and interrelated to create a value chain with a
competitive edge due to a focus on constant improvement. The kaizen approach refers to
the philosophy that suppliers will work on continuous improvement to provide the buyer
with opportunities to competitively improve the organization’s performance (Newman &
Rhee).
Sanchez-Rodriguez, Martinez-Lorente, and Spain (2004) asserted purchasing
leadership understands that product quality is limited by the level of quality of incoming
material and services, and therefore a focus on supply-chain-management is inevitable.
“NUMMI deployed three focuses in working with suppliers: (a) Its approach to
scheduling, (b) Its communication, and (c) The relationship between planning and order
release” (Newman & Rhee, 1990, p. 18). NUMMI utilized the JIT concept in scheduling.
“To NUMMI, JIT is not simply the arrival of inventory at the correct time; rather, it is a
total manufacturing philosophy” (Newman & Rhee, p. 18). NUMMI communicated to its
suppliers through simple methods such as the use of kanban cards to inform suppliers
what and how much to ship. Electronic communication methods were also deployed to
44
ensure effective communications. Knowledge of NUMMI’s planning process was shared,
utilizing communications channels to assist the suppliers’ understanding and performance
in meeting requirements (Newman & Rhee).
Claunch (1993) examined Kawasaki Motors Corporation and defined three steps
related to successful supplier development results as preferred supplier status, supplier
qualification, and a part certification process. Claunch emphasized the importance of
Kawasaki Motors Corporation executing improvements internally within the organization
prior to taking them to the supplier base. The organization also identified three important
strategic performance measures for the supplier development process: (a) “100%
quality,” (b) “On-time deliveries,” and (c) “Correct counts” (Claunch, para. 7). The
supplier development program’s certification process was founded on the principles of
listening to suppliers and working meticulously toward joint success of both the buying
and the selling firm (Claunch).
Organizations need a capable supply base network to meet competitive market
requirements (Burt et al., 2003; Krause, 1995: Monczka et al., 2002). Watts and Hahn
(1993) noted, “A supplier development program is designed to create and maintain such a
network and to improve various supplier capabilities that are necessary for the buying
organization to meet its increasingly competitive challenges” (para. 1). Survey results
from 81 respondents showed that greater than 50% of the organizations rated suppliers
only once or twice per year (Watts & Hahn, 1993). Watts and Hahn also showed that
63% of the organizations that responded had some type of supplier development program
in place, the programs varied in terms of scope and name, 43% of the programs were in
place for more than 4 years, and the projects had different levels of participation. The
45
research produced three findings: (a) the importance of defining clear goals and
objectives, (b) supplier assessments are important to the success of supplier development
efforts, and (c) supplier development efforts should focus on future supplier needs instead
of only on current quality or cost concerns (Watts & Hahn).
In an exploratory study with 527 high-level purchasing executives, Krause and
Ellram (1997, para. 34) compared responses related to the results achieved from
suppliers’ development activities and separated them into two categories: exceeded and
fallen short. The group designated exceeded reported that the organization’s supplier
development activities exceeded expectations. The group designated fallen short reported
that the supplier development efforts has fallen short of the organization’s expectations.
The research indicated that firms where supplier development efforts exceeded
expectations placed more effort on communications, involvement with suppliers,
feedback and evaluations, and training and education (Krause & Ellram).
Krause et al. (1999) examined responses from 89 minority-based suppliers to
assess the effectiveness of an organization’s minority supplier development program.
“The term ‘minority-owned suppliers’ is used by the U.S. federal government to describe
a company that is at least 51% owned by a minority person such as Black American,
Hispanic American, Native American, or Asian-Pacific American” (Krause et al., 1999,
p. 33). The results indicate small minority-owned suppliers were generally less positive
about supplier development activities compared to large minority-owned suppliers. Small
minority-owned suppliers reported greater communications problems and were more
concerned about the customers’ focus on reducing the number of suppliers (Krause et al.,
1999).
46
Easton (2000) conducted research limited to one firm and the firm’s suppliers
involved in supplier development efforts. Surveys were completed by both the buying
firm and the supplier organization. Seventy-four acceptable paired responses were
analyzed to understand the factors that contributed to successful supplier development
efforts. The research indicated the extent of supplier development activities at a
composite level did not correlate positively with improved supplier performance.
Analysis of the data indicated that if the buying firm’s goal is to ensure knowledge is
utilized at the supplier base, greater initial and follow-up commitment is needed. The
research also indicated the importance of selecting the right suppliers. The data revealed
the supplier selection process is important and factors such as the level of supplier
dependency on the customer, degree of suppliers’ upper management support, and
suppliers’ leadership’s willingness to appoint a coordinator are integral to successful
supplier development results (Easton).
Research by Krause et al. (2000) utilizing survey responses from 527 members of
the National Association of Purchasing Management showed that “supplier assessment
and supplier incentives are key enablers of supplier development efforts for the
manufacturing firms in this sample” (p. 49). The research revealed that supplier
incentives and supplier assessment stimulate supplier action indirectly to improve
performance. The data also showed that direct involvement of the buying firm in
activities such as training plays a direct role in achieving significant results (Krause et al.,
2000).
Krause and Scannell (2002) collected data comparing 312 products and 200
service organizations. The results indicated supplier development activities at the service-
47
based firms are different from the approach at product-based firms (Krause & Scannell).
Product-based firms reported higher use of supplier evaluation, certification programs,
and supplier feedback activities (Krause et al., 2000). “Overall, product-based firms
tended to take a more active role in supplier performance improvement than did service
firms by conducting site visits, providing training/education, and directly investing in the
supplier” (Krause et al., 2000, p. 17).
Dunn and Young (2004) executed a case study of five firms based on a model that
includes an analysis of a buying firm’s expectations and current supplier assessment to
determine the type of supplier relationship and the performance gap that exists. The
results of the research indicated factors important to supplier development across all
industries including level of participation, established communication loops, consistent
measurement method, and known escalation process. Dunn and Young proposed from the
research that buying and supplier firms with relationships based on price elicit few
supplier development activities.
Sako (2004) compared supplier development activities at Honda, Nissan, and
Toyota to understand the differences in the organizations’ approaches. Sako indicated
Toyota’s twofold approach of separating the Toyota Production System (supplier
development) from the purchasing function allows the suppliers to learn as if they were a
part of the Toyota organization, while the purchasing function focuses on total quality
control. The separation allows the supplier to focus on learning how to execute
improvements and screening the supplier from the purchasing organization. The Honda
and Nissan approach unifies these efforts, offering a single point of focus for the supplier;
however, the unified approach represents a possible impediment to learning. Nissan and
48
Toyota have an identified inner core of suppliers in which process improvement
approaches are taught utilizing a hands-on approach (Sako).
Table 1
Summary of the Qualitative Research on Supplier Development
Author Contribution Comments

Claunch (1993) Identifies 3 steps involved in supplier Prescriptive; Case
development: (1) preferred supplier study of Kawasaki
status, (2) qualification of supplier, and Motors Corporation.
(3) part certification of a supplier.
Krause, Ragatz, & Results showed smaller suppliers were Mixed research study
Hughley (1999) generally less positive about supplier of 89 minority-based
development efforts. suppliers.
Handfield, Research indicated supplier development Article presents survey
Krause, Scannell, is time consuming and results take time data and examples
& Monczka to be realized. drawn from case
(2000) studies.
Dunn & Young Research indicated ineffective Case study of 5 buying
(2004) measurement criteria may be a key firms.
obstruction to supplier development.
Sako (2004) Comparative study of supplier Comparison case study.
development activities at Honda, Nissan,
and Toyota.
49
In addition to qualitative research, there is quantitative research on supplier
development. Table 2 represents a summary of the quantitative research conducted on
supplier development.
Table 2
Summary of the Quantitative Research on Supplier Development
Author Contribution Comments

Krause & Ellram Identified and discussed the antecedent Empirical analysis of
(1997) variables to supplier development, which 527 high-level
include support of top management, cross- purchasing executives.
functional effort, and effective communication.
Easton (2000) Identified and discussed significant factors that Empirical study of one
contribute to successful supplier development buying firm. 74
approaches such as extensive supplier support. participants
Krause, Results indicated that supplier assessment and Empirical study
Scannell, & supplier incentives are key factors to promote utilizing 527
Calantone (2000) successful supplier development efforts. responses.
Krause & Research indicated that product-based firms 312 product-based and
Scannell (2002) tend to be more active in supplier development. 200 service firms.
Sanchez- Research studied the impact of supplier Empirical research
Rodriguez, development practices on organizations’ utilizing 306 surveys
Hemsworth, & performance. The results indicated strong from purchasing
Martinez- justification for supplier development activities managers.
Lorente (2005) based on improved organizational results.

50
The limited supplier development research over the past 20 years has
demonstrated the importance of commitment, communications, measurement systems,
and trust in achieving successful supplier development results (Handfield et al., 2000;
Krause, 1995; Krause et al., 1999, 2000). To execute supplier development, an
understanding of the concept of supply chain management is required (Burt et al., 2003;
Monczka et al., 2002). “With suppliers making a significant contribution to a company’s
competitive position, it would be a fatal mistake if companies were to neglect the
potential of supplier development practices” (Wagner, 2006, p. 566).
Supply Chain Management
Monczka et al. (2002) noted the supply chain encompasses all actions connected
with the stream and transformation of products or services from the raw material stage
(mined out of the earth) through to the end-buying firm. The chain is referred to as dirt to
customer, referring to the extracting phase of taking the product from the earth and then
processing it until it is in its intended form for the final customer. Monczka et al. also
noted the supply chain includes the information flow throughout the transformation
phases.
The term supply chain management became an accepted catchphrase with
consultants in the 1980s and throughout the 1990s and was analyzed by the scholarly
community (Burt et al., 2003). “Supply chain management is generally regarded as the
integration of the flows of material, information and financing around three competitive
priorities: price, delivery and quality” (Stading & Altay, 2007, p. 29). A transition
occurred by the late 1980s where purchased material increased to 50 to 60% of the cost of
sales in the United States (Burt et al., 2003; Nelson et al., 2001). “In the twenty-first
51
century, it will no longer be single companies competing against each other. The
individual company must position itself into a competitive SC and the different SCs will
compete against each other” (Koh et al., 2006, p. 463). Due to the high impact of
purchased material, the purchasing and material management function was propelled in
importance within an organization’s leadership.
Gordon (2005) reported, “If a company is pursuing lean and just-in-time
deliveries, key suppliers need to be on a lean journey themselves, because the lack of
synchronization can adversely impact cost, quality and delivery” (p. 21). Nelson et al.
(2001) noted the shift within organizations will continue to occur, resulting in the
continued alignment of supply chain management performance measures with
organizational performance measures. Supplier quality can be evaluated similar to the
method the customer provides performance indicators, delivery performance will parallel
customers’ expectations, and language for product development, timing, and information
systems will be present throughout the supply chain (Gordon).
Supply chain includes activities that link suppliers and customers downstream and
upstream, where supplier’s link to customers that become suppliers for other customers
until the final product is delivered to a final customer (Stading & Altay, 2007). These
activities include systems management, operations, purchasing, material scheduling,
order processing, transportation, cash disbursements, inventory turns, warehousing, and
customer service (Monczka et al., 2002). For purposes of the current research, the
definition offered by Monczka et al. will be utilized for the research: “Supply chain
management is the integration of these activities through improved supply chain
relationships to achieve a sustainable competitive advantage” (p. 5). Advantages that can
52
be achieved through proper supply chain management include (a) quality improvements,
(b) cost-saving improvements, (c) reduced product or service cycle times, (d) improved
product or service delivery, and (e) access to suppliers’ product and process technology
(Monczka et al.).
Research Variables
An organization operates with limited resources to apply to activities that support
its operation. The literature review offers insight into the research conducted in the area
of supplier development. Research has shown that organizations depend on a number of
activities to improve suppliers’ performance, such as use of scorecards, supplier
assessments, workshops, training, direct involvement of personnel at the suppliers’ or
customers’ location, and many other projects (Claunch, 1993, Easton, 2000; Handfield et
al., 2000, Krause, 1995; Krause & Ellram, 1997; Krause & Scannell, 2002; Watts &
Hahn, 1993). This section includes a review of the research findings related to the factors
studied.
Information Exchange
Information exchange was selected as a variable for the research due to the
numerous authors advocating its importance in successful supplier development
processes (Burt et al., 2003; Dunn & Young, 2004; Elmuti, 2002; Monczka et al., 2002;
Sanchez-Rodriguez et al., 2005). Burton (2000) defined information exchange as the
“relaying of business-related information in a way that enables the recipient to take
action” (p. 134). Moberg (2000) noted the “premise behind SCM [supply chain
management] is that the sharing of information and coordination of strategies among
firms in a supply chain can reduce total logistics costs and enhance value delivered to the
53
customer” (p. 6). Sako (2004) posited that higher levels of information exchange between
organizations in a supply chain lead to lower inventories and higher levels of customer
satisfaction. Ogden (2006) showed that top leadership support, good information systems,
and cross-functional support are important to an organization focused on supply-base
reduction. “Effective communication skills are indispensable skills for a project manager
to possess” (Sutterfield, Friday-Stroud, & Shivers-Blackwell, 2006, p. 34). Lambert and
Knemeyer (2004) noted as the level of partnership grows, the need for greater
communication also increases.
In quantitative research by Easton (2000), there was not a significant relationship
between information exchange and supplier capabilities. “SCM is facilitated greatly by
the latest in communication technologies, such as electronic data interchange (EDI) and
the Internet, which facilitates quick communication and end-user consumer demand to
the upstream stages of the supply chain” (Basnet, Corner, Wisner, & Tan, 2003, p. 57).
Based on a survey response from 386 purchasing executives, Petersen, Ragatz, and
Monczka (2005) asserted that collaborative planning sessions have a positive impact on
supply chain performance. Other research emphasizes the need to improve the
communication activities to ensure suppliers clearly understand customers’ expectations
(Forker et al., 1999; Forker & Mendez, 2001; Krause et al., 2000; Narasimhan et al.,
2001).
Newman and Rhee (1990) noted, based on case study research, that effective
communications is a key element to successful supplier development results. Empirical
analysis of responses from 527 high-level purchasing executives indicated that effective
communications may be an antecedent variable to successful supplier development

54
results. Dunn and Young (2004) posited based on case study research that collaborative
relationships are necessary to achieve the lowest total cost. Monczka et al. (2002) noted
that an important aspect of a collaborative relationship is the ease of information
exchange and a commitment to one another’s success. Tan (2002) explained that
managers must invest to improve information exchange capabilities and advancements in
electronic media to make communications more possible. Paulraj and Chen’s (2007)
empirical research on logistics activities of over 200 firms found that exchange of
information through interfirm communication is an essential condition for realizing the
potential benefits of collaborative relationships.
Petersen et al. (2005) concluded based on research that supply chain managers
and suppliers should be linked, and traditional systems to communicate information are
essential to effective collaboration. Additionally, the level of trust between the buyer and
the supplier has an impact on the level of collaboration (Petersen et al.). Lasch and Janker
(2004) posited top-performing suppliers should be integrated in the buying organization
to foster greater levels of collaboration and cooperation. “Supply chain integration:
information sharing, internal integration, external integration with suppliers, external
integration with customers plays a significant role in the overall success of a business”
(Zailani & Rajagopal, 2005, p. 384).
Understanding of Goals
Understanding of goals was selected as a variable for the research due to the
processes (Krause & Scannell, 2002; Sako, 2004; Sanchez-Rodriguez et al., 2005; Taj &
Berro, 2006). Goals establish organizational priorities and represent the foundation of
55
how resources are allocated (Lindsey, 1989). Lindsay wrote, “There must be both
organizational and individual commitment to the strategy and the goals that derive from
the strategy” (p. 9). Goals may fall into two classifications: strategic goals and
operational goals. “Strategic goals are the long-term results that an organization seeks to
achieve in pursuing its purpose” (Lindsey, p. 9). For purposes of the current research, the
operational classification of goals was utilized, referring to the short-term objectives that
an organization plans to accomplish to support the achievement of strategic goals.
“Operating goals are normally one year or less, mostly quantitative and they form the
basis for allocating resources” (Lindsey, p. 9). Shepherd and Gunter (2006) suggested
based on research that purchasing organizations need to adopt a systemic approach to
supplier performance measures including effective feedback.
A premise of the current research was that organizations are placing greater
strategic importance on supplier development processes (Sanchez-Rodriguez et al., 2005;
Wagner, 2006). Since the intense global competition during the 1980s and 1990s, supply
management professionals have emphasized a focus on keeping costs low, improving
quality, and ensuring on-time delivery (Krause, 1995). Research showed that specific and
difficult goals lead to higher performance versus having no goals (Lee, Bobko, Earley, &
Locke, 1991). Norrie and Walker (2004) posited that a balanced scorecard consisting of
measures on budget, quality, on-time, and on-strategy leads to greater depth in business
case development and higher levels of performance. Researchers indicated that supply
chain leaders are building closer relationships, including a greater understanding of goals
with important suppliers (Burt et al., 2003; Krause; Monczka et al., 2002; Nelson et al.,
2005). Krause noted that buying–supplier relationships in the United States are moving
56
from traditional transactional relationships to relationships with more cooperation and
collaboration to achieve specific objectives.
Doolen et al. (2006) reported, “Good supplier measurement systems allow
companies to improve quality, move toward JIT production, and dramatically reduce both
order cycle time and inventory levels” (p. 26). Empirical analysis by Watts and Hahn
(1993) showed the importance of establishing clear goals and objectives in relation to
executing a successful supplier development program. Krause and Ellram (1997)
concluded in research that organizations can improve suppliers’ performance by
demanding more and clearly communicating expectations. Maltz’s (1998) case study
analysis showed that performance of an electrical firm improved significantly by inviting
distributors on-site, opening a clear communication path for expectations and a clear
objective to be involved in supplier improvement efforts.
The research also indicated that in an organization with little oversight, goal
communication was also low (Lindsey, 1989). Supply chain management research
indicated that ineffective measurement criteria to objectives or goals may impede
supplier development results (Dunn & Young, 2004). “Overall, firms should plan direct
supplier development measures thoroughly, obtain improvement targets through a formal
supplier evaluation, communicate goals to suppliers and provide feedback about
performance improvements regularly” (Wagner, 2006, p. 566).
Level of Supplier Participation
Understanding the level of supplier participation by the selling firm was selected
as a variable for the research due to the numerous authors advocating its importance in
successful supplier development processes (Burt et al., 2003; Krause, 1995; Monczka et
57
al., 2002). “Resource allocation clearly testifies to people throughout the organization,
that the goal is important and that the senior manager is serious about it” (Lindsey, 1989,
p. 211). Lindsay noted that resource allocation to specific strategies communicates to
others within the firm where priorities have been positioned and conveys authority,
power, and status. In line with these findings, Easton (2000) showed where supply chain
leadership dedicated greater resources to spend more time at suppliers’ locations as a
result of greater supplier development results. Nelson (2004) determined two key
elements: (a) lean supplier development requires an organization to invest in talent and
resources with knowledge in activities to improve a supplier’s performance and (b) the
activity requires a long-term commitment by the leadership of the organization.
Purchasing plays a key role in spanning functions by fostering relationships and
communication to improve quality performance for both the supplying and the buying
firm (Paulraj & Chen, 2005).
Empirical analysis of 527 high-level purchasing executives indicated support of
top management and cross-functional effort are antecedent variables to successful
supplier development results (Krause, 1995). Monczka et al. (2002) presented a process
map for supplier development that includes cross-functional support and monitoring the
project to ensure success. Burt et al. (2003) offered a generalized process for supplier
development projects that emphasized the importance of the buying firm making
available to the supplier personnel such as engineers to assist the team in achieving
results. Burt et al. (2003) reported world-class supply chain management organizations
dedicate resources to work hand-in-hand with supplier personnel to develop supplier
capabilities. Emiliani (2000) pointed out that a key to Honda’s supplier development
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program is its commitment to provide adequate resources that are trained to execute
improvement projects. “Joint operational improvement activities could avoid unnecessary
changes in design, reduce time delay in delivery, improve production scheduling, and
achieve better quality” (Lo & Yeung, 2006, p. 214).
Coordinator’s Presence
Understanding the level of coordinator’s presence was selected as a variable for
the research due to the numerous authors advocating its importance in successful supplier
development processes (Burt et al., 2003, Easton, 2000; Monczka et al., 2002; Trent,
2004; Wagner, 2003). Based on a review of literature, Wagner asserted that supplier
participation in buying firms may lead to lowering costs, improved quality, and reduced
developmental costs. In the process map for supplier development, Monczka et al.
emphasized the importance of reaching agreement on the key project and securing the
joint resources to execute. The joint agreement should specify the roles and
responsibilities of each party in the execution of the project (Monczka et al., 2002). Trent
(2004) reported organizations should focus on areas such as measurement and evaluation
as one of the characteristics in the foundation to pursue progressive supply strategies.
Handfield et al. (2000) noted to avoid the pitfalls of poor supplier development
results; the execution process should include a priority to achieve supplier leadership
commitment. Handfield et al. noted supplier top leadership support is a major factor in
the success of supplier development efforts. Easton (2000) reported to maximize results
of supplier development efforts, it is important for the supplier firms to be willing to
appoint a champion. Chu and Fang (2006) explained trust is an important factor in
fostering commitment between the buying firms and the supplier organization.
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Burt et al. (2003) revealed the use of a charter as a supplier development enabler.
Within the charter, the assignments and roles should be documented to ensure there is an
understanding of the responsibilities for various activities (Burt et al., 2003). Lindsey
(1989) noted that organizational resources are allocated based on the priorities of the
organization. Goals establish organizational priorities and represent the foundation of
how resources are allocated. Research indicates that where management follow-up and
oversight is high, organizational understanding of goals is also high (Lindsey). Easton
(2000) determined based on a survey utilizing one customer firm and 74 supplier and
customer survey responses that suppliers that appoint a coordinator for the supplier
development process achieve higher levels of execution of the knowledge learned
through supplier development activities.
Supplier Leadership Attitude
supplier development activity may have an impact on the level of results achieved
(Handfield et al., 2000). Research into this factor provided insight into what pre-
requirements may be necessary to initiate a supplier development process.
“Overwhelmingly, the interviewed managers emphasized that ‘real’ SCM cannot deliver
exceptional value without the highest levels of managerial commitment both within their
companies as well as up and down the supply chain” (Fawcett, Ogden, Magnan, &
Cooper, 2006, p. 24). This new breed of leadership is tasked with being able to influence
and inspire followers with a clearly articulated vision of new goal achievement (Leonard,
2003). Hartley and Choi (1996) reported that organizations with the focus of cooperative
participation in a supplier development activity may achieve greater results than suppliers
60
coerced into the activity. Easton (2000) conducted empirical research in which 86
suppliers were analyzed, indicating that the more positive attitude by the supplier’s
leadership, the more supplier capability improvement occurred. Organizational
performance may be attributed to the leadership setting clear goals and long-term
business strategies directly related to projects (Boehnke, Bontis, DiStefano, & DiStefano,
2003).
Doolen et al. (2006) noted, “Strong, collaborative relationships with suppliers
combined with shared strategic objectives are crucial to ongoing success in supply
management” (p. 34). Whitfield and Landeros (2006) purported organizational culture
may contain barriers that hinder the buyer and suppliers from contributing ideas. Tracy,
Lim, and Vonderembse (2005) advocated that supply chain management capabilities
should be viewed as an aid to obtaining a competitive advantage. One of the factors for
success identified by the Tyson–Wendy’s partnership was the need for communication at
upper levels (Lambert & Knemeyer, 2004).
Dependency on Buying Firm
As the level of dependency of the supplier firm increases on a customer firm, the
commitment to achieving successful supplier development may increase. Because limited
resources are available to any supplier development effort, selecting suppliers that
provide the most return on investment may be of importance to the supplier development
process. Easton (2000) posited based on empirical research that there is a positive
relationship between the dependency level of the supplier on the customer firm and the
actual execution of the knowledge learned through supplier development activities.

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Conversely, Easton’s research indicated that the less dependent a supplier is on a
customer firm, the less likely supplier development results will be achieved.
Bates and Hollingworth (2004) noted powerful customers may coerce supplier
organizations in a manner that is not in the suppliers’ best interest. A survey of 69
suppliers to a customer firm indicated firms may engage in relationships contracting in
order for the customer to have the power to coerce the supplier (Bates & Hollingworth).
McHugh, Humphreys, and Mclvor (2003) reported organizations may want to diversify
the customer base to avoid the domination. The research showed that coercive power may
also be applied in a manner that provides a supportive outcome to the supplier (Bates &
Hollingsworth). Supplier development is an activity where the supplier and buying
organization invest resources to improve performance and should be viewed as a win–
win relationship (Kocabasoglu & Suresh, 2006).
Conclusion
The literature review involved an examination of recent articles, books, and
research related to supplier development. To improve performance, organizations choose
to deploy supplier development efforts (Burt et al., 2003). Research indicated a strong
justification for supplier development activities based on improved organizational results
(Sanchez-Rodriguez et al., 2005). Research determined that factors such as defining clear
goals and objectives, supplier assessments, communications, supplier incentives, trust,
supplier-appointed leadership, measurement system, supplier dependency on the buying
firm, and commitment have relationship with results from supplier development practices
(Dunn & Young, 2004; Easton, 2000; Krause & Ellram, 1997; Krause et al., 1999, 2000;
Watts & Hahn, 1993). Improvements in areas such as quality, delivery, cost, and
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technology can be achieved through supplier development activities (Monczka et al.,
2002).
Organizations operate with limited resources to apply to activities such as supplier
development. The research study involved an investigation of variables to determine the
extent of the relationship between independent variables and successful supplier
development results. The definition of success is performance improvements in a
supplier’s value proposition in the areas of quality, delivery, cost, and technology that
enhance the ability of the buying firm to compete in the market (Burt et al., 2003). The
research provides insight into the following question: Is there a significant relationship
between the factors of the level of (a) information exchange, (b) understanding of goals,
(c) supplier participation, (d) supplier leadership attitude, (e) coordinator presence, and
(f) supplier dependence on the buying firm and the dependent variables of supplier
development results in the areas of quality, delivery, cost, and technology?
Summary
Chapter 2 included a review of literature that is relevant to the issues related to
supplier development. More explicitly, the chapter offered a definition of supplier
development for the study, an overview of the rationale for supplier development, a
conceptual model for the execution of supplier development, a summary of research on
supplier development and supply chain management, and a conceptual review of the
factors in the research model. The conceptual framework for the research relates to the
impact of information exchange, understanding of goals, supplier participation level by
the customer firm, leadership attitude of suppliers’ coordinators presence, level of
dependency the supplier firm has on the customer firm, and the effect leadership’s
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attitude has on supplier development results. For the purpose of this research, “supplier
development is defined as the transfer of resources for the purpose of improving the
supplier’s performance and capabilities” (Easton, 2000, p. 2).
The rationale for supplier development is well-documented in literature (Dunn &
Young, 2004; Handfield et al., 2000; Krause et al., 2000; Sako, 2004; Sanchez-Rodriguez
et al., 2005). Handfield et al. noted if a firm is dissatisfied with a suppliers’ performance,
three alternatives can be pursued: (a) bring the outsourced item in-house and produce it
internally, (b) re-source with a more capable supplier, or (c) help improve the existing
supplier’s capabilities (p. 37). Burt et al. (2003) determined that buying firms may
execute supplier development approaches in an attempt to improve a supplier’s
performance. Extensive research from the 1980s to the present revealed important factors
to consider when executing a supplier development approach.
A conceptual model developed by Handfield et al. (2000) for the execution of
supplier development includes a seven-step approach. In addition, research supporting the
approach was reviewed, conveying important findings related to the research conceptual
model. Handfield et al. noted buying firms should identify critical commodities and
suppliers, form cross-functional teams, meet with supplier’s top management, define key
projects, define the details of the supplier development agreement, and monitor the
project to achieve successful supplier development results. The approach offered by
Handfield et al. has implications to the factors studied in the current research. Alternate
approaches and supporting research were also reviewed to ensure greater understanding
of supplier development activities.

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Supply chain management refers to the activities undertaken by the buying firm to
manage all actions connected from the raw material through the transformation processes
to the final product (Monczka et al., 2002). With purchased parts being an estimated 50 to
60% of the total cost of a saleable product, organizations are paying more attention to the
supply base (Burt et al., 2003; Nelson et al., 2001). Advancement in quality, cost, cycle
times, delivery, and technology can be achieved through proper supply chain
management (Monczka et al.).
Hahn et al. (1990) noted that supplier development programs range from
developing suppliers when none exists to activities that improve existing suppliers’
capabilities and performance. In a competitive market, organizations need capable
suppliers to meet customer demands (Burt et al., 2003; Krause, 1995; Monczka et al.,
2002). The major supplier development research was reviewed, including earlier research
by Newman and Rhee (1990) utilizing a case study approach of NUMMI and its
suppliers. Additional case study research conducted by Dunn and Young (2004) indicated
that ineffective measurement criteria may be a key obstruction to supplier development
results. Quantitative research by Krause and Ellram (1997) and Easton (2000) revealed
that top leadership support and buying firms’ positive attitude are important to successful
supplier development efforts.
Although there is little empirical evidence, the supplier development literature
revealed that information exchange, understanding of goals, supplier firm participation,
suppliers’ leadership attitude, presence of a coordinator, and supplier dependency on the
buying firm may be important factors for successful supplier development results. This
chapter included an examination of the major variables and their interrelationship in

65
supplier development. Chapter 3 covers the research design, appropriateness of the
design, research questions, and other methodological issues.

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CHAPTER 3: METHOD
The purpose of the current correlation and multiple linear regression analysis
research study was to analyze the relationship between the independent variables of (a)
information exchange, (b) understanding of goals, (c) supplier participation, (d) supplier
leadership attitude, (e) buyer firm’s coordinator presence, and (f) supplier dependence on
buying firm with the dependent variables of supplier development results in quality,
delivery, cost, and technology advancement. Chapter 3 covers the independent and
dependent variables, hypotheses, research design, data collection methodology, and data
analysis methods used to answer the research questions. The research methodology
describes the methods used to collect data on the factors that may have a relationship to
supplier development results in the areas of quality, delivery, cost, and technology. The
intent of the research was to study the relationship between the independent and the
dependent variables.
Research Design
The relationship between the independent variables and supplier development
results was studied to understand their relationship. For the purpose of the current
research, “supplier development is defined as the transfer of resources for the purposes of
improving the supplier’s performance and capabilities” (Easton, 2000, p. 2). Chapter 2
included a review of literature on the steps to execute supplier development and factors
that may be attributed to successful execution. “The evolution of the purchasing
function’s importance within the organization and the evolution of the buyer-supplier
relationship have occurred, in part, because buying firms increasingly recognize the
potential contribution of their suppliers’ performance to their own competitive position”

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(Krause, 1995, p. 1). Firms engaged in supplier development activities expect to see
improvements in areas such as quality, delivery, cost, lead-time, and technology
effectively enhancing the value propositions of the buying firm (Burt et al., 2003).
Appropriateness of Method
Carter and Ellram (2003) noted supply chain management research has progressed
from case study analysis to hypotheses testing of the normative literature. A quantitative
approach was appropriate due to a desire to numerically answer the research questions
and the objective to test theory found in the literature. A quantitative research method
using a multiple linear regression design was the preferred methodology for conducting
the study. “Multiple regression analysis is most commonly used to determine how one
factor called the dependent variable, for example wages, is influenced by another factor
or set of factors called the independent variable(s), for example job qualifications”
(Moore & Braswell, 1989, p. 253). The method utilizes quantitative data to statistically
evaluate the relationship of the dependent and independent variables (Aczel, 2002).
Research in supplier development can only be executed in a social setting. Therefore,
there will remain influences determined by chance (Moore & Braswell; Pedhazur, 1997).
“Multiple regression is a way of dealing with these difficulties” (Moore & Braswell, p.
254).
When multiple regression analysis is used to study a relationship, the independent
and dependent variables must be defined (Aczel, 2002). The multiple regression method
allowed the researcher to evaluate the relationship between the independent variables of
(a) information exchange, (b) understanding of goals, (c) supplier participation, (d)
supplier leadership attitude, (e) buyer firm’s coordinator presence, and (f) level of
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supplier dependence on buying firm with the dependent variables of supplier
development outcome in the areas of quality, delivery, cost, and technology. The intent of
the analysis was to determine the statistical relationship between the independent
variables (a-f) and the dependent variable (supplier development outcome). “This method
of statistically controlling for the simultaneous effect of numerous factors often
constitutes the best available substitute for controlled laboratory experimentation”
(Moore & Braswell, 1989, p. 254). Figure 3 represents a model for the research project.
Supplier Organizational –
Independent Variables
a. Level of information exchange Supplier Development Outcome –

Dependent Variables
b. Level of understanding of
goals 1. Quality Performance
c. Level of participation 2. Delivery Performance
d. Level of supplier leadership 3. Cost Savings Performance

attitude
e. Level of coordinator presence 4. Technology Development
f. Level of suppliers’
dependence on the buying firm
The survey data will be separated based on the focus of the supplier development
activity (quality, delivery, cost, or technology). The data will be analyzed using
correlational and multiple regression analysis.
Figure 3. Supplier development research model of independent and dependent variables.
Appropriateness of Design
The intent of the project was to expand on the qualitative and quantitative
research that has been conducted in the field of supplier development to gain a greater
69
understanding of factors that may impact supplier development results. Tables 1 and 2,
which were reviewed in chapter 2, provided a summary of the qualitative and quantitative
research conducted on supplier development.
A multiple regression analysis approach utilizing data mining and a survey
instrument was deemed the most appropriate research method to accomplish the goal of
the study. The research study involved using a multiple regression analysis design to
accomplish the primary objective of determining the extent of the relationship between
the independent variables of (a) information exchange, (b) understanding of goals, (c)
supplier dependence on buying firm and the dependent variable of the supplier
Research Questions and Hypotheses
One primary question drove the research. Is there a relationship between the
supplier dependence on buying firm and the dependent variables of supplier development
results in quality, delivery, cost, and technology advancement? The following research
questions were investigated through the research:
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The research questions were applied in four groups based on the focus of the following
supplier development activities (dependent variables): (a) quality, (b) delivery, (c) cost,
and (d) technology.
The following hypotheses derived from the literature review in supplier
development:
and technology.
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technology.
technology.

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Population and Sampling Frame
The research study involved gathering data from the total population of 42
supplier development engineers and supply chain professionals who have executed
supplier development projects between January 2005 and February 2008 at a large
automotive supplier. Meetings were held with all supplier development managers and
supplier development engineers to introduce the research and ensure a clear
understanding of the projects targeted for the research. When data were required from
managers, an informed consent form was provided for signing (see Appendix B). The
scope of projects completed between January 2005 and February 2008 was the target
projects for this research. The projects was limited to this period due to the availability of
results and the belief that supplier development engineers have greater ease in recalling
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the level of the independent variables and information data bases for the results achieved
related to the supplier development activity.
The population consisted of initially 42 supplier development engineers and
supply chain professionals who have led supplier development projects. Supplier
development engineers helped identify projects in the area of quality, delivery, cost, and
technology completed between January 2005 and February 2008. Supplier development
engineers were encouraged to complete a survey for each project completed. The
population represented supplier development engineers who entered into supplier
development activities with a single large automotive customer (buying organization)
with the intent to improve performance in the areas of quality, delivery, cost, and
technology with a supplier organization. The research was limited to a single large
automotive parts customer to reduce the potential influence of other variables such as the
industry, competitive environment, and culture on the results of the research. The
advantage of using this population was that the approach targeted supplier development
activities where a supply chain professional worked directly with a supplier to execute an
improvement project. The approach enabled the researcher to statistically analyze data
using correlation and multiple regression analysis results in comparison to the
independent variables from the supplier development activity (Pedhazur, 1997).
The sample size targeted was to achieve participation from 38 supplier
development engineers in order to produce results with a statistical confidence of 5% and
+/- 5% precision utilizing the finite population corrected for proportion suggested by
Israel (1992). For this research a sample size of 29 was achieved for data analysis. This
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produces results with a confidence level of 90% and +/- 10% precision. This issue is
discussed in chapter 5 in the limitation of the research.
Informed Consent, Confidentiality, and Data Collection
Prior to distribution of the informed consent form and survey instrument,
meetings took place with supplier development engineers and managers to review the
pre-notification survey letter (see Appendix C). The purpose of the meeting was to
introduce the research project to the supplier development engineers and managers to
explain (a) the organization’s leadership approval to conduct the research (see Appendix
A), (b) the intent of the research, (c) that participation was strictly voluntary, (d) how
confidentiality of participants and suppliers names was protected, (e) that the survey had
no right or wrong answers, (f) the informed consent form (see Appendix D), and (g) the
survey instrument (see Appendix E), as well as to request the supplier development
engineers to participate in the research. Participation was requested from supplier
development engineers who led an activity and had knowledge to answer the research
questions. Potential participants were informed that the participation was voluntary and if
they chose not to participate or to withdraw from the study at any time, they could do so
without penalty or loss of benefit. Participants were requested to electronically type their
name in the informed consent form (see Appendix D) and return it with the completed
survey or surveys. During this phase, the supply chain professionals were asked to
complete a survey instrument for each project completed between January 2005 and
February 2008.
Research participants were requested to complete the informed consent form and
survey instrument after the manager and supplier development engineer introductory
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meeting. Research participants then received the survey via the Internet. The survey
consisted of a series of questions related to the variables being studied. The package
included an informed consent form (see Appendix D), and the Supplier Development
Survey (see Appendix E). The informed consent form advised the participant of the focus
of the study and the method to ensure privacy and explained to each participant that
consent to be a research participant was strictly voluntary. The letter also explained the
data would be used in aggregate form, ensuring the names of the organization and
participants would be protected and remain confidential. The participants were required
to electronically sign the informed consent form (see Appendix D) prior to completing
the survey to acknowledge consent to participate in the research. The informed consent
form was to be returned with the survey instrument. If a participant refused to participate
in the research study, there were no adverse implications personally or professionally.
Once a survey was returned, the data was transferred to a spreadsheet for
statistical analysis. The participants and suppliers name was excluded from the
spreadsheet. Excluding the information assisted in protecting the confidentiality of the
participants and suppliers. The completed survey was placed in a secure location to
ensure the confidentiality of participants and suppliers was and continues to be protected.
Geographic Location
The sampling plan consisted of all supplier development engineers who had
completed a supplier development project between January 2005 and February 2008. The
research survey linked a supplier development project with a specific supplier
development engineer. The suppliers and supplier development engineers were located in
all regions. It was expected that the number of projects reported would be higher in North
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America. This was due to the limited number of supplier development activities executed
within the European and Asia Pacific region. No supplier development engineers or
supplier development projects were excluded from the research due to geographic
location. The research results contain an outline of the level of supplier participation by
region. The large automotive supplier has locations globally with supply chain
professionals in all regions.
Data Analysis
Multiple regression model is represented as Y = a + b1X1 + b2X2 + . . . bnXn + u. X
represents the values of the independent variables, b represents the slope, and Y
represents the output or dependent variable (Aczel, 2002). The multiple regression model
is estimated based on the data, and “the resulting regression equation can be evaluated in
terms of its ability to explain the variation in the dependent variable Y” (Moore &
Braswell, 1989, p. 257). Taken collectively, the coefficient of determination (R2) explains
the level of variation in the dependent variable that can be accounted for by the variation
in the independent variables (Moore & Braswell).
As a measure of linear relationship, it [the analysis of variation table] tells us how
well the regression line fits the data. It is also an important indicator of the
predictive accuracy of the equation. Typically, we would like to have an r2 that
explains 80 percent or more of the variation. (Cooper & Schindler, 2003, p. 590)
The r2 value can be between 0 and 1. The higher the r2 value, the greater the explanatory
power of the equation (Moore & Braswell).
The research examined whether a significant relationship exists between the

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level of supplier dependence on buying firm and the dependent variables of results
achieved through the supplier development activity in the areas of quality, delivery, cost,
and technology development. The independent and dependent variables were measured
using ratio phrase completion and ratio type scales. Ratio data can be achieved using a
phrase completion scale (Hodge & Gillespie, 2003). The following question represents a
phrase completion scale:
I read literature about supply chain management . . . (participant selects a number
1-10 representing the level the person reads supply chain management literature)
0 - Never 10 - Everyday without fail
0 1 2 3 4 5 6 7 8 9 10
Tables 3 and 4 represent a summary of the independent and dependent variables, data
level, and scale utilized for the research.

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Table 3
Independent Variables With Data Level and Scale
Independent variable name Data level Scale
a. Levels of buying firm Ratio (PC) 0 (no information exchange) to 8 (all
information exchange information exchanged) (9-point scale)
b. Level of understanding of Ratio (PC) 0 (no understanding of goals) to 8 (total
goals understanding of goals) (9-point scale)
c. Level of supplier participation Ratio Number of supplier departments involved
in project
d. Level of supplier leadership Ratio (PC) 0 (no leadership support) to 8 (total
attitude leadership support) (9-point scale)
e. Level of coordinator presence Ratio % of time supplier coordinator spent
managing the project
f. Level of supplier dependence Ratio % of sales to customer firm
on buying firm
Note. PC = phrase completion.
Hodge and Gillespie (2003) noted that a phrase completion scale offers an improved
method over a Likert-type scale to provide higher reliability coefficients and stronger
factor loading.
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Table 4
Dependent Variables With Data Level and Scale
Dependent variable name Data level Scale
Quality Ratio % of first-time quality improved
Delivery Ratio (PC) 9-point scale (phrase completion): 0
(no improved delivery performance) to
8 (all parts delivered on time)
Cost Ratio % of annual purchase value saved
Technology Ratio (PC) 9-point scale (phrase completion): 0
(project did not meet targets) to 8
(project met all targets)

Note. PC = phrase completion.
The research objectives were accomplished utilizing Pearson correlation
coefficients developed in a correlation matrix table. If a relationship did exist, the form,
direction, and magnitude of the association with the independent variables were analyzed.
In addition, multiple regression analysis was utilized to evaluate the relationship of the
collective independent variables with the dependent variables.
Data were also analyzed through a comprehensive analysis of variance (ANOVA)
table, which is the output by most statistical software which fits the multiple regression
model. While it is the form of a traditional ANOVA table, it does not come from a
designed experiment but rather is a convenient-form summary table of the regression
analysis. The regression analysis allowed the researcher to identify the independent
variables that have statistical significance in correlation to successful supplier
development results. In addition, the F test for overall regression provides statistical
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support for accepting or rejecting the null hypothesis for each of the four dependent
variables. Multiple regression analysis allows researchers to use inferential statistics to
examine the relationship of the dependent and independent variables (Cooper &
Schindler, 2003).
A p value determines the overall significance of a multiple equation (Triola,
1997). “A small P-value signifies that a particular multiple regression equation has good
overall significance and is valuable for making predictions” (O’Leary, 2003, p. 75). Table
5 shows a modified scale provided by Triola (p. 365) to interpret p values.
Table 5
Modified Table to Show the Triola, p Value, and Interpretation
p value Interpretation of results
Less than 0.01 High statistical significance of variable
Very strong evidence against the null hypothesis
0.01 to 0.05 Statistically significant of variable
Adequate evidence against the null hypothesis
Greater than 0.05 Insufficient evidence against the null hypothesis
A qualitative research method was not chosen because of the study’s objective on
evaluating the relationship between the independent and the dependent variables
identified during the literature review. The research objective was to quantitatively
evaluate the levels of independent variables in relationship to the dependent variable.
Qualitative research typically seeks to explore an area of interest to develop theories and
would not meet the objective of the current study (Creswell, 2003).
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Validity, Reliability, and Instrumentation
When examining instruments for possible inclusion in a research activity,
Creswell (2003) suggested the following factors should be considered: (a) information
related to the reliability and validity of scores from past uses, (b) how recent the
instrument was developed, (c) the extent the instrument has been used and cited in past
research, and (d) the availability of reviews for the instrument. An examination of past
research related to supplier development showed there was no existing survey instrument
that could be utilized to address the research questions. The survey instrument was
developed to execute this research utilizing past research instruments. The survey
consists of scales that represent the independent variables while the buying firms’
performance criteria represent the dependent variable. Existing scales were utilized when
possible. However, several scales were developed through adaptation of existing research
questions based on a buyer firms perspective versus a suppliers perspective.
Creswell (2003) noted, “Reliability means that individual scores from an
instrument should be nearly the same or stable on repeated administrations of the
instrument, they should be free from sources of measurement error, and they should be
consistent” (p. 180). Cronbach’s alpha was calculated based on the initial survey results.
The results were evaluated prior to expanding the survey to other participants. Only after
the values were considered acceptable was the survey used to complete the research.
According to Creswell (2003), “Validity means that researchers can draw
meaningful and justifiable inferences from scores about a sample or population” (p. 183).
Content and criterion validity were addressed based on a review of the survey instrument
by supplier development professionals and two individuals with a doctoral-level

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completed education with a professional focus on supply chain management.
The survey instrument was modified until acceptable results were achieved. Each
modification required the content and criterion validity outlined above to be reevaluated
until the instrument was deemed statistically reliable and valid. The criterion for
acceptance was agreement by the supply chain professional and two individuals with
doctoral-level education with a professional focus on supplier development that the
survey instrument asked valid questions and the reliability of the instrument was
acceptable based on Cronbach’s alpha.
The following demographic information in Section 1 of the survey instrument was
collected utilizing the survey instrument:
1. Primary product or product line supplied by supplier development engineer.
2. Annual supplier sales revenue: supply chain professional. Data were grouped
into eight areas: (a) Less than $500,000, (b) >$500,000 to $1 million, (c) >$1 million to
$5 million, (d) >$5 million to $10 million, (e) >$10 million to $50 million, (f) >$50
million to $100 million, (g) >$100 million to $500 million, and (h) >over $500 million.
3. Region of manufacturing location: Supplier development engineer.
4. Focus of supplier development activity: quality, delivery, cost, and
technology. The source of data was the supplier development engineer. The data were
collected from databases from supplier development engineers and supply chain
professionals.
5. The date the supplier development project was concluded. Data was retrieved
by the supply chain professional assigned to the project.
Values were collected on the dependent variables in Section 1 of the survey

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instrument. Information on past supplier development activities had been collected by the
supplier development engineer that summarized the results related to quality, delivery,
cost, and technology. In the first section, the supplier development engineer identified the
focus of the supplier development activity. For the area noted, the following scores were
identified from the supplier development engineers’ files:
1. Quality: Percentage of first-time quality improved. Example: If the first-time
quality improved from 90 to 95%, the improvement would be 5% divided by the 10%
(gap) resulting in a 50% first-time quality improvement.
2. Deliver: 9-point scale (phrase completion) from 0 (no improved delivery
performance) to 8 (all parts delivered on time).
3. Cost: Percentage of annual purchase value saved calculated by the value saved
divided by the total annual purchase value.
4. Technology: 9-point scale (phrase completion) from 0 (no execution of
technology development project) to 8 (total success of technology project).
One independent variable received a score based on data mining techniques. The value of
the supplier’s dependence on the customer firm was scored using the percentage of
business the buying firm represented based on annual sales.
The supplier development engineers then proceeded to Section 2 of the survey
instrument. This section focused on the remaining information required related to the
independent variables. The following sections discuss each variable studied. The source
of scales of information exchange can be seen in Table 6. The source of the scale related
to level of understanding of goals can be seen in Table 7.

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Table 6
Scale Related to Level of Information Exchange
Questions adapted for this

research: 0 (no information
Level of information exchange utilizing a 7-point
exchanged) to 8 (all information
scale from strongly disagree to strongly agree
needed was exchanged)
“This customer has visited our facility with the The result of customer visits has
purpose of providing feedback” (p. 100) been . . .
“The performance matrix reports we have received The result of the customer score
from the customer have been very helpful to us card has been . . .
in improving our performance” (p. 100).
“We have agreed to the feedback that is provided to Not used
us by the customer” (p. 100)
“This customer has provided us with meaningful The result of customer
feedback” (p. 100). communication has been . . .
“This customer has encouraged us to provide The supplier development activity
feedback concerning this supplier development resulted in . . .
program” (p. 100).
“This customer has appeared to utilize the feedback Not used
that we provided” (p. 100).
“This customer solicits our feedback through a Customer/ supplier formal forums
formal forum in which high level of goals and resulted in . . .
areas in need of attention are discussed” (p. 100)

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Note. Quotations are from Easton (2000).
Table 7
Scale Related to Level of Understanding of Goals
Questions adapted for this research utilizing
Level of understanding of goals utilizing a an 8-point phrase completion scale: 0 (no
7-point scale from strongly disagree to understanding of goals) to 8 (total
strongly agree understanding of goals)
“We had a good understanding of the The criteria used to measure the
criteria that would be used to measure our performance of the supplier development
performance” (p. 102). project resulted in the supplier having . . .
“The goals of the program were well Based on pre-work prior to the supplier
outlined to us before implementation was development project the customer and
started” (p. 201). supplier firm had . . .
“We had a good understanding of what the Based on pre-work prior to the supplier
customer expected of us before the development project the supplier has a . . .
implementation started” (p. 102).
“This customer knew exactly what it The customer organization had . . . of the
wanted from the supplier development supplier development project.
program” (p. 102)
The following criterion was used by Krause (1995) to identify the level of
participation. The survey participants identified the departments involved in the supplier
development effort. The departments included purchasing, material management,

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manufacturing, quality control, supplier quality, product engineering, process
engineering, marketing, finance, and any other specified. For the purposes of this
research, similar questions were utilized. The number of departments involved in the
supplier development project was utilized as the scale for the research. Table 8 shows the
source of the scale for level of supplier leadership attitude.
Table 8
Scale Related to Level of Understanding of Suppliers Leadership Attitude
Questions adapted for this research
Level of understanding of supplier utilizing a 9-point phrase completion scale:
leadership attitude utilizing a 7-point scale 0 (no leadership support) to 8 (total
from strongly disagree to strongly agree leadership support).
“Top leadership was more than willing to When the suppliers leadership was
participate in the supplier development approached the top leadership
program” (p. 97). demonstrated . . .
“Since the implementation of supplier During the execution phase of the supplier
development activities, top management development project top leadership
has believed that the programs are a great demonstrated . . .
idea” (p. 97).
“Top management only participates to Top leadership demonstrated through
placate the customer” (p. 97). involvement . . .
For purposes of the research, level of coordinators (buyer firm representative)
presence was measured based on an 8-point scale where 0 represents 0% of the time and
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8 represents 100% of the time. The phrase completion question was phrased, “The
supplier coordinator assigned to the program spent . . . (scale completion phrase) on the
supplier development project.”
The level of supplier dependence was calculated using the customer’s annual
purchase value divided by the total annual sales of the supplier organization. This
percentage indicates the level of dependency the supplying firm has on the customer. The
higher the percentage, the greater the supplier relies on the customer firm for revenue.
The survey instrument was presented to two supplier development professionals
at the buying firm and reviewed by two doctoral-level academics in supply chain
management. Based on the feedback the survey instrument was modified in order to
improve clarity.
The Dillman (2000) tailored design method was adapted for data collection.
TDM [tailored design method] consists of five steps which are; 1) sending out a
prenotification letter letting the respondent know that a survey will be arriving; 2)
and initial mailing of the survey along with a cover letter; 3) a thank you/reminder
post card to either thank the person for completing the survey or to kindly remind
them to complete the survey; 4) a replacement survey and cover letter; and 5) a
final contact by either phone of some type of priority mailing. (Easton, 2000, p.
75)
The tailored design method was utilized for this research. E-mail was utilized to deliver
the survey instrument and a conference call was utilized to explain (a) the organization’s
leadership approved the research project, (b) intent of the research, (c) that participation
is strictly voluntary, (d) how confidentiality of participants and suppliers names are
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protected, (e) that the survey has no right or wrong answers, (f) the informed consent
form for participants 18 years of age and older (see Appendix D), and (g) the survey
instrument (see Appendix E), and request the supplier development engineers to
participate in the research. Following the meeting, the supplier development engineers
were requested to complete the informed consent form by typing their name and filling
out a survey for each project he or she completed January 2005 and February 2008.
Pilot Study and the Validity and Reliability of Survey Instrument
Due to the limited data available, the survey was evaluated by a selective number
of participants. The approach involved enlisting the expertise of two educators to
evaluate the survey instrument for validity, relevance, and clarity. Four supplier
development professionals also answered the survey and offered suggestions to improve
the instrument. Two academic practitioners, highly recognized for supply chain
managements knowledge and experience, were identified. When contacted, the two
educators graciously accepted the assignment to review the survey instrument and
provide feedback on the questions for clarity and relevance based on the intent of the
research. Robert A. Kemp, Ph.D., C.P.M. (Certified Purchasing Manager) and Robert B.
Handfield, Ph.D. reviewed the survey instrument and provided feedback for
improvement. Four supply chain professionals were also selected from the organization
used in the research and agreed to provide feedback on the survey instrument. The four
supply chain professionals who participated in the validation of the survey instrument
were excluded from the research.
Kemp is a “nationally recognized author, lecturer and consultant, [and] his supply
management career spans nearly four decades” (Institute for Supply Management, 2005,
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para. 2). Kemp is recognized for providing assistance and guidance to supply chain
professionals (Institute for Supply Management). Kemp suggested improvements to the
structure of the survey instrument such as ensuring equal spacing of the numerical values
with boxes to make it clearer for the participants in answering the questions. Handfield is
the “Bank of America University Distinguished Professor of Supply Chain Management
at North Carolina State University, and Director of the Supply Chain Resource
Cooperative” (Supply Chain Redesign, n.d., para. 1). “Handfield is considered a thought
leader in the field of supply chain management, and is an industry expert in the field of
strategic sourcing, supply market intelligence, and supplier development” (Supply Chain
Redesign, para. 6). Handfield suggested reducing the scale used to answer the questions
and adding some qualitative questions that may provide insight when analyzing the
results, i.e., What type of information was shared? Both Kemp and Handfield
communicated that the survey questions and research had relevance in the advancement
of research in supply chain management. Their suggestions were used to improve the
survey instrument.
The second evaluation of the survey instrument took place with a team of four
professionals experienced in supply chain management who are employed by the
organization used for the research. Two of the participants were managers of supplier
development engineers, and two were supplier development engineers. The four
participant’s pilot tested the survey instrument and provided feedback for improvement.
Only minor changes were suggested on the survey instrument. However, there were
several suggestions made relative to the distribution method. A review of historical
records showed that many projects were not well documented and would be missed in the
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survey distribution. The managers and the engineers suggested that a meeting should take
place where the researcher presented the informed consent form and survey instrument
with a request for each engineer to participate in the research by providing completed
surveys for the projects he or she led between January 2005 and February 2008. The
engineers would then send the answered surveys directly to the researcher.
Confidentiality of the participants and suppliers was protected by immediately removing
their names when inputting the data into a data file of survey results. The survey
distribution and collection method was modified based on the suggestion of the pilot
survey participants.
To assess instrument reliability Cronbach’s alpha was computed on the first 25
completed surveys. Cronbach’s alpha is used to measure the proportion of variability in
the responses that results from differences in the respondents. The Cronbach’s alpha
calculation was made on the 11 Likert-type scale survey questions. Results of this
analysis showed the overall reliability of the survey instrument was 0.977, which is well
above the nominal cut-off value of 0.70.
Summary
The research study employed a correlation and multiple linear regression analysis
to understand the relationship between the independent and the dependent variables
related to supplier development results. Correlation and the multiple regression analysis
research method were appropriate as the study involved a search to understand the
buyer firm’s coordinator presence, and (f) supplier dependence on buying firm, with the
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dependent variables of supplier development results in quality, delivery, cost, and
technology. The method allowed the factors to be evaluated individually and collectively.
The outcome of the current research may provide information to buying firms interested
in starting or strengthening a supplier development effort.

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CHAPTER 4: RESULTS
The purpose of the current quantitative research study was to analyze the
buyer firm’s coordinator presence, and (f) supplier dependence on buying firm with the
dependent variables of supplier development results in quality, delivery, cost, and
technology advancement. The research involved supplier development engineers from
one large automotive component firm. The results of the study expand the body of
knowledge on supply chain management and augment past research by analyzing
variables from the perspective of a buying firm. A lack of understanding of the variables
that contribute to successful supplier development efforts may impede the firm’s ability
to utilize invested resources effectively to meet customer requirements. Research in the
area of supplier development may provide supply chain professionals the knowledge to
improve results.
Participants in the research led supplier development activities at a supplier to a
large automotive component firm. Supplier development engineers who lacked
experience as defined by the supervisor and were acting in an apprentice role were not
included in the research. Each supplier development engineer answered the survey with a
specific supplier development project in mind. Supplier development engineers in some
cases answered more than one survey based on leading multiple projects with multiple
suppliers. Research participants were asked to reflect on their development activities with
supplier firms that participated in supplier development activities between January 2005
and February 2008.

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One primary question drove the research: Does a relationship exist between the
supplier participation, (d) supplier leadership attitude, (e) buyer firm’s coordinator
presence, and (f) supplier dependence on buying firm and the dependent variables of
supplier development results in quality, delivery, cost, and technology advancement? The

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Pearson correlation coefficients and multiple regression analyses provided data to show
evidence if the independent variables individually and collectively correlated to the
dependent variables. The research questions were applied in four groups based on the
focus of the supplier development activity or project dependent variables related to (a)
quality, (b) delivery, (c) cost, and (d) technology.
Population, Sample Selection, and Demographics
The population consisted of 42 supplier development engineers and other supply
chain professionals working for a large automotive supplier who completed one or more
supplier development projects between January 2005 and February 2008. The
development engineers and supply chain professionals completed the survey instrument
based on the results of development projects completed at a supplier location. The supply
chain professionals were asked to fill out one survey for each project completed. Out of
the population of 42 supply professionals who received the survey, 29 completed and
returned data for analysis. The sample size of 29 out of the population of 42 supply chain
professionals produced results with a statistical confidence level of 90% and +/- 10%
precision utilizing the finite population correction for proportions suggested by Israel
(1992). Seven of the 42 supplier development engineers were in transition to other
assignments and opted out of the research. Attempts to increase the level of participation
to improve the precision level failed to achieve the desired level of confidence of 95%
and +/- 5% precision. Chapter 5 includes a discussion on the limitation.
The supplier development engineers selected the projects to complete the survey
instrument. Figure 4 shows the number of surveys completed related to supplier annual
sales. The data show the projects reported had a wide distribution of annual sales from
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less than $500,000 to greater than $500,000,000, with the majority of projects falling in
the range of $10,000,000 to $500,000,000.
Number of Surveys vs. Suppliers Annual

Sales in the Research Data
Number of Surveys Completed
25
20
15
10
5
0
0M
M
M
M
0M
M
M
M
.5
00
$5
00
0
00
.
$5
$1
$0
$1
$1
$5
5
to
>$
to
to
to
<
to
to
0M
M
M
0M
M
>$
5
.5
00
>$
$0
5
>$
>$
1
>$
Annual Sales of Suppliers
Figure 4. Number of surveys versus suppliers annual sales in the research data.
The completed surveys showed that the number of supplier development projects
reported had 43 related to quality, 35 related to cost, 27 related to delivery, and 18 related
to technology. Forty-three of the 75 surveys had a single focus and thirty-two had a focus
in multiple areas. The data were analyzed for each dependent variable (quality, delivery,
cost, and technology) for a total of 123 usable survey combinations. The results are
reviewed later in this chapter.
Figure 5 shows the distribution by purchase product area. The data show the
majority of projects reported were from suppliers that produced metallic components
followed by chemical and electrical purchase part areas. Metallic components include
parts from families such as stampings, machined parts, forgings, and castings. Chemical
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parts include components such as injection molded, rubber, and gaskets. Electrical
components include parts such as wire harnesses and electrical assemblies.
Number of Projects per Purchase Part Area
50
Number of Projects
40
30
20
10
0
Metallic Chemical Electrical
Area of Purchased Part
Figure 5. Number of projects per purchase part area.
Surveys were received from Europe, Asia Pacific, and North America. The
majority of projects (50) were reported from North America, followed by Asia Pacific
(23), and Europe (2).
The supplier development engineers identified the functional areas that
participated in the projects. The data showed that of the 75 total projects, the functional
areas that participated in the workshop were manufacturing (71) followed by quality
control (55), process engineering (53), material management (42), product engineering
(41), sales (37), supplier quality (28), purchasing (20), and other (9). The “other”
category was identified as an individual that supported lean activities and reported
directly to the leadership of the organization. The individual did not belong to one
functional area.
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Data Collection
Beginning on January 5, 2008, supplier development managers were contacted to
review the research project objectives. A meeting was conducted with supplier
development managers and engineers to review the research project and explain (a) the
organizational leadership’s approval to conduct the research, (b) the intent of the
research, (c) that participation was strictly voluntary, (d) how confidentiality of
participants’ and suppliers’ names would be protected, (e) that the survey has no right or
wrong answers, (f) informed consent for participants 18 years of age and older (see
Appendix D), and (g) the survey instrument (see Appendix E) and to request the supplier
development engineers to participate in the research.
Once the meeting took place, the informed consent form and survey instrument
were electronically distributed to the participants via e-mail. Due to the involvement of
multiple managers and staffs, it took several meetings to present the data requesting
participation in the research. The final meeting took place on February 12, 2008. The
supplier development engineers or supply chain professionals were requested to
electronically sign the informed consent form and fill out a survey instrument for each
supplier development project they led. The entire supplier development engineer team
was targeted for the research with supply chain professionals (managers) who completed
projects related to quality, delivery, cost, or technology. Supply chain professionals were
requested to return the completed survey or surveys within 1 week following the meeting.
After 1 week, if no response was received, the informed consent form and survey
instrument were redistributed to the supply chain professionals with a second request for
participation. If an individual indicated he or she did not want to participate, no further

98
contact with the supplier development engineer or manager was made regarding the
research. On March 2, 2008, the data collection was deemed complete.
The informed consent form and survey instrument were distributed electronically
with a request to complete and return via e-mail. Some surveys were returned via mail by
a supplier development engineer or supply chain professional. Survey distribution was
controlled by the researcher, but responses relied on the supplier development engineer or
supply chain professional. By contacting the managers of supplier development engineers
or the supply chain professionals directly, all targeted employees in the research were
offered the opportunity to participate in the research.
Of the population of 42 supply chain professionals, 29 or 69% completed one or
more surveys for the research. The range of returned surveys per participant was between
1 and 10. Figure 6 shows the number of surveys completed per supplier development
engineer. All participants were full-time employees of the large automotive supplier
being studied.
Number of Surveys Submitted per Supplier

Development Engineer
14
Number of Supplier
12
Development
Engineers
10
8
6
4
2
0
1 2 3 4 5 6 7 8 9 10
Number of Survey Submitted
Figure 6. Number of surveys submitted per supplier development engineer.

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Summary of Results Achieved From Supplier Development Projects
The participants were encouraged to report on all supplier development projects
completed between January 2005 and February 2008. Participants were also encouraged
to complete surveys on projects that showed acceptable as well as less-than-acceptable
results. The data showed a range of results, indicating the participants followed these
instructions. Supplier development projects focused on delivery ranging in performance
scores from 0, indicating no delivery improvement, to 8, indicating 100% of product
shipped on time. Figure 7 shows the results achieved from the delivery projects. The
scores in the chart were modified to a 9-point scale of 1 to 9.

Number of Projects with Score
Average Score was 6.6

20
15
10
5
0
1 2 3 4 5 6 7 8 9
1 - No Delivery Improvement
9 - 100% delivered on Time
Figure 7. Results of supplier development project focused on delivery.
Figure 8 reflects the results from the projects focused on quality in ascending
order. The results showed an average 48% improvement in first-time quality. The results
from the supplier development projects ranged from 0 to 94%. The figure shows
significant improvement was achieved on projects.

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First Time Quality Improvement from

Supplier Development Projects
Average Improvement 48%
Quality Improvement 100%
Percent First Time
80%
60%
40%
20%
0%
0 10 20 30 40 50
Project Number Focused on Quality
Figure 8. First-time-quality improvement from supplier development projects.
Although only 18 projects related to a technology focus, the range of results
reflected scores from 0 to 8 (on a 9-point scale). Zero reflects that there was no execution
of the project and 8 reflect that the technology project was a total success. For the
purpose of display, the scores were modified to a 9-point scale and reflected in Figure 9.
The average score reported was a 6.3.
Supplier Development Projects

Focused on Technology
Number of Technology
Average Score of 6.3

Projects with Score
10
8
6
4
2
0
1 2 3 4 5 6 7 8 9
1 - No Execution of Technology Project
9 - Total Success of Technology Project
Figure 9. Supplier development projects focused on technology.

101
Figure 10 reflects the results from the projects focused on cost in ascending order.
The results showed an average 9% improvement in cost. The percentage reflects the
percentage of cost saved versus the annual purchase value of the product purchased. The
range of results from the supplier development projects focused on cost improvement
ranged from 0 to 31%. It is also important to note that of the 43 surveys related to cost
improvement projects, 21 participants noted the supplier did not share cost information
openly on approximately 50% of the cases. This may be due, in part, to a lack of trust by
the suppliers in the customer organization. Trust may be a focus for future research.
Cost Improvement Results from Supplier

Development Projects
Average Cost Improvement was 9%
35%
improvement to Total
30%
Percent cost
25%
Spend
20%
15%
10%
5%
0%
0 10 20 30 40
Supplier Development Project Number
Figure 10. Cost improvement results from supplier development projects.
Measurement of Data
Returned surveys were manually entered into Microsoft Excel software; data were
gathered on the four dependent variables, the six independent variables, and the
demographic variables. Descriptive data included (a) focus of supplier development
project, (b) category of buy from the supplier, (c) annual supplier sales, (d) region of
supplier manufacturing location, and (e) supplier development completion date. The
independent variables included values related to (a) information exchange, (b)

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buyer firm’s coordinator presence, and (f) supplier dependence on buying firm, and the
dependent variables included the results achieved through the supplier development
activity in the areas of quality, delivery, cost, and technology development. Based on the
research questions and hypotheses, Pearson correlation coefficients and multiple linear
regression analysis were applied to the data to provide feedback to analyze the
hypotheses.
Research Questions and Hypotheses
One primary question drove the research. Is there a relationship between the
supplier participation, (d) supplier leadership attitude, (e) buyer firm’s coordinator
presence, and (f) supplier dependence on buying firm and the dependent variables of
supplier development results in quality, delivery, cost, and technology advancement? The

103
The research questions were applied in four groups based on the focus of the supplier
development activities (dependent variables): quality, delivery, cost, and technology.
The following hypotheses were derived from the literature review in supplier
development:
and technology.
technology.
104
technology.

105
Data Analysis of Each Study Variable
The survey instrument consisted of 5 demographic questions, 3 interval-type
questions, and 14 phrase-completion questions with a 9-point scale (0-8). Hodge and
Gillespie (2003) noted that a phrase completion scale offers an improved method over a
Likert-type scale to provide higher reliability coefficients and stronger factor loading.
Correlation analyses and multiple regression analyses were used to analyze participant
responses.
The independent variables were generated through the survey questions shown in
Table 9. Where there were multiple questions for a variable, the average was calculated
and used in the research analysis.

106
Table 9
Independent Variables with Data Level, Scale, and Number of Questions
Independent variable name Data level Scale
a. Levels of buying firm Ratio (PC) 0 (no information exchange) to 8 (all
information exchange information exchanged) (9-point scale).
Five questions were utilized.
b. Level of understanding of Ratio (PC) 0 (no understanding of goals) to 8 (total
goals understanding of goals) (9-point scale).
Three questions were utilized.
c. Level of supplier Ratio Number of supplier departments involved.
participation Survey respondent identified if the
following functional areas participated in
the project: sales, product engineering,
manufacturing, quality control, purchasing,
materials management, process engineering,
supplier quality, other.
d. Level of supplier Ratio (PC) 0 (no leadership support) to 8 (total
leadership attitude leadership support) (9-point scale). Three
questions were utilized.
e. Level of coordinator Ratio % of time supplier coordinator spent
presence managing the project. One question utilized.
f. Level of supplier Ratio % of sales to customer firm, One question
dependence on buying firm utilized.

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The dependent variable levels were generated through the following survey
questions related to a supplier development project: (a) first-time quality, (b) percentage
of annual purchase value saved, (c) success of technology project, and (d) percentage of
product delivered on time. The research objectives were accomplished utilizing
correlation and multiple regression analyses of the independent variables.
Pierson’s correlation coefficients allowed the researcher to evaluate the
buyer firm’s coordinator presence, and (f) level of supplier dependence on buying firm
and the dependent variables of supplier development outcome in the areas of quality,
delivery, cost, and technology. Pearson’s correlation coefficients, developed in a
correlation matrix, provided data to determine if a relationship existed. The form,
direction, and magnitude of the association with the independent variables were also
analyzed. Creswell (2003) noted that scores from .20 to .35 indicate a slight relationship,
scores between .35 and .65 show the variables are useful for a limited correlation, and
scores between .66 and 1.0 show there is good correlation. A significance score of <.05
indicates the coefficient statistics are significantly correlated (Creswell). The intent of the
analysis was to determine the statistical relationship between the independent variables
(a-f) and the dependent variable (supplier development outcome).
Multiple regression analysis allows a researcher to statistically evaluate data to
determine the collective relationship and significance between the independent and
dependent variables (Creswell, 2003). The data are shown in an ANOVA table. The
multiple correlation coefficient and statistical significance values were used to evaluate
108
the collective relationship of the independent variables with the dependent variable. The
multiple correlation coefficients (R-squared) assess the proportion of the variability that
can be explained by the second variable (Creswell). “A p-value is the probability (p) that
a result could have been produced by chance if the null hypothesis were really true”
(Creswell, p. 245). “A small P-value signifies that a particular multiple regression
equation has good overall significance and is valuable for making predictions” (O’Leary,
2003, p. 75). Table 5 shows a modified scale provided by Triola (p. 365) to interpret p
values. Triola explained a score less than 0.01 shows the variables to be highly significant
and strong evidence against the null hypothesis. Scores less than 0.05 show the variables
to be of statistical significance and there is adequate evidence against the null hypothesis
(Creswell). A score greater than 0.05 indicates there is insufficient evidence against the
null hypothesis. In the following section, the results of the analyses are discussed.
Testing of Research Questions and Hypotheses
This section contains a review of the results of the correlation analyses. The
section is separated into the four areas of focus: quality, delivery, cost, and technology.
Each area was analyzed separately to evaluate the research questions and hypotheses.
Figure 11 represents the hypotheses for the research. Following the analysis of each area
of focus, the combined results are reviewed. If the independent variable showed a
relationship of .05 (p value) or less to the dependent variable the relationship was
considered significant.
109
Supplier Organizational –
Independent Variables Supplier Development Outcome –
a. Level of information exchange Dependent Variables
b. Level of understanding of goals 1.Quality Performance
c. Level of participation Hypotheses of 2. Delivery Performance

Positive
d. Level of supplier leadership Correlation with
attitude Results 3. Cost Savings Performance
e. Level of coordinator presence

4. Technology Development
f. Level of suppliers’ dependence on
the buying firm
Figure 11. Hypotheses of positive correlation of independent to dependent variables.
Quality
This section contains an analysis of the research questions and hypotheses in
relation to the results achieved from supplier development projects in the area of quality.
Table 10 is a correlation matrix of the analyses of the independent variables scores in
relation to the dependent variable scores related to the results of supplier development
projects focused on quality.
According to Creswell (2003), “General guidelines indicate whether the size of
the coefficient provide meaningful information about strength of association between two
variables” (p. 273). The correlation coefficients show a medium level of correlation
between the independent variable of information exchange and the dependent variable of
quality improvement results from supplier development projects. The correlation
coefficients scores for understanding of goals, number of functional areas participating,
supplier leadership attitude, level of supplier development support, and supplier

110
dependence on buying firm show low levels of correlation with supplier development
results. All factors showed a positive correlation to supplier development results,
indicating as the (a) level of information exchange, (b) level of understanding of goals,
(c) level of supplier participation, (d) level of supplier leadership attitude, (e) level of
coordinator presence, and (f) level of supplier dependence on buying firm increased, the
results achieved through supplier development projects also increased. Figures 12-17
show the scatter plot diagrams for the six independent factors studied in relation to the
results achieved through supplier development results.
Table 10
Correlation Coefficients Matrix for Supplier Development Projects Focused on Quality
1 2 3 4 5 6 7
Quality 1
1. Information exchange 0.49 1
2. Understanding of goals 0.21 0.63 1
3. Number of functional 0.13 0.28 0.47 1
areas participating
4. Suppliers’ leadership’s 0.20 0.66 0.46 0.56 1
attitude
5. Supplier development 0.26 0.40 0.22 0.32 0.44 1
engineers’ level of support
6. Suppliers’ dependence 0.27 0.11 0.03 -0.03 -0.00 0.14 1

111
Level of Supplier Information Exchange vs. Quality

Improvement
Quality Improvement
Percent First Time
100%
80%
60%
40%
20%
0%
0 2 4 6 8 10
0 - No Information Exchanged 8 - All Information
Exchanged
Figure 12. Level of supplier information exchange versus quality improvement.
Level of Supplier Understanding of Goals vs. Quality

Improvement
Quality Improvement
Percent First Time
100%
80%
60%
40%
20%
0%
0 2 4 6 8 10
0 - No Understanding of Goals 8 - Complete
Figure 13. Level of supplier understanding of goals versus quality improvement.

112
Level of Supplier Participation vs. Quality Improvement
Percent First Time Quality

100%
Improvement
80%
60%
40%
20%
0%
0 2 4 6 8 10
# of Functional Areas Participating in Workshop
Figure 14. Level of supplier participation versus quality improvement.
Level of Supplier Leaderships Attitude vs. Quality

Improvement
Percent First Time Quality
100%
Improvement
80%
60%
40%
20%
0%
0 2 4 6 8 10
0 - No Leadership Support
8 - Total Leadership Support
Figure 15. Level of supplier leadership’s attitude versus quality improvement.

113
Level of Supplier Development Coordinators Presence vs.

Quality Improvement
Quality Improvement
Percent First Time 100%
80%
60%
40%
20%
0%
0 2 4 6 8 10
0 - 0% of Time Leading Project 8 - 100% of Time Leading
Project
Figure 16. Level of supplier development coordinator’s presence versus quality
improvement.
Level of Supplier Dependence on Buying Firm vs. Quality

Improvement
Percent of First Time
Quality Improvement
100%
80%
60%
40%
20%
0%
0 5 10 15 20
% of Supplier Dependence on Buying Firm
Figure 17. Level of supplier dependence on buying firm versus quality improvement.
A visual review of the scatter plot diagrams for each variable studied in this
research supports the findings of the data analysis. The diagrams indicate that none of the
factors studied show a high degree of correlation with supplier development results
related to quality.
114
Multiple regression analysis was used to evaluate the combined relationship of the
independent variables with the dependent variable related to quality. A statistical analysis
of the survey results is reflected in an ANOVA table shown in Appendix F. The ANOVA
table displayed the coefficient of determination (R-squared) score of .342. Based on the
guidelines provided by Creswell (2003), the score indicates the dependent variable has a
slight relationship with the dependent variable of first-time quality improvement. The
score indicates the collective independent variables have a low level of correlation with
the dependent variable. A t-test was used (See Appendix G) to evaluate whether the
relationship between each independent and the dependent variable was considered
significant statistically.
Table 11 shows a summary of the variables and the conclusions based on the
analysis of results from the research. A positive relationship indicates that as the level of
the independent variable increases, the results achieved through supplier development
projects with a focus on quality also increase. The table also shows the relative strength
of the relationship.
and technology. There is statistically a significant relationship between information
exchange and supplier development results focused on quality, r = .49, t(41) = 3.58, p <
.01; therefore, the null hypothesis is rejected.

115
There is statistically a medium-level positive relationship between information exchange,
a correlation coefficient of .49, and supplier development results focused on quality;
therefore, the hypothesis is accepted.
Table 11
Table of Variables, Direction of Correlation, and Strength of Relationship With Quality-
Focused Supplier Development Projects
Strength of
Independent variable Positive/negative relation relationship
a. Level of information exchange Positive relationship Medium
b. Level of understanding of goals Statistically insignificant, No relationship
no relationship
c. Level of supplier participation Statistically insignificant, No relationship
no relationship
d. Level of suppliers leadership attitude Statistically insignificant, No relationship
no relationship
e. Level of coordinators presence Statistically insignificant, No relationship
no relationship
f. Level of supplier dependence on Statistically insignificant, No relationship
buying firm no relationship
Collective level of a-f values (all the Multiple correlation The relationship
above) coefficient shows a low was significant
strength in relationship based on the data
116
technology. The research did not show statistically a relationship between understanding
of goals and supplier development results focused on quality coefficient of r = .21, t(41)
= 1.39, p > .05; therefore, the null hypothesis cannot be rejected.
technology. At a 5% confidence level, the analysis shows there is no relationship between
suppliers’ understanding of goals and supplier development outcome in the area of
quality resulting in the hypothesis being rejected.
supplier development outcome in the areas of quality, delivery, cost, and technology. The
research did not show statistically a relationship between level of participation and
supplier development results focused on quality, r = .13, t(41) = .85, p > .05; therefore,
the null hypothesis cannot be rejected.
supplier development outcome in the areas of quality, delivery, cost, and technology. At a
5% confidence level, the analysis shows there is no relationship between suppliers’ level
117
of participation and supplier development outcome in the area of quality, resulting in the
hypothesis being rejected.
The research did not show statistically a relationship between level leadership attitude
and supplier development results focused on quality, r = .20, t(41) = 1.30, p > .05;
therefore, the null hypothesis cannot be rejected.
of supplier development outcome related to quality, delivery, cost, and technology. At a
5% confidence level, the analysis shows there is no relationship between suppliers’
leadership attitude and supplier development outcome in the area of technology, resulting
in the hypothesis being rejected.
quality, delivery, cost, and technology. The research did not show statistically a
relationship between level of assignment of a development coordinator and supplier
development results focused on quality, r = .26, t(41) = 1.52, p > .05; therefore, the null
hypothesis cannot be rejected. The p value was less than .07, indicating there may be a
118
statistically marginal relationship. Future research on a larger population may clarify the
relationship.
quality, delivery, cost, and technology. At a 5% confidence level, the analysis shows
there is no relationship between level of assignment of a development coordinator and
supplier development outcome in the area of technology, resulting in the hypothesis
being rejected.
development outcome in the areas of quality, delivery, cost, and technology. There is
statistically a relationship between level of dependence on buying firm and supplier
development results focused on quality, r = .27, t(41) = 1.59, p > .05; therefore, the null
hypothesis cannot be rejected.
of revenue sold to the buying firm) will result in a higher level of supplier development
outcome in the areas of quality, delivery, cost, and technology. There is statistically a
low-level positive relationship between level of assignment of a development
coordinator, a correlation coefficient of .27, and supplier development results focused on
quality; therefore, the hypothesis is accepted.

119
There is statistically a significant relationship between the collective variables of
information exchange, understanding of goals, participation, leadership attitude,
coordinator presence, and dependence on buying firm and supplier development results
focused on quality, R2 = .34, F(6, 36) = 3.12, p < .02; therefore, the null hypothesis is
rejected.
development outcome in the areas of quality, delivery, cost, and technology. A
coefficient of determination score of .34 indicates that the collective independent variable
scores can explain 34% of the variation in the quality improvement values. The
remaining 66% cannot be explained. The score does not represent a causal relationship.
The significance score of .015 indicates there is a high level of confidence that the
collective independent variables do correlate with the dependent variable; therefore, the
hypothesis is accepted.
120
Although the correlations were low, the results indicate the importance of a focus
on each of the factors. The results also support a higher level of focus on information
exchange with improving supplier development results in the area of quality. The data
also indicate additional factors may contribute to successful supplier development results
that were not the focus of this research.
Delivery
In this section, the research questions and hypotheses were analyzed in relation to
the results achieved from supplier development projects in the area of delivery. Table 12
is a correlation matrix of the analysis of the independent variables scores in relation to the
dependent variable scores related to the results of supplier development projects.
Table 12
Correlation Coefficients Matrix for Supplier Development Projects Focused on Delivery
1 2 3 4 5 6 7
Delivery 1
areas
4. Participating suppliers' 0.60 0.76 0.79 0.66 1
leaderships attitude
6. Suppliers’ dependence 0.16 0.32 0.03 -0.17 0.047 0.14 1

121
The correlation coefficients shows a high level of correlation between level of
leadership attitude and results from supplier development projects in the area of delivery.
The score shows a medium level of correlation between the independent variable of
information exchange, understanding of goals, number of functional areas participating,
and buying firm’s level of support and the dependent variable of delivery improvement
results. The scores for suppliers’ dependence on buying firm revealed a low level of
correlation with supplier development results related to delivery. All factors showed a
positive correlation to supplier development results, indicating as the (a) level of
information exchange, (b) level of understanding of goals, (c) level of supplier
participation, (d) level of supplier leadership attitude, (e) level of coordinator presence,
and (f) level of supplier dependence on buying firm increased, the results achieved
through supplier development projects focused on delivery also increased. Figures 18-23
show the scatter plot diagrams for the six independent factors studied in relation to the
delivery results achieved through supplier development results.
Level of Supplier Information Exchange

vs. Delivery Improvement
8 - 100%
8
Delivered on Time
0 - No Delivery
6
Improvement
0
0 2 4 6 8 10
0 - In Information Exchanged 8 - All Information
Exchanged
Figure 18. Level of supplier information exchange versus delivery improvement.

122
Level of Supplier Understanding of Goals

Improvement 8 - 100%
8
Delivery on Time
0 - No Delivery
0
0 2 4 6 8 10
0 - No Understanding of Goals 8 - Complete
Figure 19. Level of supplier understanding of goals versus delivery improvement.
Level of Participation vs. Delivery Improvement

8 - 100% of Material delivered
8
6
on Time
4
2
0
0 2 4 6 8 10
Number of Functional Areas Participating in Workshop
Figure 20. Level of participation versus delivery improvement.

123
Level of Supplier Leaderships Attitude

8 - 100% of material
8
Delivered on Time
6
4
2
0
0 2 4 6 8 10
0 - No Leadership Support 8 - Total Leaderships Support
Figure 21. Level of supplier leadership’s attitude versus delivery improvement.
Level of Supplier Development Coordinators Presence

Material Delivered on Time
Improvement 8 - 100% of
8
0 - No Delivery
6
4
2
0
0 2 4 6 8 10
0 - 0% of Time Leading Project 8 - 100% of Time Leading
Project
Figure 22. Level of supplier development coordinator’s presence versus delivery
improvement.
124
Level of Supplier Dependence on Buying Firm

8 - 100% of Material
Delivered on Time
0 - No Delivery
8
Improvement
6
4
2
0
0 5 10 15 20
Percent of Suppliers Sales Sold to Buying Firm
Figure 23. Level of supplier dependence on buying firm versus delivery improvement.
A visual review of the scatter plot diagrams for each variable studied supports the
findings of the data analysis. The diagrams indicate that none of the factors studied show
a high degree of correlation with supplier development results related to delivery.
independent variables with the dependent variable related to delivery. A statistical
analysis of the survey results is reflected in an ANOVA table shown in Appendix H. The
ANOVA table displayed the coefficient of determination (R-squared) score of .474.
Based on the guidelines provided by Creswell (2003), the score indicates the dependent
variables are useful for limited correlation with the dependent variable of delivery
improvement. The score indicates the collective independent variables have a useful
limited level of correlation with the dependent variable related to delivery.
125
projects with a focus on delivery also increase. The table also shows the relative strength
of the relationship.
Table 13
Table of Variables, Direction of Correlation, and Strength of Relationship with Delivery
Strength of
Independent Variable Positive/negative relation relationship
a. Level of information exchange Positive relationship Medium
b. Level of understanding of goals Positive relationship Medium
c. Level of supplier participation Positive relationship Medium
d. Level of suppliers’ leadership Positive relationship High
attitude
e. Level of coordinator’s presence Positive relationship Medium
f. Level of supplier dependence on Statistically insignificant, No relationship
Collective level of a-f values (all Multiple correlation The relationship
the above) coefficient shows a useful was significant
level for limited correlation based on the data.

126
exchange and supplier development results focused on delivery, r = .45, t(25) = 2.52, p <
.01; therefore, the null hypothesis is rejected.
a correlation coefficient of .45, and supplier development results focused on delivery;
technology. There is statistically a significant relationship between level understanding of
goals and supplier development results focused on delivery, r = .49, t(25) = 2.84, p < .01;
therefore, the null hypothesis is rejected.
technology. There statistically a medium-level positive relationship between information
exchange, a correlation coefficient of .49, and supplier development results focused on
delivery therefore the hypothesis is accepted.
127
There is statistically a significant relationship between participation and supplier
development results focused on delivery, r = .50, t(25) = 2.85, p < .01; therefore, the null
hypothesis is rejected.
a correlation coefficient of .50, and supplier development results focused on delivery;
There is statistically a significant relationship between leadership attitude and supplier
development results focused on delivery, r = .60, t(25) = 3.78, p < .01; therefore, the null
hypothesis is rejected.
of supplier development outcome related to quality, delivery, cost, and technology. There
is statistically a high-level positive relationship between information exchange, a
correlation coefficient of .60, and supplier development results focused on delivery;
128
quality, delivery, cost, and technology. There is statistically a significant relationship
between level of assignment of a development coordinator and supplier development
results focused on delivery, r = .38, t(25) = 2.35, p = .01; therefore, the null hypothesis is
rejected.
quality, delivery, cost, and technology. There is statistically a medium-level positive
relationship between information exchange, a correlation coefficient of .38, and supplier
development results focused on delivery; therefore, the hypothesis is accepted.
development outcome in the areas of quality, delivery, cost, and technology. The research
did not show statistically a significant relationship between supplier dependence on
buying firm and supplier development results focused on delivery, r = .16, t(25) = .94, p
> .05; therefore, the null hypothesis cannot be rejected.
of revenue sold to buying firm) will result in higher levels of supplier development
outcome in the areas of quality, delivery, cost, and technology. At a 5% confidence level,
129
the analysis shows there is no relationship between dependence on the buying firm and
supplier development outcome in the area of delivery, resulting in the hypothesis being
rejected.
focused on delivery, R2 = .47, F(6, 20) = 3.01, p < .03; therefore, the null hypothesis is
rejected.
scores can explain 47% of the variation in the delivery improvement values. The
130
The significance score of .029 indicates there is a high level of confidence that the
collective independent variables do correlate with the dependent variable; therefore, the
The factors showed a low to high level of correlation with supplier development
results in the area of delivery. The factors, in general, showed a higher strength of
correlation related to the results in delivery compared to quality. The data also indicate
additional factors may contribute to successful supplier development results that were not
the focus of this research.
Cost
In this section, the research questions and hypotheses are analyzed in relation to
the results achieved from supplier development projects in the area of cost. Table 14 is a
correlation matrix of the analysis of the independent variables scores in relation to the
dependent variable scores related to the results of supplier development projects.
The correlation coefficients show a medium level of correlation between the
independent variable of information exchange, suppliers’ leadership attitude, and supplier
development support and the dependent variable of cost improvement results from
supplier development projects. The correlation coefficient scores for understanding of
goals and number of functional areas participating have a low level of correlation with
supplier development results. Supplier dependence showed no correlation to supplier
development results with a focus on cost. Information exchange, understanding of goals,
suppliers’ leadership attitude, and level of support were shown to have a positive
correlation to supplier development results related to cost. The data indicate as the level
of information exchange, understanding of goals, supplier leadership attitude, and

131
coordinator presence increases, the results achieved through supplier development
projects focused on cost also increase. The negative correlation coefficient related to the
number of functional areas participating indicates as this factor increases, results related
to cost decrease. The correlation coefficient for supplier dependence showed no statistical
evidence of correlation. Figures 24-29 show the scatter plot diagrams for the six
independent factors studied in relation to the cost improvement results achieved through
supplier development projects. Correlation coefficients calculate data to fit a linear line
(Cooper & Schindler, 2003). An analysis of the scatter plot diagram indicates the
relationship may not be linear.
Table 14
Correlation Coefficients Matrix for Supplier Development Projects Focused on Cost
1 2 3 4 5 6 7
Cost 1
3. Number of functional -0.28 0.34 0.46 1
areas participating
attitude
6. Suppliers’ dependence 0.04 0.22 0.15 -0.04 -0.12 -0.05 1

132
Level of Supplier Information Exchange

vs. % Cost Improvement
Percent Cost Improvement

40%
30%
20%
10%
0%
0 2 0 No Information
4 6
Exchanged
8 10
8 - All information Exchanged
Figure 24. Level of supplier information exchange versus percentage cost improvement.
Level of Supplier Understanding of Goals vs.

% Cost Improvement
Percent Cost Improvement
40%
30%
20%
10%
0%
0 2 4 6 8 10
0 - No Understanding of Goals
8 - Complete Understanding of Goals
Figure 25. Level of supplier understanding of goals versus percentage cost improvement.
133
Level of Participation vs. % Cost Improvement
40%
Percent Cost
Improvemnt
30%
20%
10%
0%
0 2 4 6 8 10
Number of Funtional Areas

Participated in Workshop
Figure 26. Level of participation versus percentage cost improvement.

vs. % Cost Im provem ent
Im provem ent
Percent Cost
40%
30%
20%
10%
0%
0 2 4 6 8 10
Figure 27. Level of supplier leadership attitude versus percentage cost improvement.
134
Level of Supplier Development Coordinators Presence vs. %

Cost Improvement
Percent Cost Improvement 40%

30%
20%
10%
0%
0 2 4 6 8 10
0 - 0% of Time Leading Project
8 - 100% of Time Leading Project
Figure 28. Level of supplier development coordinator’s presence versus percentage cost
improvement.
Level of Supplier Dependence on Buying Firm vs. % Cost

Improvement
40%
Improvement
Percent Cost
30%
20%
10%
0%
0 2 4 6 8 10 12 14 16 18
Percent of Suppliers Sales
Sold to Buying Firm
Figure 29. Level of supplier dependence on buying firm versus cost percentage
improvement.
research supports the findings of the data analyses. The diagrams indicate none of the
factors studied show a high degree of correlation with supplier development results
related to cost.
135
independent variables with the dependent variable related to cost. A statistical analysis of
the survey results is reflected in an ANOVA table shown in Appendix I. The ANOVA
table displayed the coefficient of determination (R-squared) score of .61. Based on the
guidelines provided by Creswell (2003), the score indicates the collective independent
variables are useful for limited correlation with the dependent variable of cost
improvement.
projects with a focus on cost also increase. A negative relationship indicates as the level
of participation of functional areas increases, the results in cost achieved through supplier
development activities decrease. No statistical evidence of correlation indicates the
variables show no relationship. Table 15 shows the relative strength of the relationship.
and technology. There is statistically a relationship between information exchange and
supplier development results focused on cost, r = .31, t(33) = 1.88, p < .04; therefore, the
null hypothesis is rejected.

136
Table 15
Table of Variables, Direction of Correlation, and Strength of Relationship With Cost
Positive/negative/no Strength of
Independent variable relationship relationship
Level of information exchange Positive relationship Medium
Level of understanding of goals Statistically insignificant, no No relationship
relationship
Level of supplier participation Negative relationship Low
Level of suppliers’ leadership attitude Positive relationship Medium
Level of coordinator’s presence Positive relationship Medium
Level of supplier dependence on Statistically insignificant, no No relationship
buying firm relationship
Collective level of a-f values (all the Multiple correlation The relationship
above) coefficients show a useful was significant
level for limited correlation. based on the data.
a correlation coefficient of .31, and supplier development results focused on cost;
137
technology. The research did not show statistically a significant relationship between
understanding of goals and supplier development results focused on cost, r = .21, t(33) =
1.22, p > .05; therefore, the null hypothesis cannot be rejected.
suppliers’ understanding of goals and supplier development outcome in the area of cost,
resulting in the hypothesis being rejected.
There is statistically a relationship between level of participation of buying firm at the
supplier location and supplier development results focused on cost, r = -.28, t(33) = -1.71,
p < .05; therefore, the null hypothesis is rejected.
There is statistically a low-level negative relationship between information exchange, a
correlation coefficient of -.28, and supplier development results focused on cost;
therefore, the hypothesis is rejected.

138
There is statistically a relationship between leadership attitude and supplier development
results focused on cost, r = .30, t(33) = 1.82, p < .04; therefore, the null hypothesis is
rejected.
is statistically a low-level positive relationship between information exchange, a
correlation coefficient of .30, and supplier development results focused on cost; therefore,
the hypothesis is accepted.
quality, delivery, cost, and technology. There is a statistically significant relationship
results focused on cost, r = .47, t(33) = 3.03, p < .01; therefore, the null hypothesis is
rejected.
quality, delivery, cost, and technology. There is statistically a low-level positive

139
development results focused on cost; therefore, the hypothesis is accepted.
did not show statistically a significant relationship between supplier dependence on
buying firm and supplier development results focused on cost, r = .04, t(33) = .22, p >
.05; therefore, the null hypothesis cannot be rejected.
of revenue sold to buying firm) to the buying firm will result in a higher level of supplier
development outcome in the areas of quality, delivery, cost, and technology. At a 5%
confidence level, the analysis shows there is no relationship between dependence on the
buying firm and supplier development outcome in the area of cost, resulting in the
Research Question 7: What relationship does the level of (a) information
exchange, (b) understanding of goals, (c) participation, (d) leadership attitude, (e) buying
firm’s coordinator presence, and (f) supplier dependence on buying firm collectively have
with the outcome achieved from the supplier development activity?
140
(e) buying firm’s coordinator presence, and (f) suppliers’ level of dependence on buying
firm and the supplier development outcome in the areas of quality, delivery, cost, and
technology. There is statistically a significant relationship between the collective
variables of information exchange, understanding of goals, participation, leadership
attitude, coordinator presence, and dependence on buying firm and supplier development
results focused on cost, R2 = .61, F(6, 28) = 7.41, p < .01; therefore, the null hypothesis is
rejected.
scores can explain 61% of the variation in the cost improvement values. The remaining
39% cannot be explained. The score does not represent a causal relationship. The
significance score of .00 indicates a high level of confidence and that the collective
independent variables do correlate with the dependent variable related to cost; therefore,
the hypothesis is accepted.
Factors that showed a medium level of correlation with supplier development
results achieved included level of information exchange, supplier leadership attitude, and
coordinator’s presence. The variables of understanding of goals and supplier participation
showed a low level of correlation to supplier development results in the area of cost. The
level of supplier dependence on the buying firm showed no discernable level of
correlation.
141
Technology
In this section, the research questions and hypotheses will be analyzed in relation
to the results achieved from supplier development projects in the area of technology.
Table 16 is a correlation coefficients matrix of the analysis of the independent variables
scores in relation to the dependent variable scores related to the results of supplier
development projects focused on technology.
Table 16
Correlation Coefficients Matrix for Supplier Development Projects Focused on
Technology
1 2 3 4 5 6 7
Technology 1
areas participating
attitude
6. Suppliers dependence 0.08 0.25 0.28 0.04 0.40 0.18 1
The correlation coefficients show a high level of correlation between the
independent variable of supplier development level of support with the dependent
variable of technology improvement results from supplier development projects. The

142
correlation coefficients for information exchange, number of functional areas
participating, and suppliers’ leadership attitude showed a medium level of correlation.
The independent factor of understanding of goals is shown to have a low level of
correlation with supplier development results. Finally, supplier dependence showed no
correlation to supplier development results with a focus on technology. All factors with
the exception of suppliers’ dependence on the buying firm showed a positive correlation
to supplier development results, indicating as the (a) level of information exchange, (b)
level of understanding of goals, (c) level of supplier participation, (d) level of supplier
leadership attitude, and (e) level of coordinator presence increase, the results achieved
through supplier development projects focused on technology also increase. Figures 30-
35 shows the scatter plot diagram for the six independent factors studied in relation to the
technology improvement results achieved through supplier development projects.
Level of Supplier Information Exchange vs.

Technology Success
Project, 0 - No Success 8 -
Success of Technology
8
Total Success
0
0 2 4 6 8
0 - No Inform ation Exchanged
8 - All Inform ation Exchanged
Figure 30. Level of supplier information exchange versus technology success.

143
Level of Supplier Understanding of Goals

vs. Technology Success
Project, 0 - No Success 8
- Total Success
8
6
4
2
0
0 2 4 6 8
0 - No Understanding of Goals
8 - Total Understanding of Goals
Figure 31. Level of supplier understanding of goals versus technology success.
Level of Participation vs.

Technology Success
8
Total Success
6
4
2
0
0 2 4 6 8
# of Functional Areas Participated in Workshop
Figure 32. Level of participation versus technology success.

144

Project, 0 - No Success
Success of Technology 8
8 - Total Success 6
4
2
0
0 2 4 6 8
Figure 33. Level of supplier’s leadership’s attitude versus technology success.
Level of Supplier Development Coordinators Presence

8
Total Success
6
4
2
0
0 2 4 6 8
0 - 0% of Tim e Leading Project
8 - 100% of Tim e Leading Project
Figure 34. Level of supplier development coordinator’s presence versus technology
success.
145
Level of Supplier Dependence on Buying Firm

Total Success 8
6
4
2
0
0 2 4 6 8
% of Suppliers Sales Sold to Buying Firm
Figure 35. Level of supplier dependence on buying firm and technology improvement
success.
research supports the findings of the data analyses. With the total number of projects in
the analysis for technology at 18, these findings should be considered limited.
independent variables with the dependent variable related to technology. A statistical
analysis of the survey results is reflected in an ANOVA table shown in Appendix J. The
ANOVA table displayed the coefficient of determination (R-squared) score of .796.
Based on the guidelines provided by Creswell (2003), the score indicates the independent
variables show good correlation with the dependent variable of technology improvement.
The score indicates the collective independent variables have good correlation with the
dependent variable related to technology.
146
projects with a focus on technology also increase. No statistical evidence of correlation
indicates the variables have no relationship. The table also shows the relative strength of
the relationship.
Table 17
Table of Variables, Direction of Correlation, and Strength of Relationship With
Technology-Focused Supplier Development Projects
Positive/negative/no Strength of
Independent variable relation relationship
Level of information exchange Positive relationship Medium
Level of understanding of goals Statistically insignificant, No relationship
no relationship
Level of supplier participation Positive relationship Medium
Level of suppliers’ leadership attitude Positive relationship Medium
Level of coordinator’s presence Positive relationship High
Level of supplier dependence on Statistically insignificant No relationship
Collective level of a-f values (all the Multiple regression The relation was
above) coefficients show a good significant based
correlation. on the data.
147
exchange and supplier development results focused on technology, r = .47, t(15) = 2.15, p
< .03; therefore, the null hypothesis is rejected.
a correlation coefficient of .47, and supplier development results focused on technology;
technology. The research did not show statistically a significant relationship between
suppliers’ understanding of the goals and supplier development results focused on
technology, r = .19, t(15) = .78, p > .05; therefore, the null hypothesis cannot be rejected.
suppliers’ understanding of goals and supplier development outcome in the area of
technology, resulting in the hypothesis being rejected.
There is statistically a relationship between participation and supplier development

148
results focused on technology, r = .41, t(15) = 1.79, p < .05; therefore, the null hypothesis
is rejected.
H3a: Higher levels of supplier participation will result in higher levels of supplier
development outcome in the areas of quality, delivery, cost, and technology. There is
statistically a low-level positive relationship between information exchange, a correlation
coefficient of .40, and supplier development results focused on technology; therefore, the
There is statistically a relationship between leadership attitude and supplier development
is rejected.
is statistically a medium-level positive relationship between information exchange, a
correlation coefficient of .41, and supplier development results focused on technology;
quality, delivery, cost, and technology. There is a statistically significant relationship
is rejected.
149
quality, delivery, cost, and technology. There is statistically a high-level positive
development results focused on technology; therefore, the hypothesis is accepted.
did not show statistically a significant relationship between suppliers’ level of
dependence and supplier development results focused on technology, r = .08, t(15) = .46,
p > .05; therefore, the null hypothesis cannot be rejected.
of revenue sold to buying firm) to the buying firm will result in a higher level of supplier
development outcome in the areas of quality, delivery, cost, and technology. At a 5%
confidence level, the analysis shows there is no relationship between dependence on the
buying firm and supplier development outcome in the area of technology, resulting in the

150
focused on technology, R2 = .80, F(6, 11) = 7.15, p < .01; therefore, the null hypothesis is
rejected.
coefficient of determination score of .80 indicates the collective independent variable
scores can explain 80% of the variation in the technology improvement values. The
The significance score of .003 indicates a high level of confidence that the collective
independent variables do correlate with the dependent variable related to technology;
The independent variable of supplier development engineers’ level of support
showed a high correlation to the dependent variable of level of success related to
technology. Factors that showed a medium level of correlation with supplier development
results in the area of technology included level of information exchange, level of supplier
participation, and level of leadership attitude. Level of understanding of goals showed a
low level of correlation to supplier development results in the area of technology. The
level of supplier dependence on the buying firm showed no statistical discernable level of
correlation with supplier development results in the area of quality, delivery, cost, and
technology.
151
Summary
Table 18 is a summary of the direction and strength of correlation for each of the
areas of dependent variables of quality, delivery, cost, and technology related to the
independent variables of (a) information exchange, (b) understanding of goals, (c) level
of supplier participation, (d) supplier leadership attitude, (e) buyer firm’s coordinator
presence, (f) supplier dependence on buying firm, and (g) the collective relationships.
Table 18
Summary Table Showing the Correlation Results of Direction for Strength and Direction
in Relation to the Studied Independent Variables
Dependent variables
Quality Delivery Cost Technology
Independent variables D S D S D S D S
Information exchange + Medium + Medium + Medium + Medium
Understanding of goals NA NA + Medium NA NA NA NA
Supplier participation NA NA + Medium - Low + Medium
Leadership attitude NA NA + High + Medium + Medium
Supplier development NA NA + Medium + Medium + High
coordinator presence
Supplier dependence NA NA NA NA NA NA NA NA
Collective variables Low Low Low Medium

Note. D, direction; S, strength; +, positive; -, negative; NA, not applicable.
The data on the independent variable of level of information exchange were found
statistically to have a significant relationship with results from supplier development
activities in the areas of quality, delivery, cost, and technology. The research results on
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the factors of level of understanding of goals and supplier’s leadership attitude were
found statistically to have a significant relationship with supplier development results in
the areas of delivery but not in the area of quality, cost, and technology. The statistics on
the suppliers’ level of participation showed mixed results with a significant positive
correlation with supplier development results focused on delivery and technology, a
statistically negative relationship with supplier development activities focused on cost,
and no statistical significance with activities focused on quality. The data on the level of
supplier development coordinator’s presence and participation showed a significant
relationship with supplier development activities focused on delivery, cost, and
technology. The research finding on the independent variable of supplier dependence on
the buying firm was showed no statistically significant relationship with supplier
development results focused on quality, delivery, cost, and technology. The research
indicated that collectively the independent variables showed a slight to good relationship
with the dependent variables of supplier development outcome. Chapter 5 contains an
overview of the research, the limitations of the research, future research opportunities,
and concluding comments.

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CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS
The purpose of the quantitative research study was to analyze the relationship
between the independent variables of (a) information exchange, (b) understanding of
goals, (c) supplier participation, (d) supplier leadership attitude, (e) buyer firm’s
coordinator presence, and (f) supplier dependence on buying firm and the dependent
variable of supplier development results in quality, delivery, cost, and technology
advancement. The variables were studied independently and collectively. The result of
the study expands the body of knowledge on supply chain management and augments
past research by analyzing variables from the perspective of a buying firm. A lack of
understanding of the variables that contribute to successful supplier development efforts
may impede firms’ ability to utilize invested resources effectively to meet customer
requirements. Research in the area of supplier development may provide supply chain
professionals the knowledge to improve results. This chapter contains the conclusion of
the research.
Overview of the Research
This section provides an overview of the study and contains a review of the
methodology, research questions, and outcomes of the hypotheses. The study involved a
quantitative analysis to identify and test the relative importance and direction of key
factors believed to have a relationship to results generated through supplier development
projects in the areas of quality, delivery, cost, and technology. For this research, supplier
development involved the “transfer of resources for the purpose of improving the
suppliers’ performance and capabilities” (Easton, 2000, p. 2). Based on this definition,
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supplier development includes any activity or resource the buying firm deploys to
improve the performance of suppliers.
Factors that were potentially important for organizations to focus on to produce
satisfactory results from supplier development activities were identified through an
investigation of supplier development literature. Supported by the literature, a model of
important factors contributing to successful supplier development results was constructed
and shown in Figure 3. To examine the model, data were collected from one large
automotive supplier that has been practicing supplier development activities for over 5
years. Data were collected through the use of a self-administered survey instrument with
some data mining.
A survey instrument was appropriate for the research because the analysis
required data from supplier development engineers related to projects that have been
completed to test the research questions and hypotheses. A test of the survey instrument
helped to ensure the research would produce valid and reliable results. The strategy of
conducting premeetings with the supplier development engineers prior to survey
completion allowed participants to understand the nature of the research. The strategy
proved effective, resulting in 29 of the 42 supply chain professionals, or 82%, completing
one or more survey instrument to be included in the research. Supply chain professionals
completed a survey instrument for projects completed between January 2005 and
February 2008. Seventy-five acceptable surveys were returned for analysis from the 42
supply chain professionals. The approach appears to have been successful for executing
the research project. Table 19 displays the research questions resulting from the literature
review and model used for the study.

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Table 19
Summary Table Showing Research Questions
Number Research question
1 What relationship does the suppliers’ level of information exchange have with
the outcome achieved from a supplier development activity?
2 What relationship does the suppliers’ level of understanding of the goals have
with the outcome achieved from a supplier development activity?
3 What relationship does the suppliers’ level of participation have with the
4 What relationship does the suppliers’ leadership attitude have with the
5 What relationship does the buying firm’s level of presence of a coordinator
6 What relationship does the suppliers’ level of dependence based on
percentage of the suppliers’ sales revenue to the buying firm have with the
7 What relationship do the level of (a) information exchange, (b) understanding
of goals, (c) participation, (d) leadership attitude, (e) buying firm’s
coordinator presence, and (f) supplier dependence on buying firm collectively
have with the outcome achieved from the supplier development activity?
The research questions addressed the relationship of (a) information exchange, (b)
buyer firm’s coordinator presence, and (f) supplier dependence on buying firm
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individually with the outcome individually and collectively achieved from supplier
development activity focused on quality, delivery, cost, and technology. In the following
pages, the research results are evaluated in the context of the literature. A summary of the
results of the hypotheses tests for the variables in the research model is also provided.
Correlation of Supplier Development Results With the Level of Information Exchange
Hypothesis 1 addressed the relationship of the level of information exchange with
the results achieved from supplier development projects. Information exchange was
selected due to the number of authors advocating its importance in successful supplier
development results (Burt et al., 2003; Dunn & Young, 2004; Elmuti, 2002; Monczka et
al., 2002; Sanchez-Rodriguez et al., 2005). Burton (2000) defined information exchange
as the “relaying of business-related information in a way that enables the recipient to take
action” (p. 134). The results of the research show a medium level of positive correlation
with supplier development results between suppliers’ information exchange and the
results of supplier development projects in the area of quality, delivery, cost, and
technology. The results from the t-test indicated information exchange showed
statistically a significant relationship to the results achieved from supplier development
activities focused on quality, delivery, cost, and technology. Table 20 provides a
summary of the results.

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Table 20
Summary Table of Hypothesis H1
Hypothesis Area of Support Explanation of results
focus
H10: There is no relationship Quality, Rejected Null hypothesis
between the suppliers’ levels of delivery, rejected based on
information exchange and the cost, and probability values <
supplier development outcome in the technology .05.
areas of quality, delivery, cost, and
technology.
H1a: Higher levels of supplying firm Quality, Accepted Selling firms’
information exchange will result in delivery, information exchange
higher levels of supplier cost, and positively correlates to
development outcome related to technology successful supplier
quality, delivery, cost, and development results.
technology. Strength shown to be
medium.
Correlation of Supplier Development Results With the Level of Suppliers’ Understanding
of Goals
Understanding of goals was selected as a variable for the research due to the
processes (Krause & Scannell, 2002; Sako, 2004; Sanchez-Rodriguez et al., 2006). Goals
establish organizational priorities and represent the foundation of how resources are
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allocated (Lindsey, 1989). Lindsey wrote, “There must be both organizational and
individual commitment to the strategy and the goals that derive from the strategy” (p. 9).
The results (see Table 21) from the t-test indicated understanding of goals showed
activities focused on delivery. The t-test did not support there was statistically a
significant relationship between understanding of goals and results achieved from
supplier development activities focused quality, cost, and technology.
Table 21
focus
H20: There is no relationship Quality, Not Null hypothesis not rejected
between the suppliers’ levels of cost, and Rejected based on probability value >
understanding of the goals and technology .05.
the supplier development Null hypothesis rejected
outcome in the areas of quality, Delivery Rejected based on probability value <
delivery, cost, and technology. .05.
H2a: Higher levels of the Delivery Accepted Correlation coefficient
suppliers’ understanding of the values supports the
goals will result in higher levels Cost, Rejected hypothesis for delivery and
of supplier development delivery, quality but not for cost and
outcome in the areas of quality, and technology based on
delivery, cost, and technology. technology probability values of > .05.

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Correlation of Supplier Development Results With the Level of Participation of the
Supplier Organization
Understanding of level of supplier participation by the selling firm was selected as
a variable for the research due to the numerous authors advocating its importance in
successful supplier development processes (Burt et al., 2003; Krause, 1995; Monczka et
al., 2002). “Resource allocation clearly testifies to people throughout the organization,
that the goal is important and that the senior manager is serious about it” (Lindsey, 1989,
p. 211). Lindsey noted that resource allocation to specific strategies communicates to
others within the firm where priorities have been positioned and conveys authority,
power, and status. The results (see Table 22) of the research show a medium level of
positive correlation between suppliers’ understanding of goals and the results from
supplier development projects in the area of delivery. The data indicated the level of
participation may have a negative impact on the level of cost improvement for supplier
development projects. An examination of the scatter plot diagram showed that the
approach of correlation analysis of forcing data into a linear line may cause this
conclusion to be suspect. Results from the t-test indicated level of supplier participation
showed statistically a significant relationship to the results achieved from supplier
development activities focused on delivery, cost, and technology. The t-test did not
support there was statistically a significant relationship between level of supplier
participation and results achieved from supplier development activities focused quality.
The t-test showed statistically a negative relationship between level of participation and
results achieved from supplier development activities focused on cost.

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Table 22
Hypothesis Area of focus Support Explanation of results
H30: There is no relationship Quality Not rejected Null hypothesis could not be
with the suppliers’ level of rejected based on probability
participation and the supplier value > .05.
development outcome in the Delivery Rejected Null hypothesis rejected based
areas of quality, delivery, Cost Rejected on probability values < .05 for
cost, and technology. Technology Rejected projects focused on delivery,
and technology. Cost showed a
negative correlation.
H3a: Higher levels of Quality Rejected Hypothesis rejected based on
suppliers’ participation will correlation coefficient. Cost

Cost Rejected
result in higher levels of showed a negative correlation
supplier development resulting in a rejection of the
outcome in the areas of hypothesis.
quality, delivery, cost, and Delivery Accepted Correlation coefficient values
technology. Technology Accepted support the hypothesis for
delivery, and technology.
Correlation of Supplier Development Results With the Level Suppliers’ Leadership
Attitude
supplier development activity may have an impact on the level of results achieved.
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Research into this factor may provide insight into what pre-requirements may be
necessary to initiate a supplier development process. “Overwhelmingly, the interviewed
managers emphasized that ‘real’ SCM cannot deliver exceptional value without the
highest levels of managerial commitment both within their companies as well as up and
down the supply chain” (Fawcett et al., 2006, p. 24). This new breed of leadership is
tasked with being able to influence and inspire followers with a clearly articulated vision
of new goal achievement (Leonard, 2003). Hartley and Choi (1996) noted organizations
that cooperatively participate in a supplier development activity may achieve greater
results as opposed to suppliers who are coerced into the activity. Easton (2000) conducted
empirical research in which 86 suppliers were analyzed and indicated that the more
positive the attitude by the supplier’s leadership was, the more supplier capability
improvement occurred. The results (see Table 23) from the t-test indicated level of
suppliers’ leadership attitude showed statistically a significant relationship to the results
achieved from supplier development activities focused on delivery, cost, and technology.
The t-test did not support there was statistically a significant relationship between level of
suppliers’ leadership attitude and results achieved from supplier development activities
focused quality.
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Table 23
Hypothesis Area of focus Support Explanation of results
H40: There is no relationship Quality Not Null hypothesis could not be
with the level of suppliers’ rejected rejected based on probability
leadership attitude and the values > .05.
supplier development outcome Cost, Rejected Null hypothesis rejected based
in the areas of quality, Delivery on probability values < .05 for
delivery, cost, and technology. Technology projects focused on cost,
delivery, and technology.
H4a: Higher levels of the Quality Rejected Hypothesis rejected based on
suppliers’ leadership attitude correlation coefficient.
will result in higher levels of Delivery Accepted Correlation coefficient values
supplier development outcome Cost support the hypothesis for
related to quality, delivery, Technology delivery but not for delivery,
cost, and technology. cost, and technology.
The research results did not show statistically a significant relationship between
suppliers’ level of participation and the results from supplier development projects in the
area of cost.
Correlation of Supplier Development Results With the Level of Assignment of Supplier
Development Coordinator
Understanding of level of coordinator’s presence was selected as a variable for the
research due to the numerous authors advocating its importance in successful supplier
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development processes (Burt et al., 2003, Easton, 2000; Monczka et al., 2002; Trent,
2004; Wagner, 2003). Based on a review of literature, Wagner (2003) asserted supplier
participation in buying firms may lead to lowering cost, improved quality, and reduced
developmental cost. Monczka et al., in the process map for supplier development,
emphasized the importance of reaching agreement on the key project and securing the
joint resources to execute. Easton (2000) noted from research the importance of
appointing a champion for supplier development activities. Research indicates when
management follow-up and oversight is high, organizations have a higher understanding
of the goals of the supplier development activity (Easton). The results (see Table 24)
from the t-test indicated level of assignment of supplier development coordinator showed
activities focused on delivery, cost, and technology. The t-test did not support there was
statistically a significant relationship between level of assignment of supplier
development coordinator and results achieved from supplier development activities
focused quality.
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Table 24
focus
H50: There is no relationship with Delivery, Rejected Null hypothesis not
the level of assignment of a cost, and supported based on
development coordinator from the technology probability values <. 05.
buying firm and the supplier
development outcome in the areas Null hypothesis could not be
of quality, delivery, cost, and Quality Not rejected based on probability
technology. rejected value >.05
H5a: Higher levels of assignment Delivery, Accepted The results indicate a
of a supplier development cost, and medium level of correlation
coordinator by the buying firm technology for delivery and cost, and a
will result in higher levels of high for technology.
supplier development outcome in Rejected based on p value
the areas of quality, delivery, cost, Quality Rejected >.05.
and technology.
Correlation of Supplier Development Results With the Level of Suppliers’ Dependence on
Buying Firm
Easton (2000) posited based on empirical research that there is a positive
relationship between the dependency level of the supplier on the customer firm and the
actual execution of the knowledge learned through supplier development activities.

165
McHugh et al. (2003) noted organizations may want to diversify the customer base to
avoid the domination. The research showed that coercive power may also be applied in a
manner that provides a supportive outcome to the supplier development project (Bates &
Hollingsworth, 2004). The results (see Table 25) from the t-test did not support there was
statistically a significant relationship between level of suppliers’ dependence on buying
firm and results achieved from supplier development activities focused quality, delivery,
cost, and technology. The results indicate that dependency may not be as significant to
supplier development results as suggested from past research.
Correlation of Supplier Development Results With the Level of the Collective Variables
Identified in Hypotheses 1-6
The analysis of data indicates statistically there is a relationship collectively
between all independent factors and the dependent variables. Table 26 presents a
summary of the findings from the research.

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Table 25
Area of
Hypothesis focus Support Explanation of results
H60: There is no relationship Quality Not rejected
with the suppliers’ level of Null hypothesis not
dependence on the buying firm rejected based on
(based on sales percentage of Delivery Not rejected probability value > .05.
revenue sold to buying firm) Cost Not rejected
and the supplier development Technology Not rejected
outcome in the areas of quality,
delivery, cost, and technology.
H6a: Higher levels of Quality Rejected Rejected based on p
dependence on the buying firm Delivery Rejected value >.05.
(based on sales percentage of Cost Rejected
revenue sold to buying firm) to Technology Rejected
the buying firm will result in
higher level of supplier
development outcome in the
areas of quality, delivery, cost,
and technology.
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Table 26
Hypothesis Support Explanation of results
H70: There is no collective relationship with the Rejected Null hypothesis was
level of (a) information exchange, (b) rejected based on p
understanding of goals, (c) supplier participation, value < .02.
(d) leadership attitude, (e) buying firm’s
coordinator presence, and (f) suppliers’
dependence on buying firm and the supplier
development outcome in the areas of quality,
H7a: Higher collective levels of (a) information Accepted Based on the values of
exchange, (b) understanding of goals, (c) supplier the coefficient of
participation, (d) leadership attitude, (e) buying determination and
firm’s coordinator presence, and (f) suppliers’ significance, there is a
dependence on buying firm will result in a higher collective relationship.
supplier development outcome in the areas of
In addition to the results of the research, the finding shows that supplier
development activities support the organization by achieving improvements in the areas
of quality, delivery, cost, and technology. In the area of quality, the supplier development
activities resulted in a 48% improvement in first-time quality at the suppliers’
manufacturing location. With the industry demands for perfect quality, this type of
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improvement supports the value proposition provided to the customer. In the area of
delivery, 22 of the 27 supplier development activities resulted in a significant
improvement in delivery performance. Improvements through supplier development
practices allow the organization to focus on fewer suppliers for re-sourcing activities.
Improved delivery performance often can result in lowering inventory needs, which could
have a positive impact on cash flow. In the area of cost reduction, the 35 supplier
development projects reported an average savings of 9%. The savings may be passed on
to the customer or used to offset increasing commodity price pressure. Finally, in the area
of technology, supplier development projects resulted in 13 of the 18 projects producing
excellent results and 4 of the remaining 5 projects producing nominal results. Many of
the projects produced significant savings for the organization. The overall results show
the benefits of having an effective supplier development program.
Implications of the Study for Theory and Practice
The findings of the study indicate that supply management organizations may be
capable of achieving significant improvements from supplier development programs. The
research also indicates that the independent variables of information exchange and buyer
firm’s coordinator presence have a positive relationship with the dependent variables of
supplier development results in quality, delivery, cost, and technology. The study
indicates the importance of information exchange and supplier development engineers’
presence at the supplier location to achieve acceptable results from supplier development
activities. The suppliers’ level of participation and leadership attitude was shown to be
important with supplier development projects focused on delivery, cost, and technology
improvements. Suppliers’ level of understanding of goals showed a positive relationship

169
with projects focused on delivery improvement. When delivery of product is in jeopardy,
the first task tends to be to obtain a clear understanding of where the organization is at
with shipments and what is required. It is not surprising that obtaining a clear
understanding of the goals would be particularly important when there is a delivery issue.
Suppliers’ dependence on the buying firm was not shown to have a positive relationship
with results from supplier development projects.
Perhaps the most significant finding of the research for supply chain professionals
is that buying firms cannot focus on only one factor to drive improvements from supplier
development practices. The factors were generally shown to have medium to low
correlation with the results achieved from the supplier development projects.
Collectively, the factors were shown to have a relationship to the supplier development
results. Thus, supply chain professionals who have a process that focuses collectively on
these factors may produce results that improve their value propositions to the customer.
This is supported in the literature review by past research. Krause and Ellram (1997)
identified top leadership support, cross-functional effort, and effective communications
as important antecedent variables to successful supplier development results. Easton
(2000) identified extensive supplier support as a significant factor related to supplier
development results. Information exchange and effective communication was identified
as an important factor related to supplier development results (Forker & Mendez, 2001;
Krause et al., 2000; Narasimhan et al., 2001). The research supports the results from past
research and augments the findings by providing data that support or reject the
importance of the factors with supplier development projects focused on quality,

170
The findings support key suggested supplier development steps identified by
Handfield et al. (2000) such as (a) form cross-functional teams, (b) meet with suppliers’
top leadership, (c) identify key projects, (d) define details of agreement, and (e) monitor
status and monitor strategies. These steps promote information exchange, encourage
understanding of goals, ensure proper participation, solicit leadership support prior to
starting a project, and ensure the buying firm can support the project. The research
findings show these steps to be important and have a positive correlation with successful
supplier development results. Although the factors in the research offer some explanation
for positive supplier development results, the data indicate there are others not identified
in this research.
Firms developing supplier development processes would be well served in
identifying standard work that takes into account factors such as supplier leadership
support, information exchange, level of supplier participation, monitoring supplier’s
leadership attitude, and level of support. As an example, standard work that requires a
project kick-off meeting with the supplier’s top leadership to ensure buy-in is one method
to gain support to ensure the proper focus for success. This activity allows the
organization to focus on several of the factors researched. The meeting can consist of
information sharing and discussions to collectively understand the goals, acquire the right
level of participation, and assess the suppliers’ leadership attitude for the project. Follow-
up sessions to check on the progress of a project and validating that the right resources
are being applied appear to be important in achieving the desired results from supplier
development projects. The research showed a negative correlation between supplier
development results focused on cost reduction and level of participation by the supplier.
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This may suggest that cost reduction discussions should be executed with a minimal
number of participants. Based on this research, organizations that create standard work to
execute projects that include a focus on information exchange, participation, and ensuring
proper resources are in place to support the supplier development process may be more
successful.
Recommendations for Organizations
Leaders of organizations should understand factors that contribute to the
successful results of supplier development approaches. Improvements in the area of
quality, delivery, cost, and technology can be achieved through successful utilization of
supplier development resources. Organizations dissatisfied with the performance of their
supplier base may be well served to establish a supplier development program. The
improvements generated can help improve the organization’s competitive position. The
results seen in the current research with an average of 48% first-time quality
improvement, 9% cost-reduction improvement, significant delivery, and technology
improvement provide additional support for the position that an effective supplier
development program can allow an organization to achieve improvements in suppliers’
performance.
When considering developing a supplier development program, organizations
should include elements such as those suggested by Handfield et al. (2000), such as
ensuring the supplier’s leadership is in support of a project prior to starting, forming
cross-functional teams with appropriate members, allowing information to be shared
freely, and ensuring proper resources are in place to support the project. Processes that
allow supplier development engineers to respect confidential information to allow the

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free exchange of information should also be considered. Additional tools such as cost
modeling, where the supply chain professional can estimate cost, may be effective
methods to address where information related to cost is restricted by the supplier
organization (Zsidisin, Ellram, & Ogden, 2003). Finally, the research indicates that a
supplier development program requires a comprehensive approach where several factors
are incorporated into the process.
Limitations of the Research
The current research, like all research, has limitations to consider. First, the
research focused on six factors shown to be of importance for organizations to consider in
relationship to supplier development results. Many factors were not considered in the
research. The bias toward these factors may have resulted in not identifying factors that
are important to achieving supplier development results. Second, the research method did
not provide data on the interaction of the variables. In addition, many of the supplier
development projects had multiple focuses (quality, delivery, technology, and cost),
resulting in interactions based on the focus that was not considered.
Third, the population came from a single large automotive supplier. The limited
participation resulted in statistical confidence levels of 90% and +/- 10% precision.
Therefore, the results need to be verified through additional research on a larger
population. The impact of the limited sample size should be considered when evaluating
the results of this research. Fourth, the research did not consider factors from a supplying
firm’s perspective.
Fifth, the study involved the evaluation of factors based on a model that did not
consider the buying firm’s size, the supplier firm’s size, and sector of business. The
173
current research is from a single large automotive supplier’s perspective. Factors such as
type of customer (service vs. manufacturing), size of customer, and size of supplier may
offer additional insight. Researchers should consider these limitations when constructing
future research models.
Sixth, the research used a survey specifically developed and used for the first
time. In administering the survey, the researcher determined that an introductory meeting
(conference call) was necessary to explain the intent of the research and survey
instrument. The survey tool may require improvements to be executed over a wider
audience. To avoid the introductory meetings, the survey may also require improvements
in the structure. The survey may also require modifications to the dependent variables for
the industry being studied.
Although every effort was made to ensure only qualified supplier development
engineers or supply chain professionals completed the survey that possessed knowledge
of the results of the project, survey results were self-reported. The self-reported measures
may be over- or understated due to the influences of attitude, values, and social
experiences (Kemppila & Lonnqvist, 2003). More effective analysis may provide
additional insight.
Future Research Opportunities
Based on the findings and conclusions of the research, the following
recommendations are offered by the researcher. First, researchers should continue to
evaluate other organizations and industries to determine if the conclusions are consistent.
By evaluating the finding with other industries, the conclusions may be further supported
or determined not to be consistent. Second, if research could be conducted from the start
174
to the finish of a project, additional factors such as supplier’s trust in the customer firm
could be understood, which may provide insight into the causal nature of the factors. By
following projects from start to finish, researchers could obtain real-time results, which
would eliminate the need for survey respondents to rely on archived data and memory for
the survey answers.
Third, future researchers should continue to evaluate other factors believed to
influence supplier development results. There have been numerous studies related to
supplier development. Additional factors could be applied to the research model and
tested. For example, 50% of the participants noted that cost information was not openly
shared by suppliers with the customer firm in projects focused on cost improvements.
This factor may be important and require further investigation. Trust may have
implications to other areas in supply chain management that were not the focus of this
research but that may be of interest. For example, it is not known if a lack of trust causes
suppliers to increase the price when quoting new business. Volumes not materializing,
programs that are delayed, and lack of information sharing may cause investment that
does not allow adequate return, causing suppliers to increase prices when being quoted.
There may be a relationship worth exploring.
Fourth, researchers could explore other measurement goal constructs that may
offer improved reliability and validity. Dependent variables such as parts-per-million
returns, cost of quality, actual savings received by buying firm, and others may provide
more insight. Reviewing past research may offer improved constructs not considered in
the current research.

175
Fifth, as more organizations organize supplier development approaches, research
could be conducted on the strategy of intent in developing suppliers, such as the
foundation of philosophy behind the decisions on how supplier development is applied.
Liker and Choi (2004) defined a supplier-partnering hierarchy when selecting suppliers
for development. Qualitative research in comparing organizations may provide supply
chain leaders greater understanding to obtain greater benefits from the supplier
development focus. The research may also provide knowledge to address the issue of
building trust with suppliers.
Finally, there appears to be no question that supplier development activities
produce results. The current research showed significant improvement occurred as a
result of the supplier development activities, such as an average of 48% improvement in
first-time quality, improved performance in suppliers shipping on time, 9% cost
reduction, and technology improvements. The following question may require additional
research: How does an organization configure a supplier development approach that
brings a strategic advantage to the organization? If supplier development is used only as a
defensive measure to deal with problems such as commodity pressure, current quality, or
delivery issues, then how does it develop suppliers to be eager to help transform the
organization they serve? Liker and Choi (2004) provided some insight into the following
questions: How does an organization react when faced with a potential supplier increase?
Is the philosophical position to reject the increase and start global sourcing activities to
find an alternative supplier or is it to investigate and understand the suppliers’ problem
and look for solutions? Does one approach lead to a competitive advantage with the
supply base? What constructs are important to base the supplier development effort
176
around? Should firms embrace the need for both the buying firm and suppliers to be
profitable? Would such a construct develop a higher level of trust? Would it allow buying
firms to build longer term relationships where there are advantages to both the buying
firm and the supplier? The researcher strongly believes selected suppliers can offer a
strategic advantage if nurtured through supplier development efforts.
Concluding Comments
To optimize the outcome generated through supplier development programs,
leadership must ensure there is a focus on factors that contribute to successful results.
The current study contains results that support case study research conducted in the past
by Krause and Ellram (1997). The current study presented data that indicate the
importance of information exchange, supplier participation, supplier leadership attitude,
and buyer firm’s coordinator presence with a comprehensive approach utilizing all
factors to achieve acceptable supplier development results. In a competitive market,
organizations need capable suppliers to support the needs of their value propositions. The
rationale for supplier development is well documented in literature and supported in the
current research. With purchase parts representing an estimated 50 to 60% of the cost of
sales in the United States, organizations should place importance on driving
improvements at supplier locations. Supplier development is a strategic approach to
execute improvements to achieve desired results.

177
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188
APPENDIX A: PERMISSION TO USE PREMISES, NAME, AND/OR SUBJECT
OF FACILITY, ORGANIZATION, UNIVERSITY INSTITUTION OR
ASSOCIATION
June 7, 2007
Delphi Corporation
Attn: Sidney Johnson, Vice President, Global Supply Management
Mr. Johnson
I am a student at the University of Phoenix working on a Doctor of Management in

Organizational Leadership with a plan to execute a research project related to supplier
development. The purpose of the research is to explore factors that may contribute to
successful supplier development results. I am requesting permission to interview Supplier
Development Managers to review data on past supplier development projects to verify
results documented in the supplier development database and identify project leaders.
The supplier development project leaders would be requested to fill out a survey to provide
information related to the factors being studied. The survey will take approximately 20
minutes to complete. The findings of this study will be published but will not contain names
of participants.
There is no risk or direct benefits to individuals participating in this research project.

However, this research may provide valuable insight and information to improve supplier
development results. The field of supply chain management may benefit from the findings of
this research.
If you approve this request, please sign and date this letter on the line below.
Respectfully,
John Novak
Doctor of Management, Candidate
Adress
Approved:________________________________
Date:________________
Printed Name: Sidney Johnson
Position: Vice President, Global Supply Management

189
The permission form has been signed and dated. The organization and approval name is
blacked out for confidentiality purposes. The signed and dated form is available if legally
necessary.
190
APPENDIX B: INFORMED CONSENT, PARTICIPANT 18 YEARS OF AGE AND
OLDER
Dear,
Thank you for your interest in my dissertation research that will be conducted to fulfill the partial
requirement of the University of Phoenix’s Doctor of Management in Organizational Leadership
degree. I value your contribution to my research project and look forward to your participation.
My study is entitled “Correlational Study of Organizational Factors that Influence Supplier
Development: A Buyers Firm’s Perspective”. The purpose of the study is to investigate factors
that may correlate to successful supplier development results in the area of quality, cost, delivery,
and technology. Your contribution will be to validate results from a data base search and to
identify supplier development leaders that will be identified to complete a survey for this research
project.
The research model I am using is a quantitative approach to investigate the relationship between
the independent variables of (a) information exchange, (b) understanding of goals, (c) supplier
dependence on buying firm and the dependent variable of supplier development results in quality,
delivery, cost, and/or technology advancement. Through your participation I hope to gain an
understanding of how the factors relate to supplier development results. During a 1 to 1-1/2 hour
in-person sessions I will verify results achieved in the past three years of supplier development
activities and seek to identify the leader of each project for survey participation.
Your participation in this study is voluntary. If you choose not to participate or withdraw from the
study at any time, you can do so without penalty or loss of benefit to yourself. The research may
be published but your name will not be used and your results will be maintained in confidence.
There is no risk or direct benefits to individuals participating in this research project. However,
this research may provide valuable insight and information to improve supplier development
results. The field of supply chain management may benefit from the findings of this research.
I value your participation and thank you for your contribution to this research project. If there are
any questions or comments feel free to call me at xxx-xxx-xxxx or xxx-xxx-xxxx in the evening.
There are no other agreements, written or verbal, related to this study beyond that expressed in
this consent and confidentially form. I, the undersigned, understand the above explanation, and I
give consent to my voluntary participation in this study.
By signing this form I acknowledge that I understand the nature of the study, the potential risks to
me as a participant, and the means by which my identity will be kept confidential. My signature
on this form also indicates that I am not a member of any protected category of participants
(minor, pregnant women when considered part of a designated research group of women, prisoner
or cognitively impaired) and that I give permission to voluntarily serve as a participant in the
study described.
_____________________________________________ ______________________
Signature of Interviewee Date
______________________________________________ ______________________
John Novak Date
191
APPENDIX C: PRE-NOTIFICATION SURVEY LETTER
Date
<< Name>>
<<Street>>
<<City>>
<<Customer Organization>>
Dear <<Buyer Representative (name)>>
Company X in conjunction with John Novak is conducting a research project that examines
factors in relation to supplier development results. The survey is being conducted by Company X
and John Novak because of their interest in the advancement of supply management practices. I
believe the results will be helpful to our organization because it may give guidance to Company
X on how to improve its supplier development practices. I strongly request you to participate in
this study and to fill out a questionnaire that will be sent to you within the next Five days.
It should take no longer than 30 minutes to complete. A summary of the results will be shared
with you if you attach a business card with the completed survey. I want to emphasize the
following points:
¾ The research project is being conducted for academic purposes (the survey is part of John
Novak’s doctoral dissertation);
¾ Participation is strictly voluntary. If you chose not to participate you can do so without
penalty or loss of benefit to yourself.
¾ Data will only be provided to Company X in summary form. No individual data will be
released. A third party survey representative will be utilized to ensure confidentiality of
individual information;
¾ The survey has no right or wrong answers and no hidden agendas
I would be grateful to you for completing the questionnaire and returning it immediately. Thank
you for your contribution to this very important research.
Sincerely,
John Novak
192
APPENDIX D: INFORMED CONSENT, PARTICIPANT 18 YEARS OF AGE AND
OLDER (SURVEY)
Dear,
Thank you for your interest in my dissertation research that will be conducted to fulfill the partial
requirement of the University of Phoenix’s Doctor of Management in Organizational Leadership
degree. I value your contribution to my research project and look forward to your participation.
My study is entitled “Correlational Study of Organizational Factors that Influence Supplier
Development: A Buyers Firm’s Perspective”. The purpose of the study is to investigate factors
that may correlate to successful supplier development results in the area of quality, cost, delivery,
and technology.
The research model I am using is a quantitative approach to investigate the relationship between
the independent variables of (a) information exchange, (b) understanding of goals, (c) supplier
dependence on buying firm and the dependent variable of supplier development results in quality,
delivery, cost, and/or technology advancement. Through your participation I hope to gain an
understanding of how the factors relate to supplier development results. The attached survey
should take no longer than 30 minutes to complete. I strongly request your participation in this
study by completing the attached survey.
Your participation in this study is voluntary. If you choose not to participate or withdraw from the
study at any time, you can do so without penalty or loss of benefit to yourself. The research may
be published but your name will not be used and your results will be maintained in confidence.
There is no risk or direct benefits to individuals participating in this research project. However,
this research may provide valuable insight and information to improve supplier development
results. The field of supply chain management may benefit from the findings of this research.
I value your participation and thank you for your contribution to this research project. If there are
any questions or comments feel free to call me at xxx-xxx-xxxx or xxx-xxx-xxxx in the evening.
There are no other agreements, written or verbal, related to this study beyond that expressed in
this consent and confidentially form. I, the undersigned, understand the above explanation, and I
give consent to my voluntary participation in this study.
By electronically signing this form I acknowledge that I understand the nature of the study, the
potential risks to me as a participant, and the means by which my identity will be kept
confidential. My electronic signature on this form also indicates that I am not a member of any
protected category of participants (minor, pregnant women when considered part of a designated
research group of women, prisoner, or cognitively impaired) and that I give permission to
voluntarily serve as a participant in the study described.
John Novak
Doctor of Management, Candidate
_____________________________________________ Date:_____________________
Participants Name: Type in name to acknowledge acceptance to participate in research
Must be electronically signed and dated prior to filling out the survey
193
APPENDIX E: SUPPLIER DEVELOPMENT SURVEY
To be filled out based on data mining and supplier development manager/procurement

professional interviews:
Section 1.
Supplier Name:
Supplier Development Project:
All questions below pertain to your relationship with this supplier as it pertains to the
supplier development project. In response to the survey questions, please consider only the
supplier development project named above. Section 1 was filled out prior to the survey based on
data in files collected on the supplier development project and other data bases available.
1. Focus of supplier development project: Quality, Delivery, Cost, Technology
2. Procurement professional assigned to supplier development project:
3. Category of purchased parts supplied by firm:
4. Annual Supplier sales revenue: Less than $500,000

>$500,000 - <$1,000,000
>$1,000,000 - <$5,000,000
>$5,000,000 - <$10,000,000
>$10,000,000 - <$50,000,000
>$50,000,000 - <$100,000,000
>$100,000,000 - <$500,000,000
>$500,000,000
5. Region of manufacturing location: North America, Asia Pacific, Europe, South America
6. Results of supplier development Project:
A. Quality: _ % of first time quality improved
B. Cost: __ % of annual purchase value saved
C. Technology Development
The results of the Technology Development project were . . . :

0 – No execution of technology development project
4 - Midpoint
8 – Total success of technology development project
0 1 2 3 4 5 6 7 8
D. Delivery Improvement
The result of the Supplier Development Project was . . .

0- No delivery improvement
4- Midpoint
8- 100% of product shipped on time
0 1 2 3 4 5 6 7 8
7. Date supplier development project completed: _Must be within the past three years.
194
8. Level of supplier dependence on buying firm: % of sales sold to customer firm
Section 2:
You were identified as a procurement professional that led a supplier development
activity.
Supplier Name:
Supplier Development Project:
All questions below pertain to your relationship with this supplier as it pertains to the
supplier development project. In response to the survey questions, please consider only the
supplier development project named above. Section 1 was filled out prior to the survey based on
data in files collected on the supplier development project and other data bases available.
Example question: Read the question and then assign a number that best fist the completion of the sentence.
I read literature about supply chain management . . . (participant selects a number 1-10 representing
the level the person reads supply chain management literature)
0 - Never 4 - Midpoint 8–every day without fail

0 1 2 3 4 5 6 7 8
Start of Survey:
1. Focus of supplier development project: Quality, Delivery, Cost, Technology
2. Procurement professional assigned to supplier development project:
3. Level of buying firm information exchange: Scale 0 - 8
a. The supplier development activity has resulted in the supplier allowing . . . :
0 - No information exchanged 4-Midpoint 8 -All information needed was exchanged

0 1 2 3 4 5 6 7 8
b. When working to resolve an issue the supplier firm . . . :
0 – Allowed no information to be exchanged

4 - Midpoint
8 – Allowed all information needed to be exchanged
0 1 2 3 4 5 6 7 8
c. The results of the customer feedback exchange has been the supplier allowing . . . :
0 – No information exchanged 4-Midpoint 8 – All information needed was exchanged
0 1 2 3 4 5 6 7 8
d. The supplier development activity experienced . . . :

0 – No information exchanged 4-Midpoint 8 – free exchange of information
0 1 2 3 4 5 6 7 8
e. Customer/supplier formal forums resulted in . . . :

0 – No information exchanged 4-Midpoint 8 – All information needed was exchanged
0 1 2 3 4 5 6 7 8
What kind of supplier information was exchanged?

195
What kind of supplier information was not exchanged?
4. Level of understanding of goals: Scale 0 - 8
a) The criteria used to measure the supplier development project resulted in the supplier having . . . :
0-No understanding of the goals 4-Midpoint 8– Complete understanding of the goals
0 1 2 3 4 5 6 7 8
b) Based on pre-work performed prior to the supplier development activity the supplier firm had . . .
0–No understanding of the goals 4-Midpoint 8–Complete understanding of the goals
0 1 2 3 4 5 6 7 8
c) The customer had . . . of what it wanted from the supplier development activity.
0–No understanding 4-Midpoint 8–Complete understanding
0 1 2 3 4 5 6 7 8
What area were the goals identified in?
5. Level of participation by supplier firm:
Sales Purchasing
Product Engineering Material Management
Manufacturing Process engineering
Quality Control Supplier Quality
Other Other
6. Level of suppliers leaderships attitude: Scale 0 - 8
d) When the suppliers was approached the top leadership demonstrated . . . :

0 – No leadership support 4-Midpoint 8–Total leadership support
0 1 2 3 4 5 6 7 8
e) During the execution phase of the supplier development project top leadership demonstrated . . .
0 – No leadership support 4-Midpoint 8–Total leadership support
0 1 2 3 4 5 6 7 8
f) Top leadership demonstrated through involvement . . .

0–No leadership support 4-Midpoint 8–Total leadership support
0 1 2 3 4 5 6 7 8
What level of top leadership was involved in the project?
7. Level of Supplier Development Project Leaders presence was . . . : Scale 0 - 8
g) The supplier coordinator assigned to the program spent . . .

0 – 0% of the time leading the project 4-Midpoint 8–100% of the time leading the project
0 1 2 3 4 5 6 7 8
Are there any additional comments you would like to make in regard to
this research and supplier development?
196
I am grateful to you for completing the questionnaire and sending it in to be

included in the research. Thank you for your contribution to this very important research.
If you would like an executive summary of the results of the research, please
input the information below and a copy will be sent to you:
Name:
Address:
Thank you again for your participation in this research project.
Sincerely,
John Novak
197
APPENDIX F: ANOVA TABLE (QUALITY)
Quality Regression- Dependent Variable
Variables Entered/Removedb
Variables Variables
Model Entered Removed Method
1 V7, V5, V3, V6,

. Enter
V4, V2a
a. All requested variables entered.
b. Dependent Variable: V1
Model Summary
Adjusted R Std. Error of the

Model R R Square Square Estimate
1 .585a .342 .232 25.85736%
a. Predictors: (Constant), V7, V5, V3, V6, V4, V2
ANOVAb
Model Sum of Squares df Mean Square F Sig.
1 Regression 12500.949 6 2083.491 3.116 .015a
Residual
24069.703 36 668.603
Total
36570.651 42
198
Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant)
-20.368 21.428 -.951 .348
V2 16.068 4.952 .741 3.245 .003
V3 -4.111 3.650 -.220 -1.126 .267
V4 3.151 3.000 .195 1.051 .300
V5 -5.942 4.002 -.322 -1.485 .146
V6 .743 2.056 .057 .361 .720
V7 1.343 .968 .192 1.388 .174
a. Dependent Variable: V1
199
APPENDIX G: t-TEST TABLE
t-computed = r / {square
root of [(1-r2)/(n-2)]} Cost Technology Delivery Quality
Info Exchange - r vaules 0.3107 0.4737 0.4502 0.4881
t-values 1.8776 2.1516 2.5207 3.5811
Prob values 0.0347 0.0235 0.0092 0.0004
Und Goals - r vaules 0.2081 0.1916 0.4941 0.2134

t-values 1.2224 0.7809 2.8419 1.3985
Prob values 0.1151 0.2231 0.0044 0.0847
Funct Areas - r vaules -0.2846 0.4092 0.4960 0.1301

t-values -1.7056 1.7936 2.8564 0.8403
Prob values 0.0487 0.0459 0.0043 0.2028
Supplier Att - r vaules 0.3026 0.4105 0.6034 0.1988

t-values 1.8240 1.8007 3.7838 1.2987
Prob values 0.0386 0.0453 0.0004 0.1007
Eng Supp - r vaules 0.4667 0.7252 0.3795 0.2553

t-values 3.0317 6.0509 2.3566 1.5165
Prob values 0.0024 0.0000 0.0133 0.0685
Dep - r vaules 0.0378 0.0799 0.1619 0.2674

t-values 0.2173 0.4607 0.9424 1.5944
Prob values 0.4146 0.3256 0.1775 0.0593
equals significance
200
APPENDIX H: ANOVA TABLE (DELIVERY)
Delivery is the Dependent Variable
Variables Variables
1 V7, V3, V6, V4,

. Enter
V2, V5a
Model Summary

1 .689a .474 .317 1.796
ANOVAb
1 Regression 58.188 6 9.698 3.008 .029a
Residual
64.479 20 3.224
Total
122.667 26
201
Coefficientsa
Standardized
1 (Constant)
.710 1.585 .448 .659
V2 -.333 .376 -.251 -.885 .386
V3 .020 .316 .017 .065 .949
V4 .302 .246 .276 1.227 .234
V5 .639 .433 .517 1.475 .156
V6 .265 .190 .245 1.395 .178
V7 .120 .099 .229 1.214 .239
202
APPENDIX I: ANOVA TABLE (COST)
Regression- Cost as Dependent Variable
Variables Variables
1 V7, V4, V6, V2,

. Enter
V3, V5a
Model Summary

1 .783a .614 .531 6.14515%
ANOVAb
1 Regression 1679.611 6 279.935 7.413 .000a
Residual
1057.361 28 37.763
Total
2736.971 34
203
Coefficientsa
Standardized
1 (Constant)
-7.495 5.336 -1.405 .171
V2 .859 1.315 .125 .653 .519
V3 -.143 1.173 -.023 -.122 .904
V4 -3.204 .632 -.746 -5.072 .000
V5 2.161 1.006 .425 2.148 .040
V6 2.498 .672 .507 3.720 .001
V7 .131 .287 .059 .456 .652
204
APPENDIX J: ANOVA TABLE (TECHNOLOGY)
Regression- Technology Dependent Variable
Variables Variables
1 VAR00007,
VAR00004,
VAR00006,
. Enter
VAR00002,
VAR00003,
VAR00005a
b. Dependent Variable: VAR00001
Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .892a .796 .685 1.21767
a. Predictors: (Constant), VAR00007, VAR00004, VAR00006, VAR00002,

VAR00003, VAR00005
ANOVAb
1 Regression 63.690 6 10.615 7.159 .003a
Residual
16.310 11 1.483
Total
80.000 17
a. Predictors: (Constant), VAR00007, VAR00004, VAR00006, VAR00002, VAR00003, VAR00005
b. Dependent Variable: VAR00001

205
Coefficientsa
Standardized
1 (Constant)
5.395 2.852 1.892 .085
VAR00002 1.383 .570 .793 2.428 .034
VAR00003 -1.077 .647 -.414 -1.664 .124
VAR00004 .569 .194 .458 2.936 .014
VAR00005 -1.266 .989 -.544 -1.279 .227
VAR00006 .904 .218 .732 4.139 .002
VAR00007 .034 .085 .061 .396 .700
a. Dependent Variable: VAR00001

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CORRELATIONAL STUDY OF ORGANIZATIONAL FACTORS THAT

INFLUENCE SUPPLIER DEVELOPMENT: A BUYER FIRM’S PERSPECTIVE

John Charles Novak

A Dissertation Presented in Partial Fulfillment

of the Requirements for the Degree

Doctor of Management in Organizational Leadership

All rights reserved

ALL RIGHTS RESERVED

adequately to organizations expectations. The purpose of this quantitative research study

dependent variable of supplier development results in quality, delivery, cost, and

technology advancement. Forty-two supply chain professionals were survey with 29

responding with survey data related; 43 in quality, 35 in cost, 27 in delivery, and 18 in

technology. The study indicates the importance of information exchange, multifunctional

participation, suppliers’ leadership attitude, and supplier development engineers’

the factors were shown to be significant in relationship to the supplier development

may produce desired results from supplier development projects.

focus on such a challenge.

your contribution to the advancement of supply chain management. I will forever be

invaluable to define the project and evaluate the survey instrument.

LIST OF FIGURES ............................................................................................xii

CHAPTER 1: INTRODUCTION ......................................................................... 1

Background of the Problem .................................................................................. 2

Statement of the Problem...................................................................................... 5

Purpose of the Study ............................................................................................. 6

Significance of the Problem.................................................................................. 7

Nature of the Study ............................................................................................... 8

Independent and Dependent Variables ............................................................... 23

CHAPTER 2: REVIEW OF THE LITERATURE ............................................. 33

Rationale for Supplier Development .................................................................. 34

Supplier Development ................................................................................. 35

Supplier Development Steps........................................................................ 36

Research in Supplier Development..................................................................... 42

Supply Chain Management................................................................................. 50

Information Exchange ................................................................................. 52

Understanding of Goals ............................................................................... 54

Level of Supplier Participation.................................................................... 56

Supplier Leadership Attitude....................................................................... 59

Dependency on Buying Firm....................................................................... 60

CHAPTER 3: METHOD .................................................................................... 66

Appropriateness of Method ......................................................................... 67

Appropriateness of Design .......................................................................... 68

Research Questions and Hypotheses .................................................................. 69

Population and Sampling Frame......................................................................... 72

Informed Consent, Confidentiality, and Data Collection ................................... 74

Data Analysis ...................................................................................................... 76

Validity, Reliability, and Instrumentation .......................................................... 81

Population, Sample Selection, and Demographics ............................................. 94

Data Collection ................................................................................................... 97

Summary of Results Achieved From Supplier Development Projects............... 99

Measurement of Data........................................................................................ 101

Research Questions and Hypotheses ................................................................ 102

Data Analysis of Each Study Variable.............................................................. 105

Testing of Research Questions and Hypotheses ............................................... 108

Quality ....................................................................................................... 109

Delivery ..................................................................................................... 120

Cost ............................................................................................................ 130

Technology ................................................................................................ 141

Summary ........................................................................................................... 151

CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS.................... 153

Overview of the Research................................................................................. 153

Correlation of Supplier Development Results With the Level of Information

Correlation of Supplier Development Results With the Level of Suppliers’

Understanding of Goals ............................................................................. 157