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Management article
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Reference no. 94605
Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 1994
Length: 11 pages

Abstract

Many companies throughout the world, seeking ways to develop products more efficiently, are recasting their relationships with suppliers--often modeling their efforts on approaches used by world-class Japanese manufacturers like Toyota and Nissan. The favored Japanese practices include using fewer suppliers and forging longer-term relationships with them, prodding suppliers to improve continually, and involving suppliers in design and development. But many managers who adopt Japanese-style practices have an incomplete understanding of them and, as a result, may be unable to gain all the benefits Japanese manufacturers enjoy. Successful partnerships depend on the balance among a supplier''s technological capabilities, a customer''s willingness to share information, and both companies'' strategic requirements. Using the Japanese approach as a model, the authors describe four roles that suppliers can play in a long-term cooperative relationship. Each role carries different responsibilities during product development, and the relationships between supplier and customer vary considerably in closeness and intensity.

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Abstract

Many companies throughout the world, seeking ways to develop products more efficiently, are recasting their relationships with suppliers--often modeling their efforts on approaches used by world-class Japanese manufacturers like Toyota and Nissan. The favored Japanese practices include using fewer suppliers and forging longer-term relationships with them, prodding suppliers to improve continually, and involving suppliers in design and development. But many managers who adopt Japanese-style practices have an incomplete understanding of them and, as a result, may be unable to gain all the benefits Japanese manufacturers enjoy. Successful partnerships depend on the balance among a supplier''s technological capabilities, a customer''s willingness to share information, and both companies'' strategic requirements. Using the Japanese approach as a model, the authors describe four roles that suppliers can play in a long-term cooperative relationship. Each role carries different responsibilities during product development, and the relationships between supplier and customer vary considerably in closeness and intensity.

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