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Supplier
integration (SI) can be defined as the management category which is represent
that the activity which are join by supplier among each other by the
traditional performance with the retailer (Lockström et al., 2010). It was also
the main key to the strategy for management to increase the performance of
buyer (Danese, 2013). For these
years, the competitive was keep increasing to forces certain company in rethink
for their strategy of supply chain to cause in decreasing for their costs
production and maintain or become better in customer service in the same time.
For certain industry, the production and supplier was difference in the previous
time. The outsourcing will help industry in increasing the number of
company.  

SI
can create to a faster supply network among the supplier with the structure
network on the performance of buyers. There has evidence with 186 manufacturing
plants was has faster in network structure with the provided by supplier among
each other. Therefore, SI can make the company more efficiency and flexibility
in their network structure. Moreover, they are dependence each other to produce
extra synergic which are influence on the time progress in attainment. The data
was shown that was disclosed about there are dangerous for investing in SI
initiatives. Therefore, SI was would be effect when the structure network of
the company was fail to implement in shorter lead times and schedule of the SI
attainment was be blocked.

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In
other hand, the speed for network structure will be fast when the company are investing
some outside projects. This was a best guideline to guide the manager for those
are know how to control the supplier integration and supply network structure
initiatives will be faster ways in order to increasing the performance.

                                                                                                

1.1 Scope and
Objection

1.0      Literatures
Review of Supply Integration

Supplier
integration (SI) in management is defined as a supplier is participating in the
traditional activity that is fulfilled by resellers. These activities are
helping to make a decision, on which products are going to sell, where to sell,
how much was the price be and make sure the product are deliver on time to the
stores. Based on the situation, the supplier integration may be more or less
appropriate in these activities. SI is become more and more important to
improve the performance for supply chain (Lockström et al., 2010). In recent
year, the interest for SI was been increase. Inside SI has two types of
practices which is internal practices and external practices (Das et al., 2006). It was also
has imperative strategy that can help company to make improvement in their
performance and increase competitive advantage for a company marketplace (Lin, 2009). To get
competitive advantage, every company are creating in innovating by evolution in
solution which are include both of intangible and tangible components (Zhang et al., 2016).

According
to Yeung et al (2009), many of the researches are survey for the trust between
the suppliers (Yeung et al., 2009). Every supplier
is still in largely unknown for the coercive power and trust that influence
between the suppliers. In SI, the comprehensive for the information of supplier
integration activities needed as much as possible. The evidence is based on the
173 industrial companies whose has supplementary interview with the purchasing
executive (Wagner, 2003). The needed for
the collaboration in the team work for SI are strong (SJÖDIN and ERIKSSON, 2010b).

Company
can find out the idea for decreasing the time concept in the customer
development, cost reduction in new product and quality improvement by get
information among the suppliers (Petersen et al., 2003). Japanese
company was use one approach way to make successfully which are including the
supplier materials of integration for the new products. Based on the case
study, there has 17 times of successful in manufacturing from American and
Japanese. The accuracy of information from SI is can help a company to find out
the quality of the product category by sharing information between the
suppliers (Sen et al., 2008).

333

2.1 Innovation

Innovation is a process of turning new knowledge and
ideas into service and products to create a new consumer demand in the
marketplace (Andrew et al., 2010). The focus on
creating a new innovation for a product will bring the company into high-tech
of industries. The empirical of analysis was show that the creating of
innovation is obvious in the mature industries (SJÖDIN and ERIKSSON, 2010a). The innovation
concept can help the company in development or improvement, which are include
process, management, products and services to the new products (He et al., 2014). According to
Cuculelli et al (2016), there has some risky for the product innovation which
is there has uncertain return in commercial (Cucculelli et al., 2016). There are many
research was show there are not 100% guarantee the revenue can get in the
future after the product innovation has been created into the marketplace. The
longer of timescale provided by development, the more risky to overtaken by the
competitor. In additional, product innovation will bring advantage for company
in decreasing the uncertain needs in the market (Johansson and Môllefors, 2013). It can bring
the company to stay in competitive and get the benefit of competitive if the
company can guide the innovation to the right ways. To be successful in
processing innovation, the most important key is ability for the company in
changing environment (Lii and Kuo, 2016). This was mean
that the company should keep evolving that they can have more equipped for the
changing in market. When a company has provided innovation in their products,
every consumer in the market will keep waiting for the product with their
expectation. Besides that, the innovation from SI will cause the whether the
business growth of the company will be improve or decrease. If the innovation
product are dissatisfaction with the consumers what they expect, the business
growth will be decrease.

 288

 

  2.1.1 Product
innovativeness

            The main capability for the innovation is the talent in
producing the innovative products, there has several studies been show the
result that there has a good or positive relationship in financial performance
for the product and the innovative of a product. McNally et al (2010) was been
survey the conceptual study of the concept from the product innovativeness (McNally et al., 2010). He found that
the product newness was the most common use in the product innovativeness. Baark et al (2011) was define the product
innovativeness as a qualification for the ability of a company in how they
introduce their new goods to the marketplace. This was mean how the
construct of a company should be in order to get the information about
innovation of a company and make a survey on their outcome performance (Baark et al., 2011). According the
research by Mata and Woerter (2013), there was has the disadvantage for the
product innovation which is dissatisfaction to customer with the product
innovation (Mata and Woerter, 2013). It will make
dissatisfaction from consumers if the new products are not meet what they
expected. Therefore, product innovations for a company are totally new for the
consumers in the market and it also can be survey as nature of innovation. The highly
for the products innovation will increase the performance of the products (McNally et al., 2010). If a company
has fully adopted for their capabilities of production innovation, it will
cause the improvement of the product performance. When a company has the high
performance for their product, it will cause every consumer like to spend their
money to the products. If every consumer likes to spend or use with the
products innovation that create by SI, consumers will bring the company in
increasing in their business growth.

281

2.1.2 Sources of
innovation

Von
Hippel (2013) was elaborated that the innovation are not just only being within
the company, but the source of the innovation are on external. There has built
the innovation by using certain external sources and the high level of
understanding about the sources will be able transfer the highly innovation (von Hippel, 2013). There can
build a useful service and products with the both combination of external
source and internal source. Von Hippel (2013) was allocated the external into
three categories. Von Hippel (2013) was defining that the external sources must
include the performance into the innovation. Lichtenthaler (2011) was define
the disadvantage for the innovation source which are get from the marketplace (Lichtenthaler, 2011). For certain
survey was do in the marketplace was inaccuracy, because certain consumer will
be the loyalty consumers. What product create by the company also been like and
support by their loyally consumers. Besides that, for all executive in the
company are mostly agree to create innovation with continuous or unstop because
it is the necessary for the competitive advantage in the company. The
information of innovation are mostly form external sources, which are doing
survey what or which types product needs by consumers in the marketplace. Therefore,
source of the innovation are important to build some innovation products. With
the information has, they only know what they should create to the market and
what was the consumer are expect for. The external information from consumers
on the market are important to the company to make the innovation in their
products, because of the company must understand what types of product are
looking for consumers in the marketplace. In addition, SI can help the company
in their business growth because of they are created the product innovation
what consumers demand in the market.   275

2.3 Early
supplier involvement (ESI)

            Early supplier involvement (ESI) was processes that bring
advantage to the project of product development in certain ways. According to
Eisto et al (2010), the advantage of ESI can be reduce the cost for new
product, shorter time to market, development in faster way and quality
improvement (T. Eisto et al., 2010). ESI was
providing benefit in the decreasing development and manufacturing time for the
new products. Lukhoba and Muturi (2015) has elaborate that the cost of
manufacturing for a product are mostly decided by the pattern of the products (Lukhoba and Muturi, 2015). Supplier was
been approve to drive in efficiency ways and helping in market to get faster by
using Original Equipment Manufacturers (OEMs) (Bakar et al., 2017). Du et al
(2011) was elaborate that there has some disadvantage for ESI which is
difficult to be process  (Du et al., 2011). There are
difficult to be process if the top management in the company does not approve
the work done by ESl. If the top management did not engage with ESI, there are
hard to be done by ESI with certain projects. In additional, Hamid (2006) was
define that the ESI can make improvement in design of the goods and process of
the product development by using the vital product (Hamid, 2006). Therefore, the
participation of early supplier will has difference idea to the product and
decrease the certain waste of the process to the products. By using this
methods, time of the new product to the market will be shorter and can build
the growth of the product in the market with early time. Participation from ESI
can help the company improving in the business growth because of them are more
understand the needs from the consumers in the marketplace.

274

  2.3.1 Supplier development (SD)

            Supplier development (SD) was the integral section from
the relationship between supplier and manufacturing. SD was play an important
role in the element of supply chain management (Tungjitjarurn et al., 2012). In others
word, SD also can called as supplier performance. When company are finding the suppliers
those are insufficient in their job performance, it can be assist to supplier
in growing their capabilities. There has some evidence shown that the plan of
SD was increase the supplier performance such as SD plan of Otis Elevator which
are located in Indiana, the SD plan was the main activity for the supply
management (SM). The executive in Eaton Corporation was trust that the SD are
assist to make improvement by using their supply base and decrease the cost of
supply base, increase the capacity, increase quality and decrease the lead time
(Modi and Mabert, 2007). Abdullah
(2008) was define that the SD are operation for long term period of time
between the consumer of the company and supplier would increase in their
quality, technical, capabilities and cost delivery time (Abdullah, 2008). Every company
was increasing in their performance for their supplier with using the
commitment initiative which are transmit the ability skill to lets them depend
on practicing with the production into the supply base (Sako, 2004). Moreover, Li
et al (2007) was elaborate that the communication was another factor to
interface between company and suppliers. Light in communication will cause has
problem in supplier production and can be misunderstand for the production
between each other  (Li et al., 2007). Worthless in
communication will cause the conflict happen in any situation, it will guide to
incorrect production and misunderstandings (Modi and Mabert, 2007). Therefore, SD
is playing an important role that can make a result in improving or decreasing
the business growth in the market for the supplier.         287

2.4 Total
Quality Management (TQM)

            Total Quality Management (TQM) was a combination way to
consists of principles, whose target is to make the improvement in the product
or service quality for a company. TQM are more concentrate in improving the
satisfaction of consumers (Vanichchinchai and Igel, 2011). Ardianto et al
was define TQM as make sure the procedure are followed and satisfied by
consumers (Ardianto et al., 2014). It was
effectively in both downstream and upstream are very major to consumer that to
focus on corporate and it was bring the competitive benefit to the supply chain
(Talib et al., 2011). There has evaluation
for the case study of TQM is responsible to realize the target of a company by
appeasing the consumer and maintain the relationship with the supplier
integrated for long term period of time. Moreover, there was a necessary to
determine whether the TQM are fulfilling for successful for every types of
strategy in the company.  Successfully of
the TQM will cause better in the competitive benefit and satisfaction form
consumer. According to the information provided by Mohammad Mosadeghrad (2014),
there has the disadvantage for TQM which is demands in planning, capital and
time (Mohammad Mosadeghrad, 2014). The amount needs
in time and capital for TQM are huge amount to be spent. It needs to be spent a
lot for a company if they use TQM strategy to build up their business growth. Lastly,
Mehra and Raganathan (2008) was state that the TQM need has a long term period
of time to make the improvement by using both information which is human
resources and financial (Mehra and Ranganathan, 2008; Joiner, 2007). TQM that
provided by SI was the most important session to company, because of the
quality product or service will cause the company in improving or decreasing in
the business growth.  279

 

 

2.5 Supplier Selection

                Supplier
selection (SS) was a process from a company to determine, evaluate and
agreement with the supplier. The reason of SS in a strategy for the decision
making is to carry out the goal of the company in the long term period of time
in lower risk. In year 2012, Japanese car machines was faced a problem with
shockwave in supply for the certain flood at the Thailand country which are in
Pathumthani and Ayutthya. Both two areas was main location where the suppliers
are located.  Dargi et al (2014) was elaborate
that every bigger and successful company has bigger and stronger supplier in
the behind of them (Dargi et al., 2014). The way in selection right
supplier is important to company which is can reduce or minimize the external
risk for the company by the supplier. According to Golmohammadi et al (2009)
was state that the process of the arrangement for SS needs spent a huge amount
of financial resources for a company (Golmohammadi et al., 2009). It was also needs to spend a
lots of times and labor forces to done the procedure of SS. In additional,
there was the benefit to has process strategy of SS which is visibility form their
perception. By purchasing some product through their perception, it will help
company to purchase a best quality for the materials or production.   218

2.5.1 Supplier selection criteria

                The
analysis and certification of the standard level for the estimate and selection
for the supplier was more concentrate on practitioners and academic. The criteria
of the supplier were dividing into two categories which are qualitative and
quantitative attributes. The ways to select a criteria with adequate was depend
on purchasing condition. Cost, delivery and quality was the fundamental for
criteria are still use abroad. Moreover, the scope of criteria was developing
into the wider matrix parallel with the SCM philosophy. Thiruchelvam and Tookey
(2011) was defined that the capability and performance was the two main key
point for the abilities to a supplier (Thiruchelvam and
Tookey, 2011). Performance is the talent of supplier to
fulfill the demand of buyer in short term period of time with the term of
quality, cost and others criteria term. The capability can defined as the talent
of supplier to influence the benefit of purchaser in long term period of time.
The element for the performance are quantitative and it was use to survey the
problem in the qualitative. According to Kim and Wagner (2012), there was state
that the supplier selection criteria was supply certain product to the company (Kim and Wagner,
2012). If the companies need to purchase other
material or product to substitute those products, they do not have for it. Because
of the supplier criteria was provide the unique product and does not provide the
substitute product to others. In additional, Rajesh and Ravi (2015) was mention
that supplier criteria was help a lots for the company such as in reducing
cost, high quality, faster delivery and so on (Rajesh and Ravi,
2015). The Supplier criteria can make a company
improve in the business growth because based on the cost saving and the high
quality. The consumers in the market can get the high quality with the cheaper
cost and it will cause the business growth to increase in the marketplace

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