Analyzing the interaction of critical factors of supplier development using Interpretive Structural Modeling—an empirical study

  • S. Chidambaranathan
  • C. Muralidharan
  • S. G. Deshmukh


In order to compete effectively in the global market, a company must have a network of competent suppliers. To create and maintain such a network and to improve various capabilities that are necessary for the buying organization to meet its increasing competitive challenges, the buying firms may engage in supplier development. To improve the supplier capabilities, the buying organizations have to consider various supplier development factors such as supplier base, communication with suppliers, direct involvement of suppliers, etc. Their significance and the role in supplier development process are also to be considered. These factors not only affect the supplier development process but also influence each other. However, the methodologies used in supplier development literature analyze the factors independently. This paper attempts to overcome the above, by analyzing the interrelationship between the supplier development factors. The Interpretive Structural Modeling (ISM) approach has employed to develop the structural relationship among supplier development factors and also tried to define the levels of different factors based on their driver/dependence power and their mutual relationships. Finally, the ISM result is compared with empirical study and a case study.


Supplier development Interpretive Structural Modeling (ISM) Structural relationship 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 1.
    Krause DR, Ellram LM (1997) Critical elements of supplier development. Eur J Purch Supply Manag 3(1):21–31. doi: 10.1016/S0969-7012(96)00003-2 CrossRefGoogle Scholar
  2. 2.
    Handfield RB, Krause DR, Scannell TV, Monczka RM (2000) Avoid the pitfalls in supplier development. Sloan Manage Rev 41:37–49Google Scholar
  3. 3.
    Hartley JL, Choi TY (1996) Supplier development: customer as a catalyst of process change. Bus Horiz 39(4):37–44. doi: 10.1016/S0007-6813(96)90050-6 CrossRefGoogle Scholar
  4. 4.
    Indian Brand Equity Foundation 2005. Fortune500_successess_India—Executive summary. Available at:
  5. 5.
    Williams AJ, Oumlil AB (1987) A classification and analysis of JPMM articles. J Purchasing Mater Manage 23(3):24–28Google Scholar
  6. 6.
    Olsen RF, Ellram LM (1997) Buyer–supplier relationships: alternative research approaches. Eur J Purch Supply Manag 3(4):221–231. doi: 10.1016/S0969-7012(97)00022-1 CrossRefGoogle Scholar
  7. 7.
    Leenders MR (1989) Supplier development. J Purch Mater Manage, 25th Anniversary, 47–55Google Scholar
  8. 8.
    Hartley JL, Jones GE (1997) Process oriented supplier development: building the capability for change. J Supply Chain Manag 33:24–29CrossRefGoogle Scholar
  9. 9.
    Hahn CK, Watts CA, Kim KY (1990) The supplier development program: a conceptual model. J Purch Mater Manage 26(2):2–7Google Scholar
  10. 10.
    Chakraborty S (1996) Vendor development strategies. Int J Oper Prod Manage 16(10):54–66. doi: 10.1108/01443579610130691 CrossRefGoogle Scholar
  11. 11.
    Galt DA, Dale BG (1991) Supplier development: a British case study. J Purch Mater Manage 27(1):16–22Google Scholar
  12. 12.
    Watts CA, Hahn CK (1993) Supplier development programs: an empirical analysis. Int J Purch Mater Manage 29(2):11–17Google Scholar
  13. 13.
    Krause DR, Handfield RB, Scannell TV (1998) An empirical investigation of supplier development: reactive and strategic processes. J Oper Manage 17(1):39–58. doi: 10.1016/S0272-6963(98)00030-8 CrossRefGoogle Scholar
  14. 14.
    Krause DR, Ragatz GL, Hughley S (1999) Supplier development from the minority supplier’s perspective. J Supply Chain Manag 35:33–41CrossRefGoogle Scholar
  15. 15.
    Krause DR, Scannell TV (2002) Supplier development practices: product- and service-based industry comparisons. J Supply Chain Manag 38:13–21CrossRefGoogle Scholar
  16. 16.
    Reed FM, Walsh K (2002) Enhancing technological capability through supplier development: a study of the U.K. aerospace industry. IEEE Trans Eng Manage 49(3):231–242. doi: 10.1109/TEM.2002.803379 CrossRefGoogle Scholar
  17. 17.
    Li WL, Humphreys P, Chan LY, Kumaraswamy M (2003) Predicting purchasing performance: the role of supplier development programs. J Mater Process Technol 138(1–3):243–249. doi: 10.1016/S0924-0136(03)00079-7 Google Scholar
  18. 18.
    Humphreys P, Li WL, Chan LY (2004) The impact of supplier development on buyer–supplier performance. Omega 32(2):131–143. doi: 10.1016/ CrossRefGoogle Scholar
  19. 19.
    Tom MG, Christian H (2006) Specifications and supplier development in the UK electrical transmission and distribution equipment industry. Int J Prod Econ 104:164–178. doi: 10.1016/j.ijpe.2004.08.005 CrossRefGoogle Scholar
  20. 20.
    Sachin BM, Vincent AM (2007) Supplier development: improving supplier performance through knowledge transfer. J Oper Manage 25:42–64. doi: 10.1016/j.jom.2006.02.001 CrossRefGoogle Scholar
  21. 21.
    Li W, Paul KH, Andy CL, Yeung TC, Edwin C (2007) The impact of specific supplier development efforts on buyer competitive advantage: an empirical model. Int J Prod Econ 106:230–247. doi: 10.1016/j.ijpe.2006.06.005 CrossRefGoogle Scholar
  22. 22.
    Krause DR, Handfield RB, Tyler BB (2007) The relationships between supplier development, commitment, social capital accumulation and performance improvement. J Oper Manage 25:528–545. doi: 10.1016/j.jom.2006.05.007 CrossRefGoogle Scholar
  23. 23.
    Krause DR (1997) Supplier development: current practices and outcomes. Int J Purch Mater Manage 33(2):12–19Google Scholar
  24. 24.
    Lee DM (1999) Structured decision making with Interpretive Structural Modeling (ISM). Sorach, CanadaGoogle Scholar
  25. 25.
    Mandal A, Deshmukh SG (1993) Vendor development using Interpretive Structural Modeling (ISM). Int J Oper Prod Manage 14(6):52–59. doi: 10.1108/01443579410062086 CrossRefGoogle Scholar
  26. 26.
    Pandey VC, Suresh G, Ravi S (2005) An Interpretive Structural Modeling of enabler variables for integration in supply chain management. Productivity 46(1):93–108Google Scholar
  27. 27.
    Banwet DK, Arora R (1999) Enablers and inhibitors of e-commerce implementation in India—an interpretive structural modeling (ISM) approach. In: Kanda A et al (ed) Operations management for global economy challenges and prospects. Phoenix, New Delhi, pp 332–341Google Scholar
  28. 28.
    Rajesh KS, Suresh KG, Deshmukh SG (2007) Interpretive structural modeling of factors for improving competitiveness of SMEs. Int J Prod Qual Manage 2(4):423–440. doi: 10.1504/IJPQM.2007.013336 CrossRefGoogle Scholar
  29. 29.
    Potter M, Gordan S, Hamer P (2004) The Nominal Group Technique: a useful consensus methodology in physiotherapy research. N Z J Physiotherapy 32(3):126–130Google Scholar
  30. 30.
    Nunnally JC (1978) Psychometric theory. McGraw-Hill, New YorkGoogle Scholar
  31. 31.
    Alberto P, Braglia M (2000) Vendor selection using principal component analysis. J Supply Chain Manag 36:63–69CrossRefGoogle Scholar
  32. 32.
    Hair JF, Anderson RE, Tatham RL, Black WC (1998) Multivariate data analysis with readings, 5th edn. Prentice-Hall, Upper Saddle RiverGoogle Scholar
  33. 33.
    Kannan VR, Tan KC (2002) Supplier selection and assessment: their impact on business performance. J Supply Chain Manag 38:11–21CrossRefGoogle Scholar

Copyright information

© Springer-Verlag London Limited 2008

Authors and Affiliations

  • S. Chidambaranathan
    • 1
  • C. Muralidharan
    • 1
  • S. G. Deshmukh
    • 2
  1. 1.Department of Manufacturing EngineeringAnnamalai UniversityChidambaramIndia
  2. 2.Department of Mechanical EngineeringIndian Institute of Technology, DelhiNew DelhiIndia

Personalised recommendations