Implementing supplier relationship management in the global engineering industry

This PhD thesis studies the implementation of supplier relationship management (SRM) in the global engineering industry. The research is based on in-depth evidence from a study conducted in a global engineering company from March 2019 to July 2022. The thesis explores two research questions (RQs) about SRM implementation. RQ1 examines how a global engineering company can implement a centrally managed, globally integrated supplier base for strategic and targeted global supplier management. RQ2 builds on RQ1 and examines the actual implementation of SRM in the global engineering context after the initial steps have been implemented in the global engineering firm.

The results of this thesis are twofold: first, the results show that the case company applied a multi-step process of integrating their local supplier bases resulting in different results. Most notably the case company engaged in two different approaches of supplier base reduction, first attempting to reduce it top-down by ‘cutting the tail’ of the supplier base, resulting in various internal disruptions. In the second supplier base reduction effort the case company focused on supplier prioritisation and grouping of the suppliers resulting in a relatively manageable global supplier base. After the case company had integrated its local supplier bases, the case company implemented SRM through a pilot SRM programme focused at improving select suppliers’ delivery performance only. Varied effects were identified using two SRM implementation capabilities: ‘performance assessment’ and ‘relationship development’.

This thesis contributes to both SRM, and operations and supply chain management literature. First, the thesis offer initial insights and understanding on how global engineering companies can integrate global procurement strategies through integration of previous localised supplier bases into a globally manageable consistent supplier base. Second, by providing an initial contextual understanding on how SRM can be implemented in global engineering operations as well as providing insights into varied effects on both performance assessment and relationship development and their mutual interconnectedness.