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This paper presents a framework for supplier base management and provides a case study-based analysis of the Indian automotive industry. It combines elements of relationship and network theories from different research streams to develop a three-level supplier base management framework including a dyadic, supply chain and network perspective. The case study analysis enables the determination of specific characteristics and challenges of supplier base management in India and the identification of major development stages among Indian automotive suppliers.
INTRODUCTION
Two major developments in the global automotive industry are the increasing importance and integration of suppliers into the value creation process and the rise of emerging markets such as India or China (Dyer, 1996; Christopher and Juttner, 2000; and Humphrey, 2003). The growing importance of suppliers for Original Equipment Manufacturers (OEMs) and the increasing interdependence among the key players in the automotive industry are a result of the shift in the value creation process, with suppliers accounting for the projected 77% of the total value creation in 2015 (Mercer Management Consulting and Fraunhofer Gesellschaft, 2004). New requirements are set by customers characterized through higher quality expectations and a wide array of individual customer wishes. With life cycles of new models having been reduced horn ten years in the past to six years today, the innovative ability of organizations remains a key success factor. However, the increasing pressure on costs and efficiency is sti11 driving the OEMs and suppliers within the automotive industry. To facilitate the process of innovation and achieve the objectives of cost reduction and providing quality, OEMs are focusing on differentiating and strengthening their brands and capabilities. Therefore, brand management has become increasingly important while large parts of the production and development processes are being handed over to suppliers. The Japanese manufacturers, led by Toyota, have shown that close relationships with suppliers, including extensive information exchange and direct assistance to suppliers, are a source of strategic strength within this competitive industry environment (Langfield-Smith and Greenwood, 1998). OEMs and suppliers are turning to new forms of inter- organizational collaboration, in which the management of external supplier resources is an essential task for improving the overall costs in automotive production (Gottschalk, 2007). Researchers and practitioners confirm the demand and development of partnership -like collaboration between OEMs...