Academic writing and presentation

ACADEMIC WRITING AND PRESENTATION Research Proposal TOPIC LOW VOLUME PRODUCTION IN MANUFACTURING COMPANIES AND ITS IMPACTS ON THE BUYER SUPPLIER RELATI. The volume of manufactured products a company produces might be one of them as well. Having a low volume production could be considerate a negative aspect for the buyersupplier relationship. Therefore, this study will focus on the implications of manufacturing companies which have lowvolume production and its suppliers’ relationships.

HANOI UNIVERSITY SCIENCE AND TECHNOLOGY

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ACADEMIC WRITING AND PRESENTATION

Research Proposal

TOPIC: LOW VOLUME PRODUCTION IN MANUFACTURING COMPANIES AND ITS IMPACTS ON THE BUYER-SUPPLIER

RELATIONSHIP

Hanoi, August / 2022

Table of Contents

1 INTRODUCTION

In the aggressive and competitive market which manufacturing companies face nowadays, having a strategic partnership with suppliers is crucial In order to build a good relationship, efforts from both sides, buyers and suppliers, should

be present However, as the relationship must be beneficial to both parts, deciding whether or not to apply efforts in certain companies is a decision that needs to be made with care (Glock et al, 2017)

Tanskanen and Aminoff (2015) state that there are many factors that can boost

or diminish suppliers’ interest in developing a collaborative partnership with buyers

However, on the other hand, also there are some factors that can drive suppliers away from the idea of building partnerships Destructive conflicts, perception of dependency and unfairness are some of them (Borekci et al, 2014)

The volume of manufactured products a company produces might be one of them as well Having a low volume production could be considerate a negative aspect for the buyer-supplier relationship Therefore, this study will focus on the implications of manufacturing companies which have low volume production and its suppliers’ relationships

This research could help me to examine practices that other companies have been applying in this kind of situation and also, from a supplier´s perspective, understand which factors could improve this relationship and potentially lead it

to become a collaborative partnership

The main aims of this research are:

1) To examine and understand the results of actions that manufacturing companies have been taking when they come across with problems dealing with suppliers due to the fact that these companies have low volume production;

2) It will also look the issue from the supplier´s perspective, aiming to investigate the potentials factors which could contribute to facilitate the relationship and be beneficial to both parts

In order to achieve the aims, objectives are set and listed below:

1) Get in touch with 15 to 20 companies which produces its good in low quantities and interview employees who have responsibilities within supplier relations, such as supplier development engineers and buyers;

2) Combine data from all those companies and compare all the best practices used to facilitate the relationship with suppliers;

3) Get in touch with the suppliers of the companies interviewed and also interview employees who have direct relationship with its customers, such as salespersons and potentially engineering / production managers 4) Critically review the literature related to the topic and compare what has been already studied and the findings from the interviews

5) Attempt to develop a framework which could ease difficult buyer-suppliers’ relationships

The aims and objectives raise important research questions which will be attempted to be answered:

1) How to deal with a supplier where the company doesn’t represent a significant percentage of their sales?

2) From a supplier´s perspective, what are the key points to be considerate when dealing with a customer which apparently is not commercially attractive?

3) In this conflicting scenario, are there commons interests which could benefit both parts in the long term?

3 LITERATURE REVIEW

The literature review will focus on what have already been studied about the dyadic buyer-supplier and the factors that can either improve or deteriorate the relationship

As Johnsen and Lacoste (2016) have stated, many studies have already been done on the asymmetrical buyer-supplier relationship, meaning that only one side has advantages A critical review on this literature will be performed in order to highlight and better understand why those types of relationship happen, consequences to both sides and how it is related to the subject that has been chosen for this study

There have also been many researches done on the power of attractiveness that companies have and how it leverages the buyer-supplier relationship (Tanskanen and Aminoff, 2015) A critical review of this literature is also important as it can raise relevant points regarding what suppliers expect from their clients

The literature mentioned have relevant points for the chosen subject However, little, or none researches have been done specifically on the issue supplier

As already mentioned, Johnsen and Lacoste (2016) have studied asymmetrical customer-supplier relationships, focusing specially on conflict, power and dependence, and the problems that such characteristics potentially can create for the relationship

Understanding those three characteristics is important for the current research as they will be present in the specific situation of low volume production proposed here

An important finding in this research is that conflict can have a bi-polarity aspect, meaning that it can help the relationship as well it might damage the relationship Moreover, conflicts are inevitable as firms will always try to maximize their gains

Understanding the nature of the conflicts and the ways on how to deal with them is crucial, as it will determine if the conflict will be beneficial or destructive

The results of the study also have shown that power can have either positive or negative impact on the relationship And the unbalanced power, meaning that one part is more powerful than the other, might happen on both sides: customer can be more powerful than the supplier or vice-versa

The success of the relationship will depend on how the powerful party deals with the other party and how the “weaker” party perceives the action of the more powerful one If power is used to dominate one party, it will diminish trust

in the relationship, which is considered essential for a collaborative partnership

On the other hand, when a party is recognized as powerful but doesn’t “enforce” the power on the other party, it enhances the less powerful party´s wiliness to cooperate

The study highlights a fact which is important for the current research: a powerful supplier is an under-investigated area The proposed study could bring some light to this matter

The last aspect on this study is dependence, which is closely related to power, as the one who is the “weaker” in the relation, might be dependent on the powerful one And it might happen to both sides Customer and supplier can be dependant

Dependency is often detrimental to relationships and firms normally try to reduce it to lower levels, trying to avoid to become a “captive” partner

Tanskanen and Aminoff (2015) have studied the attractiveness in the buyer-supplier relationship

The study has shown that the attraction factors influences the party’s commitment to the relationship It also introduces an important theory called Social Exchange Theory (SET), which defines how individuals act expecting returns from others These expectations are related to mutual attractiveness In a relationship, both parties expect something from one another, and also want to

be attractive to each other, as attractiveness supposedly increases the reward power in relationships

However, attraction is related to perceptions Therefore, both buyer and supplier

´s perceptions of attractions must be studied

Tanskanem and Aminoff (2015) research has found four categories of attractiveness, which are economic, behaviour, resource and bridging based attractiveness The volume of production falls into the economic based category But as shown, there are other important categories which could make

up for the low customer´s purchasing volume

And even within the economic based attractiveness, other important drivers of buyers´ attractiveness have been identified, such as customer success, new customer business and future of customer´s industries

For buyers, price/cost, delivery and quality have been identified as key attractive attributes

On the behaviour base attractiveness, communication, commitment, trust and respect have been found as the ones which are the most important drivers for the relationship

Brand and reputation were important characteristics found under resource based attractiveness

And finally, bridging attractiveness is related to the fact that a buyer/supplier can be the “bridge” to a larger value network

As already mentioned, attractiveness is related to perception Zaefarian et al (2015) have studied the perceptions of fairness from both buyers and supplier´s perspectives And as explained, perception of fairness is a key factor to build long-term buyer-supplier relationship In this study it is shown that many researches on buyers´ perception of fairness have already been done, but little

on supplier´s perception, which is in fact equally important, as business relationships are interdependent

This study presents three important kind of perceived fairness: distributive

justice, which has to do with the way that benefits and risks are shared between

buyers and suppliers; procedural justice, that refers to the way policies, guidelines and process are dealt in the dyad, and interaction justice, which

relates to social interactions in business relationships, such as respect, honesty and so on

Perception of dependency is also studied by Zaefarian et al (2015), as it can have a great impact on trust and commitment, which are considered major pillars for building quality relationships This study has also shown that distributive, procedural, and interaction justice have a strong impact on trust and commitment

Such perceptions are important for the current study as they will help to understand the key factors to focus on to reduce the impact of low volume production

Borekci et al (2014), in line with other researches also states the importance of the study of social exchange theory (SET) and how general and psychological contracts are built, for the buyer-supplier relationship It is in particular important for the current research as it attempt to explains buyers/suppliers behavioural in adverse conditions

Borekci et al (2014) also introduces supplier satisfaction as another important factor to build a long term quality buyer-supplier relationship It is stated that suppliers’ satisfaction is related to its feeling of equity and fairness which are built upon cognitive judgements

This study boils down the SET into economic and socio-emotional factors Many important concepts /considerations and guidance have been found with the literature review and it will be more in depth studied and critically analysed during the research paper

4 METHODOLOGY

4.1 Research Strategy

Case study strategy will be adopted, as it fits the purpose of this research As

Saunders et al (2012) states, a case study aims to explore/explain a research topic, which in this case is the buyer-supplier relationship, within a context, which here is low volume production in manufacturing companies

Besides, buyers and suppliers will be interviewed and literature related to the subject will be critically analysed Considering the scenario given, all the data will be analysed, compared and then the conceptual framework will be attempted to be created

4.2 Research Approach

As this research will explore the buyers and supplier’s meanings and the relationship between them in a specific context, which is the buyers ‘low

volume production, Qualitative research design will be used Non-numeric data

will be collected This qualitative definition is given by Saunders et al (2012) The aim of this approach is to investigate, explore the relationship within the proposed context and identify positive and negative possible outcomes from both perspectives

4.3 Research Design

The nature of the research design will be exploratory and explanatory as it aims

to explore the relation between low volume production and the relationship buyer-supplier, and furthermore, understand and explains this relation between the two variable (Saunders et al, 2012)

It will be Cross-sectional as the research will happen at the present time, over a

short period of time

A cross-sectional study is a type of research design in which you collect data from many different individuals at a single point in time In cross-sectional research, you observe variables without influencing them

When to use a cross-sectional design?

When you want to examine the prevalence of some outcome at a certain moment in time, a cross-sectional study is the best choice

4.4 Data Collection

Primary data will be collected in form of in-depth or unstructured interviews Buyers and suppliers will be contacted and the interviews will be conducted on

a one-to-one basis Even though the aim of the interview and the questions to be answered by the research will be clearly stated, participants will be given the opportunity to talk freely about their experiences related to the topic This approach will allow us gather qualitative data, which will help to build the case study

Interviews will happen face-to-face, over the phone or through internet (facebook, zalo or any other device), depending on geographic constraints

5 CONCLUSION

Once the research is completed, it is expected to have gained a good understanding of how buyers have been dealing with suppliers in the situation

of low volume production

Learning the supplier’s point of view will also be extremely important, as in this particular situation they are supposed to be the ones who have the difficult decision to make to whether or not commit to have a long term partnership with

a customer which apparently doesn’t contribute with a high percentage of the supplier’s revenue

The results of the study should contribute to develop a framework of best practices to be used in this adverse buyer-supplier relationships, having a practical application in manufacturing companies

The companies involved in the research (buyers and suppliers) also are expected

to benefit from the results as the study will be shared with all participants

6 REFERENCES

Borekci, D et al (2014) Quality of relationships with alternative suppliers: The

role of supplier resilience and perceived benefits in supply networks Journal of

Management & Organization, 20(6), pp 808-831

Glock, C et al (2017) Decision support models for supplier development:

Systematic literature review and research agenda International Journal of

Production Economics, 193, pp 798-812

Jonhsen, R and Lacoste, S (2016) An exploration of the ‘dark side’ associations of conflict, power and dependence in customer–supplier

relationships Industrial Marketing Management, 59, pp 76-95

Kumar, S and Routroy, S (2016) Analyzing a manufacturer’s returns from

supplier development programs Science Direct, 4, pp 2255-2262

Lacoste, S and Blois, K (2015) Suppliers' power relationships with industrial

key customers The Journal of Business & Industrial Marketing, 30(5), pp

562-571

Murfield, M and Esper, T (2016) Supplier adaptation: A qualitative

investigation of customer and supplier perspectives Industrial Marketing

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enablers in a global context Journal of Purchasing & Supply Management, 21,

pp 95-102

Schiele, H et al (2015) Managing supplier satisfaction: Social capital and

resource dependence frameworks Australasia Marketing Journal, 23, pp

132-138

Tanskanen, K and Aminoff, A (2015) Buyer and supplier attractiveness in a

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prediction Journal of Business Research, 69, pp 4613-4623

Zaefarian, G et al (2016) Do supplier perceptions of buyer fairness lead to

supplier sales growth? Industrial Marketing Managemen,53, pp 160-171

Wu, J and Wu, Z (2015) Key supplier relationships and product introduction success: The moderating roles of self-enforcement and interdependence

between buyer and supplier Industrial Marketing Management, 46, pp 183-192