Managing Quality Performance in Supply Chains through Diffusion of Innovations

Nadeem Kureshi
Center for Advanced Studies in Engineering, Islamabad, Pakistan nadeemk@msu.edu

1. ABSTRACT

Supplier Management is fast becoming one of the most critical determining factors in businesses as companies around the world are relying on outsourcing as a strategic tool to achieve competitive advantage. The growing trend of focusing on core competencies and letting the experts do their job has furthered the importance of Supplier Management. While the driving force behind any outsourcing remains increased competitiveness with a particular focus on reducing costs, it essentially requires certain strengths on part of the suppliers. Considering the fact that most of the suppliers around the world are SMEs, who are resource constrained by nature, the idea of outsourcing can potentially end up to be dichotomous;” competitiveness to be achieved through using resource constrained entities”.

Such situations can be much more pronounced in developing economies and in situations where less liberty is available in choosing suppliers. Of the various initiatives undertaken to address this problem, Supplier development stands out. Contemporary literature however suggests that among the major Supplier Development activities, those carrying higher costs are seldom or never undertaken, and even the large firms tend to concentrate on activities involving less or no costs.

This paper establishes a relationship between higher Supply Chain performances and the process of Diffusion of practices among firms, thus opening an avenue of no-cost improvement of suppliers, on the lines of buyers. An extensive literature survey is undertaken which forms a basis of an ongoing empirical research on the subject.

Keywords: SMEs, Supplier Management, Supply Chain Integration, Diffusion of Innovations.