Samyeong, as one of the major suppliers of Hyundai for control cables, they are pressured to make major changes in the area of cost, quality and, productivity which are Hyundai's selection criteria.
Courses of Action
In order to meet Hyundai's selection criteria, Samyeong must have a responsive supply chain which focus on innovative products and stable processes. This will utilize strategies aimed at being responsive and flexible to the rapid design changes required in the production of automotive cables. This will also cater to Hyundai's criteria of high technological capacity.
Why focus on high technological capacity and not on the acquisition of the specific product?
It sustains Hyundai's aim of a cooperative partnership-like single supplier relationship which will also build long-term supply contracts which is prevalent in a stable manufacturing process It initiates suppliers to improve their long-term capability It will protect Hyundai from direct conflict with suppliers if specific product acquisition is used Previous problems with vulnerabilities to unexpected difficulties, i.e. labour disputes, are reduced In the long run, it will help develop in improving quality, cost and production through cooperative development
With the presence of long standing supplier relationships, the company could also negotiate lower costs and even aid the supplier company to reduce production costs and thus prices. Quality products can also be ensured by Hyundai from its suppliers.
How will Hyundai measure and ensure in developing its suppliers capabilities?
Hyundai measures supplier's capabilities using delivery reliability, cost, quality, and flexibility. A supplier's report was used: managerial (20%), technological development (25%), production management (25%), quality management (25%) and various incentives for having patents, 100ppm, ISO, and exports (5%). Through this, areas to be...