Casting Users- Perspectives on Foundries as Suppliers

Authors: T. Saarelainen, O. Piha, P. Makkonen, J. Orkas

Abstract:

Global competition is tightening and companies have to think how to remain competitive. The main aim of this paper is to discuss how Finnish foundries will remain competitive. To fulfil the aim, we conducted interviews in nine companies using castings and analysed buyer–supplier relationships, current competitive advantages of Finnish foundries and customer perspectives on how Finnish foundries remain competitive. We found that the customerfoundry relationship is still closer to traditional subcontracting than partnering and general image of foundries is negative. Current competitive advantages of Finnish foundries include designing cooperation, proximity and flexibility. Casting users state that Finnish foundries should sell their know-how and services instead of their capacity, concentrate on prototype, single and short series castings and supply ready-to-install cast components directly to customers- assembly lines.

Keywords: Buyer-supplier relationship, casting, competitiveadvantage, customer prespective.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1061918

References:

[1] J. Palokangas, "Status and Scenarios of Technology Industries (In Finnish Teknologiateollisuuden tilanne ja näkymät)," in Seminar of Castings Use, Finland, April 12 - 13, 2007.
[2] J.H. Dyer, D.S. Cho and W. Chu, "Strategic supplier segmentation: The next "best practice" in supply chain management," California Management Review, vol 40, pp. 57-77, 1998.
[3] J.S. Oberoi and J.S. Khamba, "Strategically managed buyer-supplier relationships across supply chain: an exploratory study," Human Systems Management, vol 24, pp. 275-283, 2005.
[4] R.O. Olsen and L.M. Ellram, "A portfolio approach to supplier relationships," Industrial Marketing Management, vol 26, pp. 101-113, 1997.
[5] M.Bensaou, "Portfolios of buyer-supplier relationships," Sloan Management Review, pp. 35-44, 1999.
[6] A. Kaufman, C.H. Wood and G. Theyel, "Collaboration and technology linkages: a strategic supplier typology," Strategic Management Journal, vol 21, pp. 649-663, 2000.
[7] G. Svensson, "Supplier segmentation in the automotive industry: a dyadic approach of a managerial model," International Journal of Physical Distribution & Logistics Management, vol 34, pp. 12-38, 2004.
[8] B. Johnson and L. Burke, Educational Research: Quantitative, Qualitative, and Mixed Approaches. Boston: Allyn & Bacon, 2004.
[9] P. Töttö, "Beyond qualitative and quantitative research? Methodpolitical discussion (In Finnish "Kvalitatiivisen ja kvantitatiivisen tuolle puolelle? Metodipoliittinen puheenvuoro")," Sosiologia, vol 36, pp. 280- 292, 1999.
[10] T. Seppälä, "Buyer-supplier relationships and sourcing of strategic components." Licentiate thesis. Turku: Turku School of Economics and Business Administration, 2001.
[11] M.P. Pérez and A.M. Sanchéz, "Supplier relations and flexibility in the Spanish automotive industry," Supply Chain Management: An International Journal, vol 6, pp. 29-38, 2001.
[12] P.M. Simpson, J.A. Siguaw and S.C. White, "Measuring the performance of suppliers: an analysis of evaluation processes," The Journal of Supply Chain Management, vol 38, pp.29-41, 2002.
[13] C.A. Weber, J.R. Current and W.C. Benton, "Vendor selection criteria and methods," European Journal of Operational Research, vol 50, pp. 2-18, 1991.
[14] P. Kraljic, "Purchasing must become supply management," Harvard Business Review, pp. 109-117, September-October 1983.
[15] R.R. Kamath and J.K. Liker, "A second look at Japanese product development," Harvard Business Review, pp. 4-14, November- December 1994.
[16] R.J. Fontenot and E.J. Wilson, "Relational exchange: a review of selected models for a prediction matrix of relationship activities," Journal of Business Research, vol 39, pp.5-12, 1997.
[17] S.N. Wasti and J.K. Liker, "Risky business or competitive power? Supplier involvement in Japanese product development," Journal of Product Innovation Management, vol 14, pp. 337-355, 1997.
[18] M. Kotabe, X. Martin and H. Domoto, "Gaining from vertical partnerships: knowledge transfer, relationship duration, and supplier performance improvement in the U.S. and Japanese automotive industries," Strategic Management Journal, vol 24, pp. 293-316, 2003.
[19] J.K. Liker, R.R. Kamath, S.N. Wasti and M. Nagamachi, "Supplier involvement in automotive component design: are there really large US Japan differences?," Research Policy, vol 25, pp. 59-89, 1996.
[20] T.Y. Choi and J.L. Hartley, "An exploration of supplier selection practices across the supply chain," Journal of Operations Management, vol 14, pp. 333-343, 1996.
[21] H. Hernesniemi, Successful subcontractor 2015: Vision and actions (In Finnish Menestyvä alihankkija 2015: Visio ja toimenpiteet). Finland: Teknologiateollisuus ry, 2007.
[22] D.M. Lambert and M.C. Cooper, "Issues in Supply Chain Management.," Industrial Marketing Management, vol 29, pp. 65-83, 2000.