Towards System Supply : Development of Small and Medium-Sized Contract Manufacturers

Sammanfattning: One way for a small subcontractor to meet increasing global competition is to develop a system supplying ability, implying a transition in the supply chain toward a larger overall responsibility. As large corporations outsource parts of their manufacturing and services, many small and medium-sized enterprise (SME) suppliers are expected to deepen their capabilities and take on the role of system suppliers. The overall purpose of this thesis is to advance the understanding of how SME contract manufacturers can develop such capabilities, identifying demands and abilities in various steps of this process. The research approach is based on the resource-based view.This longitudinal case study of an SME supplier striving to become a system supplier covers the period from 2006 to 2014. The researcher’s role as business developer and member of the management made it possible to follow the company's development continuously and closely, providing access to relevant internal data complemented with internal and external semi structured interviews and focus discussions. The longitudinal aspect is evident in the overall description of the development of the focal supplier. More specific issues are covered in the separate studies, described in the appended articles.SME suppliers need basic capabilities of qualitative production performance as stepping-stones to develop more system supplier capabilities for added customer value. Development of stable production processes through lean implementation was by the focal supplier seen as a way to reach stable basic performance and to enable continuous development. The study further shows that knowledge integration with customers is an effective means to build system capability and indicates a stepwise and sequential process of developing specific supplier capabilities.The longitudinal case study deepens the knowledge of development of SME system suppliers and specifically point out three prerequisites that need to be in place for the supplier transition: (1) a capability of the supplier to manage internal processes of standardisation and continuous improvements for stable performance without disruptions, (2) a capability to collaborate in development projects with a limited number of customers, and (3) customer commitment to a long-term relationship. A customer demanding improvements is constantly driving its suppliers to better performance and proven supplier capabilities in turn promotes long-term customer commitment. The most essential component in supplier development is a competent and strategically oriented management, capable of identifying the specific system supplier offerings appropriate for the particular company in order to create customer value.This study contributes to better understanding of the conditions of medium-sized contract manufacturing SMEs, from a supplier perspective, and contributes to SCM research in illustrating how shifting responsibilities and subsequent activities in the supply chain may pave new competitive paths for SMEs. One issue here is the importance of knowledge integration for the development of supply chains. This has not often been discussed within SCM and thus provides a contribution to this theory.