STRATEGIC SUPPLIER SEGMENTATION - THE NEXT BEST PRACTICE IN SUPPLY CHAIN MANAGEMENT

This study of 453 supplier-automaker relationships in the U.S., Japan, and Korea examines the extent to which automakers manage their ''arm' s-length'' and ''partner'' suppliers differently. The findings indicat e that U.S. automakers have historically managed the majority of their suppliers using an arm's-length model, Korean automakers have managed suppliers primarily as partners, and Japanese automakers have somewha t different relationships with suppliers depending on the nature (i.e. , degree of asset specificity and value) of the component. Only Japane se automakers have strategically segmented suppliers in such a way as to realize many of the benefits of both the arm's-length as well as th e partner models. Firms should think strategically about supplier mana gement and should not have a ''one-size-fits-all'' strategy for suppli er management.