CASE-STUDY - A LEVERAGED LEARNING NETWORK

Growing recognition of the importance of supply chain management has p rompted firms in the automotive industry to adopt new practices, inclu ding tiered supplier partnerships and supplier associations. While the se approaches have been successful in the automotive industry, they ma y not be applicable to all firms. As an alternative, the authors propo se the leveraged learning network. They use the experience of the High -Performance Manufacturing (HPM) Supplier Consortium developed by Alie n Bradley Canada, a manufacturer of electric control panels, to explai n how these networks operate and the results they achieve. The leverag ed learning network is appropriate in cases where the buyer needs to i mprove supplier performance but lacks the power to compel the necessar y improvements. Alien Bradley's initiatives to enhance supplier perfor mance led to the development of a supply consortium; a reorganization culminated in the creation of HPM, a consortium of independent supplie rs whose goal is ''to work together to enable each member to optimize its competitiveness... using shared resources and experience.'' The co nsortium conducts a variety of education programs. A facilitator ensur es that ideas and information flow continously among the membership. A lien Bradley has greatly benefited from the suppliers' efforts to stri ve for world-class standards through reductions in defects, prices, an d lead times; greater conformance to schedules; and better service. At the same time, the leveraged learning network poses difficulties, suc h as the buyer's forfeiture of control over membership and the need to dismiss members who fail to contribute sufficiently to the learning p rocess. The challenge for managers and researchers is to determine the best conditions under which to choose either the tiered supplier part nership approach or the learning leveraged network. While the latter o ffers many potential opportunities, much work needs to be done to expl ore further its coals, benefits, and limitations.