Capability building and Evolutionary path of Second tier suppliers

Abstract

This study develops a framework of capability building and evolutionary path of second tier suppliers. The foundational framework that has been accepted for capability assessment of automotive parts suppliers was a series of researches by Dr. Asanuma Banri. He proposed the concept of “relational skill” to be used as the capability of parts suppliers to effectively respond to car manufacturers’ requests for parts supply, and product design capability, in particular, was positioned as the core of relational skill. Asanuma’s viewpoint of assessing parts suppliers’ capability by the presence or absence of product design capability could make sense since the burden of R&D for car manufacturers is greater than before. However, his evaluation framework has the following two points that need further consideration. Firstly, his framework derives from the relationship between car manufacturers and first tier suppliers. Secondly, Asanuma’s framework is strongly influenced by the viewpoints of those who place orders. Taking into account that our target is second tier suppliers, we have to clarify the following two points, namely the relational skill needed for second tier suppliers and their own business viewpoints other than the relational skill. We conduct a series of interviews with first and second tier suppliers to address the agendas. Through the interviews, we have understood that process design and domain design are also critical as well as product design in terms of evolutionary path of second tier suppliers. Consequently we propose the evaluation framework consisting of product design capability, process design capability and domain design capability.