Design and development of a supplier evaluation process

Abstract

Low-cost sourcing is a strategy many companies, including Pratt & Whitney, use to reduce part costs. As they increase their efforts to resource products to low-cost regions, Pratt & Whitney needs a robust process to effectively evaluate potential suppliers and identify those suppliers that are most capable of satisfying their manufacturing and business needs. Through the development of a Supplier Evaluation Process, this need is realized and a case study is presented that highlights the use of such a process. In addition, the topic of trust in buyer-supplier relationships is also explored. Through the process of developing new suppliers, Pratt & Whitney invests time, labor, knowledge and skills that they have developed to quickly improve a new supplier's business and manufacturing capabilities. The methods that Pratt & Whitney uses to accomplish this task, as well as the risks that they are subject to, are closely linked to what is deemed in the literature as trust building activities. This thesis seeks to understand the role of trust in the buyer-supplier relationship that Pratt & Whitney creates with low-cost sources and to highlight the benefits that Pratt & Whitney realizes as a result of these relationships.