Enhancing technological capability through supplier development: a study of the UK aerospace industry

The current trend in manufacturing industry is for large companies to focus on core competencies and to outsource more design and manufacture. Combined with the rationalization of the supplier base, this has meant that companies are increasingly dependent on key suppliers to continue providing competitive subsystems and sub-assemblies which incorporate advanced product and process technology. Suppliers in turn are reliant on their customers for information for innovation. This paper discusses the potential to enhance the technological capability of the supply network through supplier development schemes. Case studies of supplier development in the UK aerospace and defense sectors are presented in order to establish whether supplier development is enhancing technological capability in small companies in the UK supply base. The formal processes of supplier development are found to have little direct impact on supplier technological capability, but instead have an important indirect effect-primarily through strengthening relevant communication channels. There remains an opportunity for large companies to utilize supplier development to promote better technology management practices.