The Effects of the Supplier Relations Strategy (SRS) on the Technical Capability of Suppliers (TCS): A Case of Korean Automobile Industry

Abstract

The supplier relations have become a primary concern as a source of the competitiveedge in the automotive industry since Japanese automakers showed strong competitive power. Japanese automakers enjoy unique, effective supplier relations in their country

and many non-Japanese automakers have begun to restructure their supplier relations since 1980's. There has been a certain concensus that the competitiveness of an automobile assembler is not that of the company alone but that of the production network which

comprises the automobile assembler and the whole suppliers.

Then the technical capability of parts suppliers which determine quality and costs of parts becomes very important. Especially, when the ratio of parts purchased from external suppliers is comparatively high like in Japan or Korea, the technical capability of supplier becomes much more important.