A common statement made in some supply management organizations is, We cant be spending money on supplier developmentwere not in business to train suppliers and do their job for them! Discuss this statement referring to the case study on Honda given above.

Honda of America Manufacturing (HAM), with several production and assembly locations in Ohio, strongly commits to longer-term relationships and supplier development with its suppliers. Long-term supplier viability is critical to Honda's profitability. First, the company fully commits to its suppliers for life. When Honda signs a sourcing contract with a supplier, it expects to maintain that relationship for 25 to 50 years. Second, the company buys 80% of the cost of every car from outside suppliers, the most of any automotive producer. Honda, therefore, commits a significant amount of its resources toward managing and developing local suppliers to ensure Honda has access to capable suppliers that can continuously meet the company's stringent performance standards. Supplier development and improvement has one primary objective at Hondato create and maintain a dedicated supply base that supports Honda's U.S. requirements. Pursuit of this objective requires a substantial commitment of resources to support and develop its suppliers: Two full-time employees help suppliers develop their employee involvement programs. Forty full-time engineers in the supply management department work with suppliers to improve productivity and quality. Over 100 engineers in the quality control department deal with incoming parts and supplier quality issues. Honda provides technical support to suppliers in a number of technical areas, including plastics technology, welding, stamping, and aluminum die casting. Honda forms special teams to help suppliers on an ad hoc basis. One supplier, for example, experienced problems resulting from rapid growth. Honda formed a four-person team that moved to the supplier's town for nine months to help correct the problems. A Quality-Up program targets suppliers with lower quality. Honda works directly with the suppliers top management team to ensure that the supplier produces a 100% quality product. Honda has a loaned-executive program where it sends various executives to work at the supplier's location. This supports greater understanding and communication between Honda and its suppliers, as well as creating long-term commitment and loyalty. However, most companies are not willing to provide this level of attention and dedication to supplier management and development. A company that maintains either a laissez-faire or a reactive approach to supply base management is probably not willing to provide the necessary resources to support ongoing supplier development