Hartley et al 2002

Hartley et al 2002 - Chrysler Leverages Its Suppliers'...

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Chrysler Leverages Its Suppliers’ Improvement Suggestions Janet L. Hartley, Bertie M. Greer,  Seungwook Park Maritza Carroway Andrew Bridges
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Noteworthy Chrysler saved over 2 billion dollars throughout its entire supply chain by managing its supplier relationships more closely. Chrysler motivated suppliers through monetary incentives and added benefits(e.g. Chrysler allowed suppliers to keep 50 percent of any savings attained that exceeded their annual SCORE cost-reduction goals). However, when interviewing suppliers, monetary gain was hardly mentioned. Suppliers tended to focus more on Chrysler’s collaborative attitude as the primary motivator for participating in SCORE(Supplier Cost Reduction Effort).
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SCORE “Supplier Cost Reduction Effort” Chrysler began program in 1989 to save money, reduce waste, and encourage suppliers to improve Initially only for first-tier suppliers, but by 1998 it incorporated all of Chrysler’s direct suppliers SCORE program was designed to seek improvement proposals from suppliers, analyze/evaluate the proposals, and finally make sure the approved proposals were implemented Chrysler wanted to move away from adversarial relationships and work toward more collaborative
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SCORE Every year Chrysler set SCORE goals for suppliers In 1998, the SCORE goal was for all first-tier materials suppliers to reduce costs by 5% Chrysler encouraged suppliers to look for saving in 7 key areas As soon as Chrysler approved a SCORE proposal, the supplier had to immediately reduce the price it charged the company
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Research Approach Researchers gathered data from Chrysler personnel and representatives from 6 first-tier materials suppliers Two of the suppliers produced metal products, and the other four produced interior systems for Chrysler Used both phone and in person interviews, then analyzed the responses using open-coding qualitative research techniques
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Element’s Contributing to SCORE’s Success Four key elements in both Chrysler and
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This note was uploaded on 07/02/2011 for the course MGSC 487 taught by Professor Jayaram during the Spring '10 term at South Carolina.

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Hartley et al 2002 - Chrysler Leverages Its Suppliers'...

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