View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Hiroshima University Institutional Repository 【Article】 65 Critical Elements of Supplier Development in the Malaysian Automobile Industry: Parts and Components Procurement and Supplier Development Practice at Proton Rashid ABDULLAH Graduate School for International Development and Cooperation (IDEC), Hiroshima University, Japan E-mail:
[email protected] Keshav Lall, MAHARJAN Associate Professor, Graduate School for International Development and Cooperation (IDEC) Hiroshima University, Japan. Email:
[email protected] Abstract Supplier development is defined as any effort of a buying firm with regard to its supplier to increase the performance and/or capabilities of the supplier to meet the buying firm’s supply needs. The procure- ment practice of the buyer is critical and acts as a window to nurture the supplier development effort, it is also crucial in determining the type of relationship that the company has with its suppliers. This paper examines the procurement practice at PROTON for parts and component inputs at the domestic level. To improve the existing buyer-supplier relationships it is first necessary to review the procurement prac- tices of the firm. The effort to improve the relationship will usually include key suppliers as joint prob- lem solvers utilising problem-solving models the firm’s attitude towards suppliers may change from confrontational to one of trust and partnership. However, the improvements and solutions for the prob- lems rely not only on the buyers’ side, but also on the suppliers’ side. This paper (1) discusses the importance of supplier development, (2) reviews literature to identify potential critical elements of sup- plier development, and (3) discusses the procurement practice at PROTON-the first national carmaker in the Malaysian automotive industry.