Supplier development through risk assessment. Case study : Whirlpool EMEA

In today’s market the companies are increasingly influenced by international competitors, demanding customers and rapid technological change and this is leading to increasingly complex, dynamic supply networks. Therefore, the enterprises are becoming more dependent on the suppliers, thus actively are investing in supply management, in order to establish strategic alliances against their competitors. However, risk taking is an inevitable aspect of the supply management and for that purpose there is a need of methodology that can assess the risk of the strategic suppliers, but at the same time propose areas for development. With the globalization, the companies are increasing their investments in the foreign countries, thus are dilating among the international borders. Hence, there is a need of a standardized tool, which can be easily utilized among different regions. Therefore, the goal of this research is to: provide a comprehensive literature analysis in the field of supplier development and risk assessment; assess and analyze the main case study and analyze the output of the assessment, compare the findings with the hypothesis set and propose a new model. The literature review is performed in order to understand and give a comprehensive picture of the research performed so far on the topic of supplier development through risk assessment. The outcome of the review facilitated understanding of the literature, pointing out the gaps and providing guidelines for incorporating supplier development through the risk assessment and risk management in a multinational environment. In order to apply the knowledge gotten from the literature and to explore the identified gaps, a research was performed and tested in the multinational company Whirlpool, which is the leading manufacturer and marketer of home appliances. Consequently, there was the opportunity to work with suppliers form different countries, as well as to align with the strategies across different regions. Therefore, the risk management process in Whirlpool is analyzed, with the main focus being on its risk analysis matrix. In order to test the reasonability of this model, it is tested for suppliers in the area of basic technology, focusing on the mechanical components, rubber and packaging commodity. Therefore four hypotheses are set and tested against the model. To present the findings, an example of supplier commodity - quality review is represented, with its focus on the metal stamping sub-commodity, part of the mechanical components. Through this example, the missing gaps in the model are discussed, thus proposals for modification are developed. The proposals are aiming at fully answering to hypothesis set, with the focus on the monitoring across regions, the tools in the risk analysis matrix and its format. As a result, a risk management framework is developed that can be applied in the manufacturing industry, operating internationally, for assessing the risk of the suppliers, as well as identifying their development strategies.