In mid-2000, United Technologies Corporation (UTC) was two years into a supplier development integration program. The major focus of this initiative was to strengthen relationships with “key” suppliers to fully leverage the supply chain. The qualities sought in the relationships included long-term commitments, confidential information sharing, cooperative continuous improvement efforts, and sharing risks and rewards. Both the nature of these relationships and the associated behaviors were new for UTC and represented a significant challenge. UTC believed it was making progress moving from supplier rationalization toward supplier integration. However, some UTC suppliers believed that they were not receiving any of the gains from these initiatives and viewed UTC as often focused only on cost cutting. UTC’s Global Supply Management organization hoped to investigate individual supplier relationships and address supplier concerns. The objective was to assist high-potential suppliers so that they could improve their performance and, at the same time, align better with UTC’s goals for a more productive and less costly set of reliable supply chain partners.
Darden Business Publishing – University of Virginia