Managing with technology: a predictive information system for remote supplier development

Abstract

In technology-based enterprises, the achievement of networked and virtual organisations relies heavily upon the capability to develop suppliers and sub-contractors. While in many cases, suppliers are compliant and will embrace most initiatives in order to maintain contractual relationships, they often do so at additional cost to themselves. Traditional interventions such as second or third party audit, or other criteria-based assessments tend not to achieve genuine and sustained supplier improvement. Moreover, the more recent self-assessment movement is difficult to resource in many supplier organisations because of their (small) size and their remoteness of location. To this end, the paper details the use of software systems to act in quasi-consultancy mode, by predicting the likely organizational outcome of current management practices. Since the target users are senior managers in these small organisations, it is intended that the reflective style of the system will stimulate genuine learning. The paper discusses the process of developing the predictive system and the validation of predictions to-date in around 100 companies, predominantly employing less than 500 people. The current predictive accuracy of the system is over 80%. If companies were to heed these predictions there would be a marked change in their management practices and in the resultant competitiveness of the majority.