Framework of Manufacturer and Supplier Relationship in the Manufactured Housing Industry

Abstract

In an increasingly competitive marketplace, purchasing and supplier relationships are becoming a strategic function and a key factor for supply chain management in the manufactured housing (MH) industry. However, little research has been conducted in the field of supply chain management focusing on the manufactured housing industry. In this paper, key supply chain relationships and the critical issues in terms of supplier relationship have been identified, and a new framework of a supplier relationship management (SRM) called the manufacturer-supplier relationship optimization model (MSROM) has been developed. Specifically, the MSROM framework identified a variable supplier lead time, an inconsistent safety stock level, and a poor supplier evaluation process as the key constraints of the efficient supply chain performance. As a result, taking into account the supplier’s performance, a theoretical optimal level of safety stock was investigated and a new algorithm that adjusts lead time forecast with consideration of related risk factors and new supplier performance evaluation method has been developed. The proposed strategic MSROM frameworks and the specific optimization models together contribute to achieve a significant improvement in supply chain performance for the MH industry.