INTRODUCTION

Supply Chain Management (SCM) is the key to success in todays business. Companies in variety of business are focusing on how to develop SCM to generate high profits and also maximize customer satisfaction. Shukla et al. (2011) address the definition of supply chain management as a process of networking which can be produce source of materials and deliver into goods and create final products and then deliver to end-customers through distribution network and services. Moreover, it provides greater value of goods and service to the customers. SCM is tactical concept combining sources of production, suppliers, manufacturers, retailers, assembly and inventory distribution together into process. These would be integrated to create higher level of efficiency and ensure that it is deliver accurate amount of products demand at the right time and the right place by utilising minimum level of cost and getting through the maximum of customer satisfaction. This paper describes the theoretical context of suppliers development in practical concepts and its impacts. Also, include principle of supplier development program of Nissan.

Figure 1: Supply chain diagram (Faith Consistent Investing: 2008) 1

SUPPLIER DEVELOPMENT
Definition of Supplier development Supplier development describes the relationship of working process between organization and its suppliers. Major objectives of supplier development are improving current suppliers and increase their performances in terms of production capacity. (Southey and Newlands, 1994:439). Daniel and Lisa (1997) suggest that this concept might combine the evaluation of informal supplier and improved performance is required to extend suppliers performance by providing employees training within suppliers firm and invest in operational process of suppliers. The outcome of suppliers developments has broken as follows; (Hines, 2004:156) Minimum of cost (cost-efficiency). World-Class supplier. Supply chain commitment. Greater value in structure approach. Cross-functional between company and suppliers. Elimination of wastes. Tactical approach in purchasing teams.

Selecting Suppliers for Development Selecting suppliers is one of major consideration of company to develop manufacturing process at maximum requirement, which suppliers should have ability to create extension of products and services cover company requirements. This involves seven steps activities consisting of. (Handfield et al. 2009: 237)

Figure 2: Selection of supplier: The critical steps involvement (Handfield et al. 2009)

Supplier Development process Krause and Handfield (1999) address the significant approach of supplier development successful is reaching four key areas of development to become worldclass supplier. At this point, supplier development is broken into 4 stages includes; supplier selection and identification base with rational processing, problem solving at stage two and proactive development to reach continuous improvement as a goals. Detail in each steps are described as figure 3 below;

Figure 3: Supplier Developments Model (Krause and Handfield 1999:9)

Importantly, another model of supplier development illustrated by Burt et al. (2003) is should be concerned. This process has six stages includes, initiate, map and measure, process development, achieve result, control, and team recognition as presented, described in figure 4.

Figure 4: Supplier development process (Burt et al. 2003:522)

Early Supplier Involvement (ESI) ESI is the process of initial stage of co-operation between company and suppliers; especially in product development and innovation at conceptual design level (Bidault, 1998). Top level of ESIs goals is taken full task in design and conceptual process to develop products in a part or sub-assembly into manufacturing process. (Brindley, 2004:118). Figure 5 provides an overview of various integration as ESI evolves.

Figure 5: Five Level of ESI Involvement (Brindley, 2004:118). Barriers to supplier Development There are many barriers to supplier development: (Burt et al. 2003:534) Poor communication and feedback. Misguided improvement objective. Lack of clarity commitment. Misaligned sourcing and performance. Lack of trust. Concealment of problem. Legal issue.

Nissans COGENT
Overview of Nissan Company Nissan was found in December 1933 with the name of Jiidosha Seizo Co Ltd. At the beginning, it is Japanese company which entering in automobile industry and expands to worldwide business. In late 1934, the name was changed to Nissan Motor Co.Ltd. The company created Datsun brand as initial vehicle product. Nissan (Japan) was successful in automobile manufacturer business guarantee by the 3 rd rank in Japan and top5 rank in the world. Then, company associated with Renault SA, car manufacturing from France in 1999 to generate high profit and determine growth of partnership business through national group. Production centre are located in Japan and full-function of facilities was in US, UK, Mexico and Spain. Situation analysis Nissan is facing the trouble of NX96, workshop program from Nissan to provide training program to suppliers, in terms of trustworthiness. Suppliers are in uncertain situation in terms of expectation and contribution because this is the first program to provide the information to suppliers. And, Nissan confront with the multiple of challenges from different suppliers because suppliers create wide-range of technologies. Various suppliers are perceived in different way of perceptions toward Nissan and these are result at lowest level performance as a threat of Nissan. Therefore, Nissan decided to implement NEXT21 instead of NX96, suppliers meets world-class quality standard together with a defect rate of 10ppm. However, perceptions of public toward Nissan in terms of vehicle branding and quality were undertaken which lead to become under its competitors position.

European Perception of Quality

90%

91%

92%

98%

Figure 6: European Perception of Quality (Nissan Case Study VDO) Nissan is concerned only the 1st tier suppliers at this stage and expected 1st tier suppliers to deliver this process to 2nd and 3rd tiers suppliers but it is unexpected because 1st suppliers failed to develop this to another. Purpose of Nissans COGENT COGENT is Nissans workshop program that found on December 1995. It stands for Co-development regeneration tool. It is the joint-program between Nissan European Technology Center, Suppliers, and Cranfield University, which supported by DTI and funded-raising from Innovative Manufacturing Initiative (IMI) (the ENGINEER 2000). The COGENT runs this program after Nissans NEXT21 program was completed. Main objectives of this program are to develop communication and understanding to suppliers and Nissan, at the beginning stage (Southey 2010). Company plans to reach its goals that is developing higher quality and cost efficiency of the product to survive and thrive in the market. The main concepts and implementation of COGENT includes:

1. Early Supplier Involvement The engineer (2000) suggests that 80% of cost, quality and performance of manufacturing company come from design and development areas. Thus, Early supplier involvement is necessary for COGENT. This process describes the participation between company and suppliers at the initial stage of design production and product development before start actual implementation. (Monczka and Trent 1995: 42)

Figure 7: Design and Development (Southey 2010) 2. Establishing long-term relationships Creating long-term relationship toward suppliers is benefit for company to reduce controversy issue and create customer trust and with loyalty. It also benefits to improve overall quality, process outcome and cost effectiveness. (Kalwani, 1995)

Figure 8: The Co-development Chain (Southey 2010)

3. Fast Track

Fast track is one of major tools to draw suppliers into early stage of development process. It creates variety of perceptions, processes and targets to work together between suppliers and customers. Furthermore, mutual activities in COGENT assisted to measure the effectiveness of design and system improvement to protect the occurrence of defection.

Figure 9: Cogent fast track system (Southey 2010)

Performance measure Company need to develop essential tools to measure, manage and develop supplier base performance. These measurements consist of collecting and providing information, rating scale of suppliers performance and daily basis measurement. (Raju, 2008:27). Nissan developed the tools and processes to support suppliers to reach QCDDM commitments. Quality, Cost, Delivery & Management are required to measure and compare to non-cogent suppliers (Just-Auto 1999). Each element has rated and measure in percentage. (Holroyd, 2003:38)

Case Analysis
Success COGENT was successful in 1st tier suppliers with 89 firms and 900 people participate with these activities. Nissan COGENT program is benefit between Nissan and suppliers in cost efficiency and time reduction areas. The increasing of quality and management relationship in comparison graph is shown at figure below;

Figure 10: Comparative Analysis of Various Approaches (Case Study VDO)

Failure It is clear that COGENT process in 1st tier suppliers derive successful of COGENT activities. 2nd and 3rd tier suppliers are lack of supporting from 1st supplier in terms of design and development capacities, which is largely critical issue (Just-Auto 1999). These group of suppliers are also expect to gain knowledge and information to develop their performance regarding to Handfield et al. (2000) observe, One of the biggest challenges in supplier development is cultivating mutual trust. So create trustworthiness among each supplier is essential to develop the selection criteria of supplier to create successful in suppliers performance of Nissan.

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Risk Obvious risk that might occur was after Nissan provides completely development training might be occurring when suppliers obtain higher opportunity to create competitive toward other companies. Nissan must protect themselves against the critical issues between company and suppliers. Usually, contracts are primary consideration for Co-operation Company to generate business with each other (Dyer, 1996). However, trustworthiness is more effective and minimise cost of investment (Hill, 1995). Another risk is Trustworthiness between each party. For example, 1st Tier may concern about being taken over by the 2nd Tier if they provide a lot of information. Therefore, Nissan should be careful of utilising these methods to find out problem solutions such as involvement directly activities, giving incentives and rewards and create rules and regulations to the suppliers (Monczka et al. 2010: 235).

Nissans Future Trend Nissan should develop its information in terms of intellectual properties, people, information, and other assets. This would be focus on core competency of product and retain its flexibility (Carter et al. 2000). Nissan provide information sharing through the Information and Communication Technology (ICT) (Hines, 2004:25) to keep updating with all companies in global and gain quick respond.

Conclusion
To success in the effectiveness in the world market, Nissan should create strong network to suppliers and measure their actual performance regularly. Supplier development program maintain the network and improve various suppliers in the same directions, as Nissan require. The ability of suppliers is necessary for Nissan to develop product and services and brainstorm with suppliers to create mutual benefit together and reach to company goals.

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