Lean supply: the design and cost reduction dimensions

The objective of this paper is to determine whether the principles of the lean supply model are currently present between an OEM and its key suppliers in the electronics industry. The research focuses on two key dimensions of lean supply – supplier involvement in customer design activities and joint buyer–supplier cost reduction. Although the findings have indicated the presence of some of the principles associated with lean supply in areas such as higher levels of customer and supplier integration in the new product development process and high levels of information exchange in the supply chain, total ‘leanness’ along these dimensions is not currently present. In fact, the research has revealed that considerable barriers currently exist to meeting the requirement of equality between partners and the mutual sharing of benefits. Evidence found here has shown that the majority of benefits accrued from the relationship were obtained by the customer.