Managing Risk, Innovation, and Collaboration through Supplier Qualification

Capital projects face increased uncertainty and disruption. Given this increasing risk, the ability to innovate and collaborate is of the utmost importance to ensuring positive outcomes in project delivery and performance. Suppliers’ materials and equipment can account for up to 60% of the total project cost, indicating a need to adequately qualify suppliers to ensure they meet project requirements and needs. Whereas suppliers’ materials and equipment can account for a large portion of project costs, much of the qualification research is related to contractors and subcontractors rather than suppliers. Therefore, the objective of this research was to identify and rank-order the qualification factors associated with a supplier’s ability to minimize risk and promote innovation and collaboration. Researchers implemented a Delphi approach, a structured and iterative method, to gain feedback and insights from capital projects industry experts. The outcome of this research was ten rank-ordered factors related to risk minimization, innovation promotion, and collaboration promotion, respectively. For risk, the highest ranked three factors were financial stability, quality management, and technical capabilities. For innovation, the highest ranked three factors were a track record of innovation, technical capabilities, and a culture of innovation. For collaboration, the highest ranked three factors were collaborative relationships, clear communication channels and transparency, and shared goals and objectives. Although these factors were rank ordered, they only achieved moderate, moderate strong, and weak/moderate agreement for factors related to risk, innovation, and collaboration, respectively. These varying levels of agreement indicate the need for additional work to further define and investigate supplier qualification factors. The intellectual contribution of this work is to determine supplier qualification factors associated with risk, innovation, and collaboration. Industry practitioners can use these findings to guide the development of supplier qualification programs that account for additional characteristics to the traditional financial, insurance, and safety record.