1. SUPPLIER DEVELOPMENT PROGRAMME
POWERED BY: UNDP, PAKISTAN
Building Comprehensive Markets
& Generating Equitable Growth
M Bilal Khattak SDP Consultant

2. CONTENTS
 What is SDP?
 Mission &Vision
 Why SDP?
 EstimatedTime with Stages
 Methodology
 What SDP offers to Lead Company and SupplierCompany?
 Requirement for ParticipatingCompanies in SDP
 Cost, support & subsidies for Lead Company & Supplier Companies
D EV E L O P M E NT P R O G R A M M ES U P P L I E R

3. WHAT IS SDP?
D EV E L O P M E NT P R O G R A M M ES U P P L I E R
What is Supplier Development?
 Supplier Development is the process of working with certain suppliers on a one-to-one basis to
improve their performance (and capabilities) for the benefit of the buying organization (Lead
Company).
What is UNDP – SDP (Supplier Development Program) ?
 UNDP Pakistan aims to Implement system through SDP:
 That transforms the business relationship between a Leader Enterprise (Large and Medium) and
its suppliers
 Enhance the Pakistani economy by strengthening the competitive capacities of different sectors
Main Objectives of SDP
 To increase the social and economic profitability of participating enterprises
 Promote the incorporation of latest technologies, teamwork, entrepreneurial and associative
integration practices in the companies that promote their development and give them a long-
term viability.

4. SDP MISSION &VISION
 To Contribute to increased
competitiveness and creation of
decent work in small and medium
enterprises in Pakistan
 To strengthen value chains, based on
the implementation of an efficient
methodology
 To build strategic relationships with
supply companies demanding goods
and/or services
D EV E L O P M E NT P R O G R A M M ES U P P L I E R
“Become a lead and reference
programme in development of
suppliers for Pakistan, that helps
improve the performance of strategic
sectors and generates opportunities
by articulating them with the market,
through capacity building of small and
medium enterprises”
MISSION VISION

5. WHY SDP?
D EV E L O P M E NT P R O G R A M M ES U P P L I E R
The Supplier Development Programme can:
 Reduce the Cost: Cost reduction that helps to maintain the supplier’s profit margin
 Resolve Serious Quality issue: Quality improvement that both reduces reject costs and/or increase
reliability of buyer’s goods or manufacturing processes
 Develop new routes to supply
 Ensure quality control at supplier locations
 Increase profitability of all the participants in the chain:
 Boost Company Sales
 Develop a product or service not currently available in market place
 Generate competition for a high price product or service dominating market
 Improve business alignment between the Lead Company and Supplier
 Better Policies, Purchasing Practices, Strategy, and trained people to replicate the SDP to the rest of
the production chain

6. STAGESWITH ESTIMATEDTIME
D EV E L O P M E NT P R O G R A M M ES U P P L I E R
Promotion &
Formalization
Stage 1 Stage 2 Stage 3 Stage 4
Implementation
& Follow Up
Stage
Stage 5
Documentation
&
Systematization
Stage 6
Diagnosis Interaction
Design
Implementation
Plan
10 Months
Month 8-10
Stage 1 Stage 3 Stage 5
Stage 2 Stage 4 Stage 6
Month 0-1
Month 1-3
Month 3-4
Month 4-5
Month 5-8
S
D
M
WIN
WIN

7. HOW DO WE DO IT?
D EV E L O P M E NT P R O G R A M M ES U P P L I E R
• Establish Strategic
Line of Action
• Agree on Activities
• Set Common
Goals
Promotion &
Formalization
• Identification of
Buying Process
• Identify
Improvement
Opportunities
Diagnosis
• Validate Diagnosis
• Set Priorities
Interaction
•Establish Improvement
Plan
•Establish Work plan &
Responsibilities
Design of
Improvement Plan
•Implementation of
Improvement Plan,
Action Plan and Action
Lines
Implementation
•Documentation of
Results
•Analysis for possible
replicability
Documentation &
Replicability
SDP Comprise of Six Stages
1 3 5
2 4 6

8. HOW DO WE DO IT? (CONTINUED…)
D EV E L O P M E NT P R O G R A M M ES U P P L I E R
 In order to create a win-win situation
through SDP:
 One orTwo SDP Consultants intervene a
Production/Value chain
 Duration : ± 10 Months
 Production/Value Chain
 1 Lead Company, (LC)
 Up-to 10 SupplierCompanies, (SC’s)
 One orTwo SDP Consultants
 Specialized Consultant (Where Required)
 Supplier Development Methodology
(SDM) is implemented
 Later the Leader Enterprise continues to
implement SDM with rest of supplier(s) in
chain.
LC
SC
SC
SC
SC
SC
SC
SC
SC
SC
SC
Value Chain
One orTwo SDP Consultants
WinWin
SpecializedConsultants

9. WHAT SDP OFFERSTO LEAD COMPANY AND
SUPPLIER COMPANY?
Lead Company achieves
 Develops more reliable suppliers on price,
quality, delivery times, services…
 Improves LC productivity by greater
performance thanks to reduction of faults
and delays
 Better policies and purchasing practices
 Flexibility in its supplies
 Strategy, SDP Manual, and trained people to
replicate the SDP to the rest of the
production chain
Supplier Company achieves
 Vision and clarity about its sales (it allows
investments/ improvement projects)
 Increases sales and/or profits
 More competitive prices
 Improves customer satisfaction: price,
time, quality, service,Technical assistance
 Culture of quality and continuous
improvement
D EV E L O P M E NT P R O G R A M M ES U P P L I E R
ASSC : Assessment System of Supplier Certification
Certification itself by Lead Company to its Supplier Companies

10. WHAT SDP OFFERSTO LEAD COMPANY AND SUPPLIER COMPANY?
(CONTINUED…)
D EV E L O P M E NT P R O G R A M M ES U P P L I E R
LongTerm
Corporate Supply
(Globally)
Certainty
Joint Investment
Strategic Partners
MidTerm
Training & Information
Communication
Technical Assistance
ShortTerm
DeliveryTime
Timely Payment
Quality
Flexibility
Cost Reduction
Competitive Price
• Outcome Levels: SDP investment must show specific Returns.
SDP Perspective: Measure Short-term Activity, Mid-term pipeline and Long-term growth
• Building Trust: Flexible relation and communication, between Lead Company and Supplier Company
• Information and linkage with support institutions to develop SME´s

11. REQUIREMENT FOR PARTICIPATING COMPANIES IN SDP
D EV E L O P M E NT P R O G R A M M ES U P P L I E R
Not reluctant to involve different areas/departments of the company
Wish to Improve purchase practices and promote Plans of Improvement
Timely Delivery of required information for diagnostic, impact assessment and subsidy
Legalization: Wish to change/Implement legislation, regulation, systems or procedures
Improving environmental performance and sustainability within the supply chain
Wish to Implement SupplierCertification System (for Lead Company)
Market Access: Have no Links with sustained market and have limited BusinessVision
Finances: Limited access to Financial resources and have Poor Financial Controls
Operation: Have Low quality products, under-developed process and Non Calculation of Production costs
Formation of groups without strong links and Limited distribution of responsibilities

12. COST, SUPPORT & SUBSIDIES FOR LC & SC’S
D EV E L O P M E NT P R O G R A M M ES U P P L I E R
Description Small Company Medium Company Large Company
No of Employees 10-35 36-99 100+
Productive Assets 2-20 Million PKR 20-40 Million PKR 40 > Million PKR
Company Supplier Company Medium Lead Company Large Lead Company
Cost of Implementing SDP 135,000 PKR 450,000PKR 900,000 PKR
Signing the
Agreement
Delivery of the
Diagnostic
Delivery of the
Improvement Plan
Implementation
progress of
Improvement Plan (in
half).
Receiving of the Final
Report to satisfaction
of the companies
Payments that will made against following products
20 % payment at each stage mentioned below:
1 2 3 4 5

13. THANKYOU !
UNDP - Supplier Development Program