Large scale advanced manufacturers knowingly buy products from "Good Deal Companies"
Advanced manufacturers (your big customers) develop better suppliers from a field of "Good Deal Companies" that are initially considered temporary vendors.
After delivering a quality product for a specified time period a temporary "Good Deal Vendor" may be considered to become an approved vendor designated to receive a set percentage of the advanced manufacturer's business. They are usually considered a second source supplier.
Typically, the advanced manufacturer will audit temporary vendors at the outset and whenever there is a problem such as when a product fails the advanced company's incoming inspection or a field failure of the product in the hands of the end user.
ISO or QS Certification frequently comes to play. The advanced company either requires certification to an outside Quality Business Standard after a specified time period or they show extreme preference manifested in larger orders for certified vendors.
Why do large advanced customers require or pay favor to ISO or QS certification?
Because it is easier and cost effective to deal with only one or two large suppliers
Because structured systems are the only path for small companies to grow into large companies
The goal of standardized products with consistent quality is almost impossible to achieve when using many small suppliers.
Managing many small suppliers means endless meetings with many diverse managerial groups.
Component design changes must be communicated to numerous engineering groups. Each engineering group will interpret each product change differently causing some designs to be defective.
Production lines for each small manufacturer require differing time periods to come up to speed in manufacturing and to become qualified.
Economies of scale will never be realized by a small manufacturer. Cost reduction is limited because small manufacturers can't buy capitol equipment, raw materials and components in large enough scale.
Because of all these factors a large company is seeking large suppliers, and if they do not have a large supplier for a given component they will grow a capable smaller supplier.
