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Streamlining the supplier base is a common approach in many US and UK manufacturing companies. However, is this approach being adopted in Germany as fast as it has in the UK? This paper describes research that answers this question and investigates how German companies are managing contacts with their suppliers. The research was conducted in two stages. First, a postal survey of German and UK manufacturers identified the supplier base trends. Second, a follow‐up telephone survey of a random sample of German plants investigated supplier management processes. The findings show that German manufacturers have not reduced their supplier base by as much as their UK counterparts. However, German manufacturers that have reduced their supplier base perceive significant benefits. Currently, many companies appear to have failed to recognize the potential of working with a reduced supplier base.

A key issue for manufacturers is supplier management, i.e. organising the optimal flow of high quality, value‐for‐money materials or components from appropriate innovative suppliers. Many companies now recognise the central role that supplier management plays in achieving long‐term competitive advantage. This paper presents the results of a study of supplier management practices in Germany, contrasted against those in the UK. It identifies a key difference – German manufacturers have not reduced their supplier base as much as the companies in the UK. However, it appears that German manufacturers will be reducing their supplier base in the near future, although they are likely to follow a policy of multiple sourcing rather than single‐sourcing from suppliers. The results of the research have strong implications for German companies as they clearly indicate the potential for performance improvement through the adoption of best practices in the field of supplier management.