It's hard to keep employees motivated, much less a vast network of suppliers. But Harold Plumley, founder of a $70-million industrial-rubber manufacturer, has a solution: a dose of old-fashioned competition.

Every May since 1983 Plumley has invited the top 40 suppliers of Plumley Cos. to a state park in Tennessee for a two-day extravaganza that costs the company $20,000. It features a banquet, golf tournament, magic show, and most important, an awards ceremony. Four prizes are given for outstanding achievement in quality, cost, technology, and market support. "We explain exactly why these suppliers are winners, hoping the others will shoot for those goals next year," says Plumley. His hopes just may have come true. Returns to suppliers have dropped almost 2%, and quality improvements have lowered production waste by another 2%.