An investigation into supplier development activities and their influence on performance in the Chinese electronics industry

Abstract

Many companies now recognise the importance of supply chain management activities in determining overall performance. A key area for concern is strategic supplier development. A survey was conducted of companies in the Hong Kong electronics industry examining the role of supplier development activities in the context of buyersupplier performance (BSP). Results from statistical analysis highlight five factors, which proved to be significantly related to BSP improvement; effective communication, direct supplier involvement and trust proved to be directly related, whereas supplier evaluation and supplier strategic objectives proved significant when mediated via direct supplier involvement. The results should be of interest to Western companies when considering the establishment of a Far Eastern presence, particularly those involved in outsourcing. In addition, a framework for academics researching supplier development and BSP improvement is provided. Finally, practitioners will gain an insight into how specific supplier development efforts can result in improved performance outcomes.

The role ofguanxiin buyer–supplier relationships in Chinese small- and medium-sized enterprises – a resource-based perspective

“…Having the appropriate upper level guanxi, was shown to help prevent a sudden loss of business to competitors. Moreover, this study also confirmed that guanxi has the potential to reduce transaction costs (Standifird and Marshall 2000;Park and Luo 2001;Millington, Eberhardt, and Wilkinson 2006), a smoothing effect on transaction arrangements between the buying and supplying firms (Davies et al 1995;Leung, Wong, and Wong 1996;Nassimbeni and Sartor 2006;Lee and Humphreys 2007;Humphreys et al 2011), a potential to enhance corporate reputation through guanxi networks (Davies et al 1995;Yi and Ellis 2000;Standifird 2006;Fan 2007) and the capacity to provide access to resources in general terms (Davies et al 1995;Xin and Pearce 1996;Pearce and Robinson 2000;Yi and Ellis 2000;Su, Sirgy, and Littlefield 2003).…”

“…Establishing a high 'quality' guanxi was also confirmed to be a socially complex process which requires continuous communication, face-toface interaction and a high degree of sociability in order to strengthen the connections and establish the required ganqing as well as mutual trust (Yeung and Tung 1996;Fan 2002;Ramasamy, Goh, and Yeung 2006;Wong et al 2007;Humphreys et al 2011).…”

“…Within the literature, mutual trust was also argued to be a further social barrier mechanism (Dierickx and Cool 1989;Barney and Hansen 1994;Humphreys et al 2011). While new guanxi tends to have no or low trust within the relationship, existing long-term guanxi, with several prior cooperations and interactions, tends to have mutual trust in it (c.f.…”

Towards dynamic contract extension in supplier development

“…Benefits resulting from supplier development include, e.g., improvements in cost efficiency, product quality and/or lead time [17,25]. However, [23] note that firms' success in supplier development varies.…”

Partner selection in agile supply chains: a fuzzy intelligent approach

“…Humphreys et al, (2011) pointed out that the key area of supply chain management activities for concern is strategic supplier development. Based on statistical analysis of a survey in in the Hong Kong electronics industry, they examined the role of supplier development activities in the context of buyer-supplier performance and found that effective communication, direct supplier involvement, trust, supplier evaluation and supplier strategic objectives are the five key factors.…”