Strategically managed buyer–supplier relationships and performance outcomes

Abstract

An empirical analysis of purchasing's strategic role in the firm is presented. This study uses data collected from high level purchasing executives at the Director/VP level representing a large cross industry sample of 739 firms. The data analysis is rigorous. Using data from 571 of the 739 firms, correlation analysis and exploratory factor analysis is performed. Data from the remaining 168 firms is used to conduct structural equation modeling. This is the first attempt to examine a structural model of strategic purchasing and its influence on supplier evaluation systems, buyer–supplier relationships, and firm's financial performance. Scales are developed to measure each construct and are shown to be reliable. Five hypothesized relationships are presented and supported by the literature. The first, second, and third hypotheses link strategic purchasing to supplier evaluation systems, buyer–supplier relationships and firm's financial performance, respectively. The fourth hypothesis links supplier evaluation systems to buyer–supplier relationships. And, the fifth hypothesis links buyer–supplier relationships to firm's financial performance. The results of the data analysis provide support for each of the five hypotheses above. The implications of this research are that a strategic purchasing function is important to the success of the firm. Firms that have a strategic purchasing function are more likely to implement a supplier evaluation system. This provides purchasing with a better understanding of which suppliers are performing well and which suppliers are not performing well. Increased emphasis on strategic purchasing and supplier evaluation systems are critical for firms seeking to establish long‐term relationships with their suppliers. Based on the findings of this study, strategically managed long‐term relationships with key suppliers can have a positive impact on the firm's financial performance.

Supply chain integration, quality management and firm performance of pork processing industry in China

“…The focus of the research is on the pork slaughtering and processing firms 17 and their most important suppliers and customers. The approach of surveying the firms' top purchasing and supply management executives to study buyer-supplier relationships has been widely practised in the field of operations management (Carr andPearson, 1999, Shin etal., 2000). Therefore this survey methodology was employed to set up the quantitative part of empirical research and to collect data to test the hypotheses developed in this research.…”

The Relationship between Manufacturer and Distributors: Knowledge Transfer and Performance

“…Li et al (2011). Past studies like Carr and Pearson (1999), also showed that information access is a key aspect for the buyer-supplier relationship. A manufacturer's team visit to the distributors' facilities can help detection of procedural mistakes and other operational problems that are not possible to perceive only through monitoring distributor performance.…”

Cruise ship suppliers: A field study of the supplier relationship characteristics in a service supply chain

“…Carr & Pearson, 1999;Choi & Hartley, 1996;Corsten, Gruen, & Peyinghaus, 2011;Krause, Handfield, & Tyler, 2007;Salmi, 2006).In our formal interviews, the managers in the supply chain department, when asked to describe their relationship with suppliers, generally concurred that it was a good and interdependent relationship, despite a very demanding environment where the volumes and velocity are high. Good relationships with suppliers are crucial to cruise lines, for the time windows for loading supplies are frozen and no second chance exists for re-supplying the ships.…”