The role of customer relationships in the growth of small‐ to medium‐sized manufacturers

Abstract

This work is focused on small-to medium-sized manufacturers (SMMs) within supply chains and, in particular, on how such SMMs develop effective working relationships with customers. Development of a model based on the literature was followed by a mail survey, augmented by semi-structured interviews with SMMs. Factor analysis and multiple regression analysis were used to provide an understanding of the underlying processes.The current issue and full text archive of this journal is available at http://www.emerald-library.com/ft 428 effectiveness in these activities will lead to growth of the SMM. The research also developed hypotheses to support this underlying premise.Theoretical and empirical bases of the role of SMMs in supply chains Research on factors affecting growth of SMMs has focused primarily on such areas as entrepreneurial personality, organization development, functional management skills and sector economics (Chaston, 1998;Wijewardena and Tibbits, 1999). More recently the paradigms of competition and, particularly, supply chain management, have led to increasing recognition of interdependencies that exist between firms in supply chains (New and Mitropoulous, 1995).However, the supply chain literature has been largely biased towards policies and activities which large firms do, or should do, to develop their supply base. New (1996) emphasizes that as long as supply chain research is dependent on large manufacturing firms and on a single industry (automotive), there are few prospects for the development of a broadly applicable theory. It is not just research which exhibits such bias: the UK Department of Trade and Industry (DTI) has issued a series of``best practice'' cases and booklets on supply chain management which focus almost exclusively on large companies. (For an overview, see New, 1996.) Empirical work on inter-organizational relationships has led to a general agreement that various forms may emerge as responses to various forms of uncertainty and dependence. (See, for example, Heide and John, 1990;Bensaou and Venkatraman, 1993.) Turnbull and Cunningham (1981) showed that there are eight major groups of tasks suppliers must perform in order to be an acceptable supplier and on which they are evaluated by customers. These include customer orientation activities, technical competence, flexibility, price competitiveness and organizational effectiveness.The literature on links between supplier-customer relationships and performance provides a mixed picture. (See, for example,

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