Purpose
The purpose of this paper is to examine the relationships between supplier development practices (SDPs) and supplier-buyer relationship practices from the supplier’s perspective (SBRSP), and seek to understand how specific SDPs may impact a buyer’s operational performance as well as supplier-buyer relationship practices.
Design/methodology/approach
The authors conducted a survey of 512 respondents from the different manufacturing firms in India and applied structural equation modelling to test a structural model that proposes the impacts of various efforts of SDPs on a buyer’s performance as well as SBRSP.
Findings
The study concludes that SDPs and SBRSP together improve the relationship between a buyer and supplier, and this improved relationship leads to competitive advantages (CAs) followed by profitability. Results indicate that supplier perspective of buyer-supplier relationship can be improved under the condition of SDPs and SBRSP together. SDPs are driven by productive measure and competitive pressure, whereas customer uncertainty is found to be statistically insignificant.
Research limitations/implications
The study was carried out in North Maharashtra Industrial Zone of India, where the auto sector and machine/components manufacturing firms have been established for a considerable period of time. Results of the study are limited to manufacturing organizations predominantly focussing on the automobile sector and machine/components manufacturing firms.
Practical implications
This study provides significant insights into the specific impact of various SDPs and SBRSP for both academics and practitioners. SDPs along with SBRSP practices lead to improvement in the relationship leading to CAs. SBRSP suggests that trust, long-term commitments and the supplier’s perspective are important practices for relationship improvement.
Originality/value
The current study attempts to identify what are the success factors for the supplier-buyer relationship from the supplier’s perspective and SDPs and how the supplier-buyer relationship can be improved under the condition of SDPs and SBRSP. Hence, the aim is to develop a more thorough understanding of the outcomes of a supplier-buyer relationship improvement from both buyer’s and supplier’s perspective, under the conditions of supplier development to achieve CAs leading to profitability. Furthermore, the study analyses the effect of the improved supplier-buyer relationship for achieving CAs leading to profitability.
Recently, many organisations have recognised that development of supplier and buyer relationship improvement is becoming necessary to establish strong and mutually beneficial long-term relationships in improving performance across the supply chain, generating greater cost efficiency and enabling the business to grow and develop. The current study proposes a framework for buyer-supplier relationship improvement (BSRI) strategy and tests the same using structural equation modelling (SEM). Result indicates that BSRI can be improved under the condition of supplier development practices (SDP) and buyer-supplier relationship practices (BSRP). SDP are further driven by productive measure (PM) and competitive pressure (CP), whereas the impact of customer uncertainty (CU) turned out insignificant. The study results demonstrate that profitability (PR) can be improved by achieving competitive advantages (CA) through BSRI. CA includes operational effectiveness, innovation (INV), technology adaption (TAD) and risk minimisation (RIM). A survey response of 512 different manufacturing firms of India was used for data analysis. Initially, exploratory factor analysis (EFA) is performed for exploring the factor followed by confirmatory factor analysis (CFA), for confirmation and construct validity. Findings from the study revealed that linking of SDP with BSRI is necessary from buyer side along with consideration of supplier's perspective to achieve CA, which will lead towards enhanced PR.
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