User‐Vendor Relationships in the Scottish Electronics Industry

Abstract

User‐vendor relationships are examined in a sector of the electronics industry where the manufacturing process is sensitive to the performance of vendors in terms of price, quality and delivery. Two similar user companies with different vendor management approaches are considered and the effects these have on vendor performance and the subsequent results for aspects of the companies' performance examined. Vendors supplying both companies were interviewed on the rationale of their behaviour towards the companies. It is shown how, for this type of manufacturing process, forgoing short‐term price opportunities by developing long‐term relationships with vendors can lead to greater overall benefits for the manufacturing process.

Service quality along the supply chain: implications for purchasing

“…Firms also experienced lower inventory levels and fewer disruptions in production schedules. Supporting Masson's (1986) research, Cusumano and Takeishi (1991) determined that early involvement of suppliers in the new product development process was associated with lower defect rates during production. Krause et al (1998) also explored supplier development programs based on Hahn et al's (1990) definition: "any systematic organizational effort to create and maintain a network of competent suppliers" (p. 3).…”

“…Monczka and Trent (1991) concluded that supplier dependency on sole suppliers required purchasing to manage suppliers more effectively in the areas of quality, delivery, new technology development, and product design. Masson (1986), in a comparative case study of two Scottish electronics manufacturers, found that regular visits with suppliers helped prevent delivery and quality problems. Firms also experienced lower inventory levels and fewer disruptions in production schedules.…”

“…1. Implementation of activities to develop more cooperative relationships, including single sourcing, strategic partnerships, joint problem solving, supplier certification, site visits, and supplier development have empirically been linked to product quality and employee productivity (AQF and Ernst and Young, 1991;Cusumano and Takeishi, 1991;Hendrick and Ellram, 1993;Krause, 1999;Masson, 1986;Richardson, 1993;Saraph et al, 1989). These findings suggest that a direct relationship also exists between implementation of cooperative purchasing/supplier relationships and purchasing's capability to deliver service quality to internal customers.…”

“…Respondents were also asked to assess the current utilization of supplier programs and activities within their organization that would suggest a cooperative relationship, with possible responses ranging from "not at all" to "always". Supplier programs and activities included in the survey were based on previous research related to the management of purchasing/supplier relationships (Cusumano and Takeishi, 1991;Fawcett and Birou, 1993;Hendrick and Ellram, 1993;Krause, 1999;Masson, 1986;McMillan, 1990;Nevins and Whitney, 1989;Richardson, 1993;Saraph et al, 1989).…”

The impact of relationship-oriented behaviors on firm financial performance in the restaurant industry

“…According to these researchers, involvement activities and behaviors are very extensive, including formal assessments of suppliers (Giunipero, 1990;Watts & Hahn, 1993), supplier education and training (Gait & Dale, 1991;Krause, 1997Krause, , 1999Monczka et al, 1993), assistance in solving performance problems of suppliers, provision of guidelines/procedures to improve supplier performance (Krause & Ellram, 1997), and site visits by buying firms (Krause, 1997(Krause, , 1999Masson, 1986). Buying firms' involvement, for the current study, describes these activities and behaviors identified by previous studies.…”