Critical Success Factors for Supplier Development and Buyer Supplier Relationship

Abstract

Development of supplier base is becoming mandatory for buyers, as it is not possible to manufacture all components in house, or to search new supplier every time. It is recommended that supplier base of buyer should be self-efficient and developed one to achieve competitive advantages. This development of supplier can be achieved by applying different supplier development practices and buyer supplier relationship practices as per the requirement. In this article, Exploratory Factor analysis (EFA) is applied for grouping the critical success factors with their items by using SPSS software. 6 factors viz., Drivers for Supplier Development Practices, Supplier Development Practices, Buyer supplier Relationship Practices, Buyer supplier Relationship Improvement, Competitive Advantages and Profitability were formed with their respective items. The multi-item scale shows strong evidence of reliability as well as convergent, discriminant validity in a sample. EFA and Reliability Analysis were applied on data for validation of instrument. Data from 87 respondents working in manufacturing sector were used for analysis.