Supply management orientation and supplier/buyer performance

Abstract

AbstractAcademics and practitioners agree that excellence in supply management results in better quality, customer service, and channel performance. Yet, most of these studies are either conceptual in nature or actual case studies. The primary objective of this research is to test the impact of a supply management orientation (SMO) on the suppliers' operational performance and buyers' competitive priorities (cost, quality, delivery, flexibility). Three major research hypotheses associated with SMO, Supplier Performance (SP), and Buyer Performance (BP) are tested using a confirmatory structural equation modeling approach. The results of this research support the conclusion that an improvement (increase) in the SMO improves both the suppliers' and buyers' performance (i.e., a win–win situation for the supply chain). In addition, the influence of SMO on delivery‐ and quality‐related performance is more statistically significant than on cost or flexibility performance. In fact, when volume and process flexibility are top competitive priorities, a supply chain management orientation may not be an effective way to achieve the desired flexibility. The article ends by discussing other conclusions and suggests directions for future research.