The moderator effect of supplier management on the relationship between supplier selection and manufacturing flexibility

Abstract

Both researchers and practitioners have recognised the salience of effective supplier selection and supplier management strategies on manufacturing flexibility. Although both agree that if the right supplier is selected and managed well, the manufacturer would be able to function more efficiently. However, there is an opposing opinion as to what supplier selection and management strategies that a manufacturer pursues and the situation that accompanies it. For example, would the manufacturer who is interested in achieving product flexibility execute similar supplier selection and management strategies compared to those seeking for launch flexibility or volume flexibility? In order to address this issue, which has remained unresolved until now and a topic of protracted debate, this study investigates the moderation effect of supplier management strategies on the relationship between supplier selection strategies and manufacturing flexibility namely, product flexibility, launch flexibility, and volume flexibility. A total of 120 manufacturers were identified from companies listed in the factory directory published by the Penang (Malaysia) Development Corporation (PDC), and a copy of the research questionnaire mailed to each of them. Out of this number, 92 usable responses were received and analysed. The results reveal that selection of supplier based on technology is important when the manufacturer is emphasising on product and launch flexibilities, but when emphasis is on volume flexibility, quality is more important. Results further show that early supplier involvement and technology roadmap are moderators of launch flexibility. In sum, the key observation from this study is that different types of manufacturing flexibility require different supplier selection and supplier management strategies. The outcome of this research adds a new insight to the current supplier selection and management-manufacturing efficiency debate, as well as provides practitioners with vital information for managing inbound activities. Details of the findings and the implications are discussed.