The role of supplier-buyer relationship in enhancing business performance through supply chain management practice, total quality management implementation and product innovation

Abstract

The Company should collaborate with supply chain members to support business process activities and increase competitiveness. Company collaboration with suppliers is essential in supporting the adoption of supply chain practices and total quality management to pursue product innovation and enhance business performance. This study investigates the role of supplier-buyer relationships in enhancing business performance through supply chain management practice, total quality management, and product innovation. The research surveyed 150 companies implementing total quality management with ISO certification in East Java. Data processing employs partial least squares using SmartPLS software version 4.0. The research found that supplier-buyer relationships positively and significantly influence supply chain practice by 0.800, total quality management by 0.438, and product innovation by 0.293. The company's ability to implement supply chain practices positively affects total quality management by 0.443, product innovation by 0.206, and business performance by 0.263. Total quality management adopted by manufacturing companies by obtaining ISO certification has an impact on increasing product innovation by 0.412 and business performance by 0.276. The company's ability to build a supply chain strategy to produce innovative products affects business performance by 0.446. The research results contribute practically to managers who build coordination with supply chain members, especially purchasing and marketing managers, to be able to read the capabilities and advantages of external partners to be communicated internally in the company—theoretical contribution in enriching supply chain strategy theory in increasing competitiveness.