Effect of strategic purchasing on supplier development and performance: a structural model

TLDR

The relational view of the firm suggests that strategic purchasing can drive supplier development and enhance purchasing performance, yet the link between these constructs has not been previously examined. This paper introduces strategic purchasing and supplier development as constructs that may contribute to relationship marketing success. The authors test hypotheses derived from SP and SD features using structural equation modeling on a sample of 306 Spanish manufacturing firms. Results confirm that strategic purchasing directly boosts supplier development and purchasing performance, and indirectly improves performance through supplier development, offering firms a pathway to enhance purchasing outcomes. Further research is needed to deepen understanding of strategic purchasing and supplier development, and the survey’s limitations are acknowledged.

Abstract

Purpose This purpose of this paper is to introduce strategic purchasing (SP) and supplier development (SD) as constructs that could have the potential to contribute to the success of relationship marketing efforts. Based on the relational view of the firm, the authors propose that SP is an antecedent of SD practices and can create value for the buying firm in terms of better purchasing performance. Design/methodology/approach Hypotheses derived from the key features of SP and SD practices are tested using structural equation modeling through field research on a sample of 306 manufacturing companies in Spain. Findings Findings from this study indicate that there is significant evidence to support the hypothesized model in which SP exerts a direct influence on SD practices and purchasing performance, as well as an indirect impact on purchasing performance mediated through SD. Research limitations/implications Further research is necessary to increase our understanding of a buyer's strategic purchasing and supplier development practices and more specifically how suppliers could develop a supporting environment to facilitate the strategic alignment of these two concepts. The limitations of the survey are also discussed. Practical implications The findings from this study provide supplying firms with an understanding of how buying firms use SD to deploy their SP initiatives in order to achieve improvements in purchasing performance. Originality/value While there is some literature analyzing SP and the implications for buyer‐supplier relationships, the relationship between SP and SD practices and their effect on purchasing performance has not been yet analyzed.