Supply management orientation and supplier/buyer performance

TLDR

Supply‑management excellence is linked to higher quality, customer service, and channel performance, yet most evidence is conceptual or case‑based, and a supply‑chain orientation may not enhance flexibility when volume and process flexibility are top priorities. The study tests the impact of a supply‑management orientation (SMO) on suppliers’ operational performance and buyers’ competitive priorities (cost, quality, delivery, flexibility). Three hypotheses relating SMO, supplier performance, and buyer performance are evaluated with confirmatory structural equation modeling. Increasing SMO improves both suppliers’ and buyers’ performance, with stronger effects on delivery and quality than on cost or flexibility, and the article concludes with additional insights and future research directions.

Abstract

Abstract Academics 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.