The main aim of this research is to test the influence of a Supply Management Orientation (SMO) on the suppliers’ operational performance and buyers’ competitive priorities cost, quality, delivery, flexibility. SMO will be explored thoroughly in this research to describe the efforts which the management has deemed necessary in the creation an operating environment where the buyer and supplier interact in a synchronized manner. Practitioners as well as researchers have supported the advantages of supply chain management. This research identified four key characteristics of supply management that assisted in the creation of an SMO. The impact of the characteristics on the performance of both suppliers and buyers is tested using a positive structured equation modeling approach. The common research outcome is that an improvement in SMO improves both suppliers’ and buyer’s performance, particularly when the buyer stresses on quality and delivery as its viable priorities. Below are the four performance characteristics of an SMO, and they are major contributors to improved performance of the supply chain process. They are: (a) An established and long-term relationship with suppliers; (b) Supplier involvement in the product development process; (c) A decreased number of suppliers; and (d) A quality focus. Manufacturing firm’s buyer with a higher level of SMO resulted in improved performance of both the supplier and buyer.
Established and Long-term relationship or partnership with suppliers Each participant assumes that the relationship will continue for a significant amount of time. Hence, a comprehensive planning approach is an integral feature of the SMO to sustain relationships. A close relationship translates into participants of that channel share the risks and rewards. In addition, participants are willing to maintain the relationship over a prolong period of time.
Supplier involvement in product development
The next important aspect of supplier...
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