The impact of supplier development on buyer–supplier performance

In recent years, many companies have come to recognize the crucial role that purchasing and materials management activities play in determining overall corporate performance. Of main concern in many companies is the supplier development program. To examine the role of supplier development in the context of buyer–supplier performance from a buying firm's perspective, a survey was conducted of 142 electronic manufacturing companies in Hong Kong. Factor analysis yielded eight factors including transaction-specific supplier development and seven infrastructure factors of supplier development: strategic goals, effective communications, long-term commitment, top management support, supplier evaluation, supplier strategic objectives, and buyer trust in the supplier. Correlation analysis indicated that transaction-specific supplier development and its infrastructure factors significantly correlated with the perceived buyer-supplier performance outcomes. Hierarchical multiple regression analyses suggested that transaction-specific supplier development, trust, supplier strategic objectives and effective communications significantly contributed to the prediction of buyer–supplier performance improvement.