The Effect of Supplier Trust, Supplier Innovation, and Buyer-Supplier Relationship in Enhancing the Supplier Performance on the Death Service Companies in Surabaya, Indonesia

Abstract

Changes in customer needs from a service company results in changes requirement from the supplier to meet the company’s demand. Excellent supplier performance is one of the mandatory requirements enabling the company to meet the customer demand. Better supplier performance can be improved when they have an excellent buyer-supplier relationship. The buyer-supplier relationship through better supplier trust from the buyer which means the company believes that the supplier can meet the needs of the company. Further, the supplier builds innovation providing better value to the company. This research examines the influence of supplier trust, supplier innovation, and buyer-supplier relationship to improve supplier performance at death service company in Surabaya. Data were collected by distributing questionnaires to 52 service suppliers in Surabaya. Data analysis using Partial Least Square (PLS) software. The findings show that all hypotheses are supported. There is a positive influence of supplier trust on supplier innovation and buyer-supplier relationship. Supplier-buyer relationship enhances the supplier innovation directly. Supplier innovation, buyer-supplier relationship, and supplier trust influence directly the supplier performance in death Services Company in Surabaya. This study provides new insight to the on-going research on the supply chain management. This work implies that manager can improve the supplier performance.Keywords: Buyer-supplier interdependence; business relationship behavior; customer satisfaction; trust-performance correlation