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The effect of supplier development initiatives on purchasing performance: a structural model

by C Sanchez-Rodriguez, D Hemsworth, A R Martinez-Lorente
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Purpose - Supply chain management is an increasingly important\norganizational concern, and proper management of supplier relationships\nconstitutes one essential element of supply chain success. However,\nthere is little empirical research that has tested the effect of\nsupplier development on performance. The main objective is to analyze\nthe effect of supplier development practices with different levels of\nimplementation complexity on the firm's purchasing performance.\nDesign/methodology/approach - Three supplier development constructs were\ndefined: basic supplier development, moderate supplier development, and\nadvanced supplier development. Three structural models were hypothesized\nand tested using structural equation modeling through field research on\na sample of 306 manufacturing companies in Spain.\nFindings - Identified important interrelationships among the various\nsupplier development practices, basic, moderate, and advanced. Also\nindicated that the implementation of supplier development practices\nsignificantly contributes to the prediction of purchasing performance.\nResearch limitations/implications - The use of a single key informant\ncould be seen as a potential limitation of the study. The study was a\ncrosssectional and descriptive sample of the manufacturing industry at a\ngiven point in time. A more stringent test of the relationships between\nthe different levels of supplier development and performance requires a\nlongitudinal study, or field experiment.\nPractical implications - This study focused on supplier development\npractices and revealed how involving suppliers in supplier development\nactivities is important and may help buyers to increase their purchasing\nperformance. The findings from the structural analysis should provide\npracticing managers with insights on how these practices and their\nbenefits are related in terms of purchasing performance, thus affecting\ntheir ability to make better sourcing decisions.\nOriginality/value - Fills an important gap in the purchasing literature\nwith respect to the area of supplier development. While there is much\nwritten about supplier development based on conceptual and case study\nresearch, this study is unique in that it is the first attempt to\nempirically model the relationships between different levels of supplier\ndevelopment and their impact on purchasing performance using a\ncomprehensive set of practices.

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