A Study on the Effects of the Buyer-Supplier Relationship on Purchasing Performance and Satisfaction in Supply Chain Management in Malaysia.

Abstract

Due to the competitive environment in the Business industry, most firms try to establish and maintain a long-term relationship and cooperation between supplier and buyer that allow companies to make more flexible strategies for better operations and management. This study explores three main factors that are elational aspect, Resource dependence, and transactional cost. Each factor has sub-sections such as commitment, trust, cooperation for relationship Aspect, information sharing for resource dependence, and long-term relationship orientation for tractional cost. This study will study the effects of the variables whether they have significant impacts on purchasing performance and satisfaction. In this research, there are three hypotheses that five factors can induce positive purchasing performance. The fourth hypothesis is that positive purchasing performance affects positive purchasing satisfaction. Those studies will be analyzed through the survey. A questionnaire survey was conducted among 100 professional employees of electronics, automobiles, drinks and so on in the industrial zone in purchasing departments where author work in Malaysia. There are six hypotheses and Trust, Information sharing, long term orientation has positive influences on purchasing performance. On the other hand, Commitment and cooperation were identified which had no positive impact on purchasing performance. Besides, purchasing performance has a significance in purchasing satisfaction according to this study. In conclusion, buyers should take recommendations from this study that they should try to improve trust, information, and long-term orientation for retaining a good relationship with a supplier to reduce transactional cost and work more flexible to avoid risks such stock-out and overstock situations. For trust, an increased number of having meetings will help buyers have interactions with suppliers and exchange business opinions. About information sharing, ERP system will help buyers to share concise information with suppliers that avoid mistakes of quantity orders and communications. Lastly, Long term orientation can be improved by investing in supplier’s production facility that makes the suppliers increase more dedication to supply planning for the buyer.