Effect of supplier development activities on performance outcomes: an empirical study

Abstract

Purpose The purpose of this paper is to examine the role of supplier development activities (SDAs) in the context of three major performance outcomes (POs), i.e. supplier performance improvement (SPI), buyer’s competitive advantage improvement (BCAI) and buyer-supplier relationship improvement (BSRI). Design/methodology/approach A survey was conducted of 214 manufacturing organizations and the data were analyzed using factor analysis, correlation analysis and multiple hierarchical regression analysis. Findings This paper categorizes the identified 28 SDAs and 33 POs into five and three major categories of SDAs and POs, respectively. The results indicate a significant relationship between each aspect of SDAs and POs, except investment. The effect of each category of SDA is determined through a developed framework. Research limitations/implications This present study analyzes the SDAs and POs from the buyer’s point of view. A paired buyer and supplier data may provide some additional information about the relationship between SDAs and POs. Practical implications The outcome of this study will provide significant information for managers and academicians who are involved in outsourcing. Originality/value For the first time, the relationship and effect of each category of SDAs was analyzed in combination with three major POs, i.e. SPI, BSRI and BCAI.