Impact of purchasing practices, supplier relationships and use of information technology on firm performance

Abstract

Purpose The study aims to establish an impact of supplier relationship and information and communication technology through purchasing practices on firm performance. Design/methodology/approach Review of relevant literature resulted in constructs, namely, supplier relationships, information and communication technology, purchasing practices and firm performance. A survey of 179 manufacturing companies through structured questionnaire was conducted. The responses were analysed through structural equation modelling using the partial least squares method. Findings It is observed that the firm performance is directly influenced by purchasing practices and indirectly by supplier relationships and information technology. The use of information technology in materials management affects supplier relationships and purchasing practices both. Practical implications The study provides a model for purchasing practitioners by highlighting the importance of supplier relationship management. Though the firms are running after improving technology, it can only affect firm performance through proper purchasing practices. Originality/value The study provides empirical evidence to the practical notions that exist in purchasing practitioners.