Procurement performance and manufacturer-supplier relationships: a multivariate analysis in Kuwaiti manufacturing companies

Abstract

Purpose – The purpose of this study is to report and contrast manufacturer–supplier relationships, supplier selection and procurement performance of two manufacturing sectors in Kuwait. The effect of supplier relationship and selection on the performance of the procurement function was also investigated. Design/methodology/approach – Surveys of supplier selection, supplier relationship and procurement performance are taken from 62 plants operating in 2 competitive manufacturing sectors in Kuwait (foods industry and refractors industry). The study utilizes multivariate and multi-regression analyses in understanding the effect of supplier relationship and selection on the performance of the procurement function. Findings – Findings indicate a significant effect of supplier relationship and supplier selection on a plant’s procurement performance. However, variance in plant size and/or industrial sector was found to not affect this relationship. Originality/value – Despite the significance of the Gulf states and the growing importance of the manufacturing sector in these countries, relatively little is known about how buyers and suppliers within this sector interact. This study is the first to document supplier relationships and selection processes in this area of the world. The study also provides a reliable and valid scale for measuring the performance of the procurement function in the Kuwaiti manufacturing sector. Furthermore, the postulated impact of supplier–buyer relationships on the performance of the procurement functions was investigated in a newly emerging economy in the Gulf.