Buyer-supplier operational practices, sourcing policies and plant performances: Results of an empirical research

Abstract

On the basis of empirical research on a sample of Italian plants, this study: (i) analyses the relationships between advanced buyer-supplier operational interaction practices (design link, logistic link, quality link) and the basic options of the buyer's purchasing strategy, e.g. sources selection criteria, supply base reduction policies, long-term perspectives granted to suppliers (stability of procurement); and (ii) compares these operational practices and purchasing policies in different performing plants. In other words, this study verifies if advanced buyer supplier interaction practices and 'cooperative' supply management policies exhibit a predictive validity of the plant performances. The survey involved 497 respondents in 52 plants of two industries (electronic and mechanical). The study demonstrates that the establishment of an advanced operational link with sources significantly influences the basic option of the buying firm's purchasing strategy. In addition, it demonstrates that better performing plants exhibit a higher level of design and logistic interactions, and a better use of long-term supply agreements with sources.