Supply management orientation and supplier/buyer performance

Academics and practitioners agree that excellence in supply management resu lts in better quality, customer service, and channel performance. Yet, most of these studies are either conceptual in nature or actual case studies. T he primary objective of this research is to test the impact of a supply man agement orientation (SMO) on the suppliers' operational performance and buy ers' competitive priorities (cost, quality, delivery, flexibility). Three m ajor research hypotheses associated with SMO, Supplier Performance (SP), an d Buyer Performance (BP) are tested using a confirmatory structural equatio n modeling approach. The results of this research support the conclusion th at an improvement (increase) in the SMO improves both the suppliers' and bu yers' performance (i.e., a win-win situation for the supply chain). In addi tion, the influence of SMO on delivery- and quality-related performance is more statistically significant than on cost or flexibility performance. In fact, when volume and process flexibility are top competitive priorities, a supply chain management orientation may not be an effective way to achieve the desired flexibility. The article ends by discussing other conclusions and suggests directions for future research. (C) 2000 Elsevier Science B.V. All rights reserved.