Academic journal article International Journal of Business and Management Science

The Significant Effect of Information Sharing and Strategic Supplier Partnership on Supplier Performance

Academic journal article International Journal of Business and Management Science

The Significant Effect of Information Sharing and Strategic Supplier Partnership on Supplier Performance

Article excerpt

INTRODUCTION

Intense global competition and challenges have prompted many manufacturing companies to be more involved in how their suppliers and customers do business. They need to have more emphasis on manufacturing processes that have impact on enhancing supply chain management performance and bottom-line outcome. The processes may include the procurement of raw materials, products' designs and assemblies, transportation and logistics of finished products, as well as customers' needs and satisfaction. The process of manufacturing and distributing products and services to customers is becoming the most effective and efficient way for businesses to stay successful and is crucial to the practice of supply chain management. Supply chain management (SCM) is the integration of key business from end user through suppliers that provides products, service, and information that add value for customers and other stakeholders (Lambert et al., 1998). The understanding and practicing of SCM has become an essential prerequisite for staying competitive in the global race and for enhancing performance. As competition intensified and markets became global, so did the challenges associated with getting a product or service to the right place at the right time at the lowest cost. Organizations began to realize that it is not enough to improve efficiencies within an organization, but the whole supply chain also has to be made competitive (Childhouse and Towill, 2003; Tan et al., 2002).

There are several dimensions or programs of SCM. However, this paper specifically investigates relationships between two important dimensions of SCM namely 'information sharing between SCM partners' and 'strategic supplier partnership' with 'supplier performance". Despite variable evidence regarding performance improvements related to 'information sharing between SCM partners and 'strategic supplier partnership', relatively little empirical research exists to measure the extent of supplier performance improvements resulted from these two SCM programs especially in the Malaysian context. This study seeks to address this apparent gap in literature by examining the performance implications of implementing 'information sharing between SCM partners' and 'strategic supplier partnership' on 'supplier performance' in Malaysian manufacturing industry using parametric statistical analyses namely Pearson's correlation and structural equation modeling (SEM).The main objectives of this paper are: a) To empirically assess the importance of each variable of 'information sharing between SCM partners' on 'supplier performance'; b) To empirically assess the importance of each variable of 'strategic supplier partnership' on 'supplier performance'; c) To empirically determine whether 'information sharing between SCM partners' has significant association with 'supplier performance' ; d) To empirically discover whether 'strategic supplier partnership' has significant relationship with 'supplier performance'.

The paper is presented in several sections. First, this paper continues with a brief explanation on the supply chain management principles and literature review including 'information sharing between SCM partners' and 'strategic supplier partnership'. Second, it highlights the conceptual framework which includes the explanation of the conceptual model and hypotheses. Third, it discusses the methodology adopted, and the tests conducted to obtain reliable and valid measures of variables. Fourth, it highlights the preliminary statistical analyses which include correlations between 'information sharing between SCM partners', 'strategic supplier partnership' and 'supplier performance'. Fifth, it presents the result of structural equation modeling (SEM). Finally, the overall results are then discussed and implications highlighted.

LITERATURE REVIEW

Basically, SCM involves collaboration, co-ordination and integration across internal departments, external organizations and throughout the supply chain (Christopher, 1998). …

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