Building Supply Chains: A Key To Enhancing Manufacturing Performance

Supply chain management is becoming critical as firms recognize that competition is shifting from company versus company to supply chain versus supply chain. Two important factors in building successful supplier relations are (1) defining criteria to select and evaluate suppliers and (2) involving suppliers in important, inter‐company decisions. This research describes the relationships between these factors and supplier performance and between supplier performance and manufacturing performance. It develops and administers a large‐sample survey and uses factor analysis to develop measures for the importance of supplier‐selection criteria, supplier involvement, supplier performance, and manufacturing performance. The results indicate that importance of supplier‐selection criteria and the use of supplier involvement have direct and significant impacts on supplier performance and that supplier performance has a direct and significant impact on manufacturing performance.