Effect of supplier development on buyer performance: a survey of sugar milling firms in Western region of Kenya

Abstract

As firms increasingly emphasize cooperative relationships with critical suppliers, executives of buyer firms are using supplier development to ensure that their performance and objectives are met. Supplier development is an effort by the buying firm to meet current and future business needs by improving supplier performance and capabilities. This paper, therefore, set out to investigate the effect of supplier development on buyer performance. Explanatory Research design was utilized to explain the cause-effect relationship between supplier development and buyer performance. A sample of 88 top level purchasing and marketing executives considered by the researcher to have strong buyer-supplier and buyer-customer relationship respectively, were selected using purposive sampling technique. Data from respondents was analyzed using both descriptive and inferential statistics (correlation analysis and multiple regressions). The study found out that supplier technical support and supplier financial support had positive effect on buyer performance. Hence, it was prudent to infer that supplier technical support and supplier financial support positively affects buyer performance. This means that the company management efforts of developing suppliers will be of great significance to the company if it invested in offering supplier development so as to increase buyer performance both in the short and long run. Finally, from the study findings it is recommended that in order for firms to gain competitive edge over its competitors, they must continuously strive to align the resources, performances and activities of their critical suppliers with the operations of the buying organization through supplier development so as to gain superior overall performance and increased customer satisfaction.