Supplier relations and supply chain performance in financial services processes

Purpose - This paper aims to empirically test the relationship between supplier relations and satisfaction with overall supplier performance in a services context at a process level of analysis. Design/methodology/approach - Two hypotheses are developed, one predicting a positive relationship between a multi-dimensional construct of supplier relations and satisfaction with overall supplier performance, and one five-part hypothesis predicting positive relationships between the underlying components of supplier relations and satisfaction with overall supplier performance. Using a sample of 108 financial services processes, the first hypothesis is tested using regression analysis, and the second hypothesis is tested using correlation analysis. Findings - After controlling for supplier efficiency and responsiveness, use of information technology, electronic information-sharing, supplier type, and firm size, better supplier relations are associated with satisfaction with overall supplier performance. However, while the partnering components of the relationship (i.e. cooperation and long-term commitment) are correlated with satisfaction with overall supplier performance, the operational components of the relationship (i.e. high degree of coordination, information-sharing, and feedback) are not. Research limitations/implications - Limited informant population, primarily single respondents, some single-item variables. Practical implications - The research results suggest not only the importance of improving overall supplier relations, but also the particular benefits of building partnerships within the service supply chain through co-operation and long-term commitment in order to increase satisfaction with overall supplier performance. Originality/value - Unlike most empirical supply chain management studies, which use data from manufacturers at the strategic business unit or firm level, and recognizing that services and manufacturers differ in certain respects that are salient for supply chain management, this study uses data from a services industry (i.e. financial services) collected at the process level and provides unique insights into services and process level supply chain management.