The impact of supply chain relationship dynamics on manufacturing performance

The purpose of this paper is to investigate how the dynamics of supply chain (SC) relationships impact on manufacturing performance.

A conceptual framework was developed incorporating dimensions of SC relationship dynamics and manufacturing performance. Structural equation modelling was used to test the model with data collected using a postal questionnaire from 200 suppliers in the electronics sector in the Republic of Ireland.

There was mixed support for the impact of SC relationship dynamics on manufacturing performance. Hypotheses in respect of cost and quality were supported but those in respect of flexibility and delivery were not.

Using single informants and focal customers in research design.

The process of forming and developing SC relationships can be complex and requires firms to be competent in areas such as negotiation skills, conflict management, anticipating problems/finding solutions in advance and joint problem solving. The selection of such managers should be driven by the need to find individuals who possess supply chain management skills and relational competencies.

The nature of the relationship between measures of manufacturing performance has been addressed by two dominant theories: the cumulative or “sandcone” theory and the “trade‐off” theory. Findings provide only partial support for this theory with respect to quality and cost. In contrast, the model is more aligned with the Skinner's (1969) “trade‐off” theory.