Validation of Constructs for Buyer Supplier Relationship Development Strategies: Indian Manufacturing Context

Abstract

Focus of buyer is to satisfy the end user with improved quality and diversified range. As it is not possible to manufacture all components in house, supplier base of buyer should be self-efficient and developed one. This development of supplier can be achieved by applying different supplier development practices as per the requirement, For being competitive in market, supplier base of buyer should be self-efficient and this can be achieved through implementing supplier development practices Excellence in supplier development and relationship improvement results in betterment of supply chain performance. In this article, a new measurement scale to assess the supplier development practices, relationship between the buyer and the supplier with competitive advantages and profitability is developed and validated. To examine the impact of supplier development practices in the context of buyer–supplier performance, a survey was conducted on 512 manufacturing companies. The multi-item scale shows strong evidence of reliability as well as convergent, discriminant validity in a sample. Exploratory Factor Analysis (EFA), Confirmatory Factor Analysis (CFA) and Reliability Analysis is applied on data for validation of instrument. Exploratory factor analysis yielded nineteen factors, which were further confirmed by confirmatory factor analysis. Suggestions for applying the measure in future research are presented.

Keywords: Supplier Development, Buyer Supplier Relationship Development