Just-In-Time Purchasing and the Buyer-Supplier Relationship: Purchasing Performance Implications Using a Transaction Cost Analytic Framework
Description: The just-in-time purchasing literature resoundingly endorses long-term, cooperative buyer-supplier relationships. Significant anecdotal and descriptive evidence indicates that such relationships are rare in practice, raising questions as to the performance consequences of this gulf between theory and practice. Using an accepted theoretical model of the buyer-supplier relationship, transaction cost economics, this study examined the purchasing performance implications of the nature of the buyer-supplier relationship under just-in-time exchange. The focal purpose of the study was to examine the performance consequences of crafting long-term, cooperative relationships. The research design employed was a cross-sectional field study, involving a static-group comparison, implemented through the use of a mail survey. A dual-stage cluster sample of eight hundred purchasing managers and professionals employed in the two digit Standard Industrial Classification (SIC) Code 36, Electronic and Other Electrical Equipment and Components, was provided by the National Association of Purchasing Management (NAPM). The questionnaire was pretested and the substantive validity of the measurement scales assessed. Scales were purified via correlational and reliability analyses. Criterion-related and construct validity were established via correlational, exploratory factor, and confirmatory factor analyses. The three hypotheses of the study, involving extant tests of the association between the nature of the buyer-supplier relationship and purchasing performance (i.e., as reflected by transaction costs), were tested via analysis of covariance (ANCOVA) models. All three hypotheses were supported by the data to varying degrees. The confirmation of the theoretical model of the study provides empirical evidence to researchers and practitioners as to the superiority, in exchange efficiency terms, of cooperative relationships under conditions of just-in-time exchange. It may not be presumed, however, that cooperative exchange will enhance efficiency in all exchange environments.
Date: December 1996
Creator: Warnock, Stuart H. (Stuart Hamilton)
Partner: UNT Libraries