Predicting purchasing performance: the role of supplier development programs

To examine the role of supplier development and its related elements in the context of purchasing performance from a buying firm’s perspective, a survey was conducted of companies in the electronics industry in Hong Kong. Using factor analysis, seven factors were identified relevant to supplier development activities. These elements include: long-term strategic goals, effective communications, partnership strategy, top management support, supplier evaluation, direct supplier development and perception of supplier’s strategic objective. Spearman correlation analysis indicated that all the supplier development elements are positively and significantly correlated to the perceived purchasing performance. From the results of regression analysis, two factors, direct supplier development and supplier’s strategic objectives proved to be significant predictors of purchasing performance.