Determinants of Key Supplier Retention in Electric and Electronics (E&E) Industry of Malaysia
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Date
2015
Authors
Arikrisnan, Logeswari
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Abstract
Electric & Electronics industry (E&E) in Malaysia is one of the major contributors to supply chain movements around the world. The suppliers of E&E industry play a key role for on time delivery of the products so that the production flow will be smooth on a day-to-day basis. The retention of suppliers in E&E industry is an essential and strategic purchasing obligation for manufacturers not only for consistent supply of required products, but also for the stability of the supplier in terms of reasonable costing, trustworthiness and hospitality. The current study identifies the important determinants for retaining key supplier in E&E set up in Malaysia. Based on the assessment of the literatures, a conceptual research model has been developed to scrutinize the relationship of the identified predictors and the relevant hypotheses have been tested for understanding the correlational relationship. A massive survey was performed based on 112 respondents (manufacturers) from E&E industry in Malaysia. The predictors identified from the literature review and from experts were Supplier Engagement, Supplier Quality, Supplier Infrastructure, Supplier Commitment, Confidential Sharing. The buyer supplier relationship plays a mediating role and supplier retention is considered as a dependent variable. Out of 112 respondents, 41 (36.6%) have given more than 4.34 as their overall average score for supplier retention. On the other hand, 72 (64.3%) out of 112 manufacturers remarked that they have a good relationship with the key supplier. All the above stated predictors were found to be pure predictors as they are positively influencing the key supplier retention (direct effects). Interestingly, with the presence of buyer supplier relationship, Supplier Engagement and Confidential Sharing were still influencing key supplier retention (indirect effects). It clearly indicates that the suppliers are trustworthy as they never reveal the confidential information from one company to another and they always preoccupy themselves with the right manufacturers.
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Keywords
Determinants of Key Supplier Retention , Electric and Electronics Industry