The Effect of Strategic Purchasing on Supplier Development and Performance

Abstract

<strong>Purpose:</strong> The aim of this article is to introduce the effect of strategic purchase (SP) on the suppliers' development (SD) and purchasing performance. <strong>Design/methodology/approach:</strong> The research method is causal applied one and in order to gather data, the questionnaire was used under field method. The questionnaires were distributed among 241 companies among the suppliers of Imam Khomeini Oil Refinery Company of Shazand. Method of data analysis is also Structural Equation Modeling. <strong>Findings:</strong> this study indicate that there is significant evidence to support the hypothesized model in which SP a direct influence on SD practices and purchasing performance, as well as an indirect impact on purchasing performance mediated through SD. <strong>Research limitations/implications:</strong> Further research is necessary to increase our understanding of a buyer's strategic purchasing and supplier development practices and more specifically how suppliers could develop a supporting environment to facilitate the strategic alignment of these two concepts. The limitations of the survey are also discussed. <strong>Practical implications: </strong>The findings from this study provide supplying firms with an understanding of how buying firms use SD to deploy their SP initiatives in order to achieve improvements in purchasing performance. <strong>Originality/value:</strong> While there is some literature analyzing SP and the implications for buyer-supplier relationships, the relationship between SP and SD practices and their effect on purchasing performance has not been yet analyzed.