An Empirical Study on the Impact of Supplier Performance on Organizational Performance:A Supply Chain Perspective

Supply chain management is the latest phenomenon in the present business world. Efforts are being made to integrate the various players into one performing unit. Suppliers and customers are being brought into planning and problem-solving activities of the firm. It is fast becoming imperative that all members of a supply chain should perform if they are to survive. This research paper is one of the first attempt of its kind to study the supply chain practices of small manufacturing firms. The objective is to find out the impact of supplier performance on the performance of the firms. The sample frame is small scale manufacturers (firms with less than 100 employees) listed with Coimbatore District Small Industries Association (CODISSIA). A simple random sample of 75 firms is selected from the source list of 792 firms. These firms were administered a structured questionnaire containing pre-validated scales to measure the supplier performance and organizational performance of firms. After the data were collected, the scales were purified using Corrected Item Total Correlation (CITC) values and reliability was tested using Cronbach’s alpha. The resultant purified scales were then tested for convergent validity using PLS path modeling software (Visual PLS). Once the constructs were found to be both reliable and valid, the impact of supplier performance on organizational performance was tested using bootstrapping method. The supplier performance was found to have a significant impact on the performance of the firm.