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International Journal of Production Research

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Supply chain relationship quality, the competitive environment and performance

B. Fynes , S. de Brca & C. Voss
a a b c

Department of Business Administration, Smurfit Graduate School of Business, University College Dublin, Carysfort Avenue, Blackrock, Co. Dublin, Ireland
b

Department of Marketing, Smurfit Graduate School of Business, University College Dublin, Blackrock, Co. Dublin, Ireland
c

Centre for Operations Management, London Business School, Sussex Place, Regent's Park, London NW1 4SA, United Kingdom
d

Department of Business Administration, Smurfit Graduate School of Business, University College Dublin, Carysfort Avenue, Blackrock, Co. Dublin, Ireland E-mail: Published online: 22 Feb 2007.

To cite this article: B. Fynes , S. de Brca & C. Voss (2005) Supply chain relationship quality, the competitive environment and performance, International Journal of Production Research, 43:16, 3303-3320, DOI: 10.1080/00207540500095894 To link to this article: http://dx.doi.org/10.1080/00207540500095894

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International Journal of Production Research, Vol. 43, No. 16, 15 August 2005, 33033320

Supply chain relationship quality, the competitive environment and performance

RCAz and C. VOSS} B. FYNES*y, S. de BU
yDepartment of Business Administration, Smurfit Graduate School of Business, University College Dublin, Carysfort Avenue, Blackrock, Co. Dublin, Ireland zDepartment of Marketing, Smurfit Graduate School of Business, University College Dublin, Blackrock, Co. Dublin, Ireland }Centre for Operations Management, London Business School, Sussex Place, Regents Park, London NW1 4SA, United Kingdom

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(Received 31 October 2003) In todays competitive environment, it is supply chains (SC) rather than companies that compete. Empirical research in the area of SC relationships have primarily sought to explain the nature of relationship processes rather than their eect on performance. However, the impact of SC relationship quality on SC performance has received less attention in the literature. Furthermore, the nature of the competitive environment can vary greatly across dierent supply chains. As such it is appropriate to consider whether or not the eect of SC relationship quality on SC performance is monotonic across dierent competitive environments. Accordingly, this paper investigates if SC relationship quality has an impact on SC performance quality and whether or not the competitive environment moderates this relationship. Keywords: Supply chain; Relationships; Performance; Competitive environment

1. Introduction In todays competitive environment, it is supply chains (SC) rather than companies that compete (Christopher and Towill 2001). Companies have been encouraged to develop close partnerships with suppliers and customers alike. Empirical research in the area of SC relationships have primarily sought to explain the nature of relationship processes rather than their eect on performance (Styles and Ambler 2000). As a result, there is a considerable body of work focusing on the interaction between the various dimensions of SC relationships (such as trust, adaptation, communication and cooperation). Both Naude and Buttle (2000) and Parsons (2002) have used the term SC relationship quality to describe the higher order construct which collectively incorporates these behavioural dimensions. However, the impact of SC relationship quality on SC performance has received less attention in the literature. In addition, the development of scientic knowledge in the discipline is now at the stage where more rigorous empirical investigation is required into why (and why not) supply chain interactions can impact upon performance (Rungtusanatham et al. 2003).
*Corresponding author. Email: Brian.Fynes@ucd.ie
International Journal of Production Research ISSN 00207543 print/ISSN 1366588X online # 2005 Taylor & Francis Group Ltd http://www.tandf.co.uk/journals DOI: 10.1080/00207540500095894

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The dynamics of the competitive environment (technological turbulence, competitive intensity and customer type) have long been identied as an important contingency variable in conceptual and empirical studies in operations management (Skinner 1969, Swamidass and Newell 1987, Slater and Narver 1994, Ward and Duray 2000). Likewise, the nature of the competitive environment can vary greatly across dierent supply chains (Fisher 1997). As such it is both timely and appropriate to consider whether or not the eect of SC relationship quality on SC performance is monotonic across dierent competitive environments. Accordingly, this paper posits the following research questions: (1) Does SC relationship quality have an impact on SC performance? (2) To what extent is the relationship between SC relationship quality and SC performance moderated by the competitive environment? In formulating our research questions, we have drawn on the work of contingency theorists in the organizational and strategy literature such as Lawrence and Lorsch (1967) and Hofer (1975). Contingency theory is based on the assumption of matching organizational resources with the corresponding environmental context and a belief that there is no universal set of choices that is optimal for all businesses (Gingsberg and Venkatraman 1985). The structure of such frameworks is that when contingency theorists assert there is a relationship between two variables . . . which predicts a third variable . . . they are stating that an interaction exists between the rst two variables (Schoonhoven 1981: 351). The remainder of this paper is structured as follows: rstly, we review the theoretical context and outline our hypotheses; secondly, we describe our methodology: thirdly we develop and test a model of SC relationship quality, competitive environment and SC performance; fourthly, we reect on the implications of our study and conclude with some suggestions for future research.

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2. Theoretical background and hypotheses 2.1 Supply chain relationship quality Researchers have adopted dierent theoretical frameworks in order to explain the nature of SC relationships. These include transaction cost theory, political economy theory, social exchange theory and resource dependence theory (Robicheaux and Coleman 1994). These theoretical frameworks have all contributed to the modelling of SC relationships both in their identication of the underlying dimensions of relationships and their selection of appropriate units of analysis (such as rm, dyad or network). Naude and Buttle (2000) argue that SC relationship quality encompasses the key relational dimensions of trust, adaptation, communication and cooperation. Trust has been dened as the rms belief that another company will perform actions that will result in positive actions for the rm, as well as not take unexpected actions that would result in negative outcomes for the rm (Anderson and Narus 1990: 45). Adaptation occurs when buyers and suppliers invest in transaction-specic investments (Heide and John 1988). Communication is the formal as well as informal sharing of meaningful and timely information between rms (Anderson and

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Narus 1990: 44). Frequent and timely communication is important because it assists in resolving disputes and aligning perceptions and expectations (Morgan and Hunt 1994). Cooperation refers to situations in which rms work together to achieve mutual goals (Anderson and Narus 1990). Because conicting behaviours can co-exist temporarily with cooperative actions, cooperation is not simply the absence of conict (Frazier and Rody 1991). Cooperation in exchanging information on production schedules, new products/processes and value analysis can both reduce product costs and improve product/process innovations (Landeros and Monczka 1989). These dimensions reinforce each other in terms of enhanced relationships. The empirical contributions of Mohr and Spekman (1994), Monczka et al. (1995), Sako (1992) and Ellram and Krause (1994) support the argument that in an existing relationship all of these dimensions will be positively correlated and are indicators of SC relationship quality. We therefore dene SC relationship quality as the degree to which both parties in a relationship are engaged in an active, long-term working relationship and operationalize the construct using indicators of trust, adaptation, communication and cooperation.

2.2 SC Performance The impact of SC linkages on operational and business performance has been the subject of a number of empirical studies. These studies have encompassed a variety of SC denitions, performance measures and methodologies. For instance, Carter and Ellram (1994) found that supplier involvement in product design has a positive impact on product quality using a case study design. Narasimhan and Jayaram (1998) examined the relationship between sourcing decisions, manufacturing goals, customer responsiveness and manufacturing performance using structural equation modelling. They found that integrating SC activities involves aligning sourcing decisions to achieve manufacturing goals in terms of dependability, exibility, cost and quality. Likewise, Carr and Pearson (1999) found that strategically managed longterm relationships with key suppliers can have a positive impact on nancial (as n (2003) using stochasdistinct from manufacturing) performance. Kaynak and Paga tic frontier modelling, found that characteristics internal to the rm such as top management commitment to purchasing and supply management had a positive eect on productive eciency. Likewise, Salvador et al. (2001) found that when buyers and suppliers interact on issues related to material ows and quality, there are signicant temporal eects in terms of speed and delivery punctuality. More recently, Tan et al. (2002) developed a comprehensive set of SC practice and SC performance metrics and found that while some practices had a positive eect on performance, others had an adverse eect. The recurring theme in all of these studies is the role of SC management in improving SC performance. However, the underlying dimensions of SC relationship quality have received limited treatment in these studies. For instance, Tan et al. (2002) only include information sharing (communication) and customer service management (cooperation) in their study. Thus while SC dimensions such as trust, and adaptation have been widely tested in the marketing literature in terms of their impact on marketing performance (Heide and John 1990, Morgan and Hunt 1994),

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their impact on SC performance has received less attention in the operations and supply chain management literature. We have argued that these dimensions reinforce each other in terms of enhanced relationships and are reected in practices such as supplier quality management, co-manufacturing, joint problem-solving and vendor assessment/certication procedures which in turn which can aect performance in terms of cost, quality, delivery and exibility. As such, enhanced SC relationship quality can have a positive impact on SC performance. Accordingly, we now posit that: H1: SC relationship quality has a positive eect on SC performance.

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2.3 Competitive environment as a moderator A considerable number of studies have investigated the moderating eect of environmental contingencies on strategic linkages (Slater and Narver 1994, Sousa and Voss 2001, Guimaraes et al. 2002). We now reect on how environmental variables such as competitive intensity, technological turbulence and type of customer might moderate the link between SC relationship quality and SC performance. The issue of competitive intensity has been the focus of research for some time. Common characteristics of intense competition include short product life cycles, product design sophistication, consistent high quality, cost reductions and customization. Collectively these create a volatile and demanding market environment (Das et al. 2002). Gupta and Govindrajan (1991) found that high frequency and informality of communications are necessary ingredients for eective knowledge diusion, particularly under conditions of high environmental uncertainty. Under conditions of high competitive intensity, organizations need to monitor market shifts continuously and modify products accordingly. In contrast, an organizations products are likely to need relatively fewer modications in stable markets in which customers preferences and needs do not change as much. As such, rms operating in highly competitive markets are likely to have a greater need for close SC relationships (i.e. high SC relationship quality) than rms in stable markets. In other words, SC relationship quality is more likely to be more strongly related to SC performance in turbulent markets than in stable markets. This gives: H2: The greater the competitive intensity, the stronger the relationship between SC relationship quality and SC performance. The second environmental factor posited to moderate the relationship between SC relationship quality and SC performance is technological turbulence or the rate of technological change. Firms with nascent technologies undergoing rapid change are expected to benet more from positive SC relationships than those with stable technologies (Slater and Narver 1994). Indeed, truly innovative products often rely on emerging technologies that require clarication and assistance during diusion. When technology is changing rapidly, the rm must be able to share information more quickly than when technology is more predictable. Stronger SC relationship quality between parties should facilitate improved SC performance in these turbulent environments. Firms need to interact when technology is stable, but SC relationships

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Competitive intensity H2 Supply chain relationship quality Customer type

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H1 H3 Technological turbulence

H4

Supply chain performance

Figure 1.

Conceptual framework.

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can be expected to play a more important role when technological change is rapid. Formally, this gives: H3: The greater the technological turbulence, the stronger the relationship between SC relationship quality and SC performance. The nal moderating variable we consider is the customer type. While there are many dierent ways of classifying customers, we posit that the impact of SC relationship quality on SC performance is contingent on whether the customer is an original equipment manufacturer (OEM) or not. There is a considerable body of empirical evidence which supports the view that working with an OEM customer leads to improvements in SC performance at the supplier level (Lamming 1993, Ellram and Krause 1994, Forker et al. 1997). OEM companies are an important source of technology transfer in terms of both product and process (including supply chain relationships) innovation (Womack and Jones 1996). This gives: H4: OEM customers will have a stronger impact on the relationship between SC relationship quality and SC performance than non-OEM customers. We synthesise our hypotheses as a conceptual model in gure 1.

3. Methodology 3.1 Survey instrument The instrument used to test the stated hypotheses was a mail survey. A draft questionnaire based on existing measurement scales for the research constructs (see the Appendix) was initially developed. This draft questionnaire was pre-tested to check its content validity and terminology. A group of 15 academics and managers interviewed were all involved in this pre-test stage. As a result a number of modications were made to the questionnaire. These included clarifying and simplifying some of the language and adding extra response categories and scale items. The layout was also modied to ensure user friendliness and ease of completion. The modied questionnaire was then pilot tested to check its suitability and appropriateness for the target population. It was posted to 30 practitioners in the electronics sector and 10 complete responses were returned and no problems were encountered at this

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stage. The questionnaire was then mailed to the target population. To encourage completion, respondents were promised, and received, a summary of the research ndings. Two repeat mailings of the instrument were carried out to improve the overall response rate. For the purposes of this study, we adopted the approach used by Sako et al. (1994) where respondents were asked to reply to questions with respect to the most important or focal customerproduct relationship.

3.2 Sample

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The population chosen for this study were manufacturing companies in the electronics sector in the Republic of Ireland. The reasons for focusing on this sector are two-fold. First, electronics has emerged as a leading sector in the Republic of Ireland in terms of adopting SC management and is not subject to the same level of regulation as other comparable sectors such as pharmaceuticals and chemicals (Dicken 1998). As such the sector is predominantly inuenced by competitive rather than regulatory forces. Second, the sector is heterogeneous in terms of sub-sectors and product/process complexity. In order to establish the size of the survey population, databases from the Irish Trade Board, the National Standards Association of Ireland, the Industrial Development Authority and Kompass Ireland were consulted. This produced an initial listing of 821 companies. Telephone contact was established with each of these companies and the key informant was also identied at this stage. The key informant was identied by enquiring as to which single individual was responsible and capable of responding to questions on SC relationship quality and performance. This step was taken in order to improve the quality and quantity of responses as well as to reduce the impact of potential inaccurate recall, hindsight bias and subconscious attempts to maintain self-esteem that can occur from using a single informant (Kumar et al. 1993). From the initial frame of 821 companies, 283 were removed from the sample as they had either gone into liquidation or were service rather than manufacturing plants. Each of the remaining 538 companies was then sent a copy of the questionnaire. A total of 202 questionnaires were returned, of which 200 were usable giving an overall response rate of 38%.

4. Analysis 4.1 Descriptive statistics The degree to which the sample is representative of the population was addressed by carrying out a series of standard chi-square goodness-of-t tests with respect to employee numbers, plant ownership and plant age (see table 1). For each of the characteristics, we found no signicant dierence between the population percentages and the sample percentages. This suggests that the sample response prole is not signicantly dierent from the population prole and that the sample is broadly representative on key variables.

Supply chain relationship quality, the competitive environment and performance Table 1. Characteristic Number of employees Less than 20 More than 20 but less than 50 More than 50 but less than 100 More than 100 but less than 200 200 or more Plant ownership Irish United Kingdom Other European USA Japanese Other Plant age Less than 5 years More than 6 but less than 11 years More than 11 but less than 20 years More than 20 but less than 50 years 50 years or more
NS: Not signicant.

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Population and sample proles. Population (%) Sample (%) 2 21.9 41.2 15.6 11.0 10.3 55.0 5.0 14.0 20.5 2.0 3.5 10.8 18.5 47.1 21.2 2.4 16.5 40.0 20.5 11.5 11.5 52.0 2.5 14.5 25.0 3.5 2.5 14.0 22.0 42.0 19.0 3.0

NS

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NS

NS

4.2 Conrmatory factor analysis Following Anderson and Gerbing (1988) we used AMOS 4 to conduct a twostage analysis of the measurement and structural models to test our hypotheses. Firstly, conrmatory factor analysis (CFA) was performed to evaluate the measurement properties of the model constructs. The measures used for SC relationship quality (trust, communication, cooperation and adaptation), SC performance (cost, quality, exibility, delivery dependability), competitive intensity and technological turbulence and the associated covariance matrix are shown in the Appendix. The factor loadings (), standard errors, t-values and Cronbach  values are shown in table 2. All of the items have high (>0.60) and signicant (t>1.96) loadings (Chin 1998). The goodness-of-t statistics for each CFA also show an acceptable level of t. In addition, the reliability of each scale was satisfactory with Cronbach  values of at least 0.70 achieved in all cases (Nunally 1978). The second stage of analysis was to calculate the standardized path estimates ( ), standard errors and t-values for the path (structural) model. In order to do so, we aggregated the trust, communication, cooperation and adaptation constructs to calculate SC relationship quality and the cost, quality, exibility and delivery dependability to calculate the SC performance construct. While we acknowledge that this approach limits our analysis of individual causal paths between these constructs, we do so to facilitate a parsimonious analysis of the moderator eects in the next stage of analysis (Byrne 2001). Table 3 shows the path estimates are both high ( >0.20) and signicant (t>1.96) (Chin 1998). The results thus provide empirical

3310 Table 2. Construct

B. Fynes et al. Conrmatory factor analysis and reliabilities. Standardized loading  Standard error t-value  0.82 0.69 0.63 0.10 8.11 0.92 0.13 9.96 R 0.10 8.80 GFI 0.99, AGFI 0.96, RMSEA 0.05 0.76 0.62 0.63 0.11 6.88 0.83 0.16 7.49 0.60 0.11 6.56 GFI 0.99, AGFI 0.99, RMSEA 0.00 0.79 0.79 0.68 0.11 8.49 0.74 0.09 8.99 0.60 0.09 7.51 GFI 0.99, AGFI 0.98, RMSEA 0.00 0.75 0.72 0.79 0.13 8.77 0.65 0.13 7.85 0.61 0.12 7.41 GFI 0.99, AGFI 0.94, RMSEA 0.08

Trust T1* T2 T3 T4 2 3.11, df 2, p 0.21, NFI 0.98, Communication CM1* CM2 CM3 CM4 2 0.31, df 2, p 0.85, NFI 0.99, Competitive intensity CI1* CI2 CI3 CI4 2 1.63, df 2, p 0.44, NFI 0.99, Technological turbulence TT1* TT2 TT3 TT4 2 4.56, df 2 , p 0.10, NFI 0.98,

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Adaptation 0.78 A1* 0.61 A2 0.88 0.32 5.83 A3 0.62 0.26 5.10 A4 0.83 0.33 5.84 2 17.762, df 2, p 0.00, NFI 0 .80, GFI 0.96, AGFI 0.80, RMSEA 0.11 Cooperation CL1* 0.60 CL2 0.72 0.16 7.03 CL3 0.78 0.16 7.15 CL4 0.60 0.14 6.20 2 14.11, df 2, p 0.001, NFI 0.93, GFI 0.96, AGFI 0.84, RMSEA 0.16 Supply chain performance Q1* Q2 D1 D2 C C2 F1 F2 2 69.14, df 9, p 0.00, NFI 0.82, 0.64 0.61 0.24 5.42 0.62 0.21 5.14 0.70 0.25 5.64 0.69 0.23 5.64 0.74 0.27 5.80 0.66 0.24 5.22 0.67 0.22 5.33 GFI 0.88, AGFI 0.78, RMSEA 0.11 0.76

0.79

*The corresponding parameter is set to 1 (unstandardized) to x the scale of measurement.

Supply chain relationship quality, the competitive environment and performance Table 3. Path H1 Supply chain relationship quality ! Supply chain performance Structural model (unmoderated) coecients. Standardized path estimate 0.28 Standard error 0.07 t-value 3.42

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Result Supported

Table 4.

Moderator eects using latent means analysis of SC performance. Low sub-group or High sub-group or non-original original equipment equipment manufacturer manufacturer 1.23 2.41 2.10 3.47* 2.45 3.76*

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Hypothesis H3 H4 H5

Moderator Competitive intensity Technological turbulence Customer type

Result Supported Not supported Supported

*Signicant at 1% level.

support for the hypothesis that SC relationship quality has a positive impact on SC performance. We used latent means structural analysis to evaluate the eect of the moderator variables. To test this, the sample was trichotomized on the basis of the respondents perception of both competitive intensity and technological turbulence into high, medium and low sub-groups. The middle subgroup of cases were omitted to improve the contrast between the sub-groups and hence the power of the subsequent statistical tests. For customer type, respondents were asked to classify their focal customer as to whether or not the customer sold products for resale under an end equipment manufacturers trademark (OEM) or not (non-OEM). Table 4 reveals that signicant dierences among the group means were found in respect of competitive intensity and customer type (H2 and H4) but not technological turbulence (H3). We also tested our model for the control variables of size (number of employees), ownership (domestic or foreign) and markets served (domestic or foreign). These variables did not have a signicant eect on the path coecients. These results provide mixed support for the moderator eects of competitive intensity technological turbulence and customer type on the SC relationship quality-SC performance relationship in that H2 and H4 are supported but H3 is not. We reect on these ndings in the following section.

5. Implications and conclusions Our ndings indicate SC relationship quality has a positive impact on SC performance (H1). This suggests that by developing and engaging in deep partnership types of supply chain relationships, suppliers can improve SC performance. Thus, while

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previous research identied empirical support for the relationship between SC practices and SC performance, our ndings extend this support with regard to SC relationship quality as an explanatory variable. The implications for managers are that they need to acknowledge that SC relationship quality demands a dierent style of management. As such, adjustments need to be made to the business culture between all the parties to the relationship. Increasing and maintaining high quality relationships is a complex process and requires considerable investment in resources. These relationships should be regarded as investments generating future potential revenue instead of costs. Our ndings are consistent with those of the IMP (industrial marketing and purchasing) group of researchers such as Ford (1984) and Turnbull et al. (1992). The management of eective relationships demands a dierent mindset than traditional economic theory suggests. Along with our ndings, these studies support the argument that eective SC relationship quality should be based on a platform of interdependency reecting the network perspective rather than the traditional independent view of individual decision-making based on economic theory. However, the management of close relationships based on cooperation, commitment and trust brings a greater level of stress and strain to managers than arms length business relationships. Our ndings provide support for the hypothesis (H2) that the greater the competitive intensity, the stronger the relationship between SC relationship quality and SC performance. Under conditions of high competitive intensity companies need to monitor market shifts continuously and manage the supply chain accordingly. Businesses operating in highly competitive intensive markets are likely to have a greater need for eective SC relationship quality based on interactive communications, cooperation, adaptation and trust than business in less competitive intensive markets. The implication for management is that these relationships have to be continuously developed and managed to prevent institutionalization (Ford, 1984). Institutionalization in this context is reected in increased levels of complacency, loss of dynamism and an acceptance of the status quo rather than an aspiration of continuous improvement. All market sectors lose their lustre as sales growth stagnates, prot margins are squeezed and competition intensies (Day 1994). Our ndings do not support the hypothesis (H3) that the greater the technology turbulence the stronger the relationship between SC relationship quality and SC performance. This mirrors Guimaraes et al. (2002) who found that strong relations with suppliers are always desirable and contend that highly innovative manufacturing companies are likely to have problems managing deep relationships with suppliers unless these suppliers are capable of keeping up with the relatively high clock speed (measured by the rate of change in products, production process and organizational factors) at which the company operates. Our ndings provide support for the hypothesis (H4) that dealing with OEM customers will have a stronger impact on the relationship between SC relationship quality and SC performance than non-OEM customers. This would suggest that there is a positive technology spill over eect on performance for companies that supply OEMs. In contrast, this eect is not evident, when dealing with rst, second or third tier-suppliers. The implication for managers is that they would be better o dealing further up the supply chain rather than at the lower tiers. This nding is

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consistent with much of the literature on technology transfer between companies (Cole 1988, Al-Ali 1995). In conclusion the implications for management are that mutual trust and adaptation are central to a more enlightened approach to managing SC quality relationships. Likewise, interdependent relationships are essential in moving away from the traditional adversarial model which is grounded in power-based bargaining. This requires frequent communication and cooperation on issues such as product and process design, quality and scheduling, all of which is evidenced by increased adaptation on the part of both buyer and supplier.

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6. Limitations and future research The limitations associated with this study primarily relate to the use of the focal or most important customer and reliance on supplier perceptions of SC relationships. Using the concept of the focal customer has a number of disadvantages. Firstly, the approach assumes the existence of a single focal relationship whereas, in practice, a company may have a selection of equally important customer relationships that inuence each other. Secondly, there might not necessarily be a uniform perception within a supplier company as to which customer is the most important. Hence, using a single key informant could produce some bias in our study. Thirdly, respondents were not given a specic set of criteria on which to base their selection of a focal customer relationship in our study; instead, they were asked to respond with respect to their most important customer relationship. This approach was adopted so as to facilitate a exible interpretation of the term most important. Equally however, such exibility can give rise to bias if respondents used a wide variety of ways to dene most important. Relying on supplier perceptions of analysis is also a limitation. It can be argued that the perceptions of relationships in our study are somewhat one-sided in that they represent the views of just one party and ignore the views of customers. This limitation implicitly suggests a signicantly dierent research design based on the relationship dyad (in itself, not without diculties in terms of sample size, dyad access, condentiality and accuracy of response). As is often the case, longitudinal research could provide valuable contributions to theory development and renement in the elds of SC relationships. There is a signicant temporal dimension to how buyerseller relationships develop. Accordingly, tracking the development of SC relationships could help clarify cause and eect relationships between variables. A research design, described by Anderson (1995) as cross-sectional research which is longitudinal in character presents a potentially interesting approach to data collection in this regard. This involves identifying critical indicators of each stage of SC relationship development from a set of relationship dyads at pre-ordained points in time. These critical indicators could then be used as a basis on which to separate the relationships into those that are at similar stages of development. These sub-samples could then be analysed separately, and the eects of temporal constructs assessed empirically.

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The impact of other contingency variables on the SC relationship qualitySC performance linkage should also be considered given the ndings of this study. Identifying the circumstances or variables that have an intervening eect on this linkage provides both the academic and practitioner communities with potentially compelling answers to the question of why some supply chains outperform others. The strategy literature suggests a wide-ranging set of such variables including organizational culture, the availability of slack resources; organizational structure, employee acceptance, market structure, internal technology, managerial characteristics and industry variety. This listing provides the researcher with a comprehensive array of theoretically well-grounded constructs that could further our understanding. Finally, cross-national comparisons of supply chains could also provide a fruitful eld of research endeavour in extending our ndings beyond Ireland.

Appendix Construct measures and sources (anchored by a strongly agree/disagree 5 point scale) Quality performance (customer satisfaction) (Voss and Blackmon 1994) Q1 Frequency of customer complaints. Q2 Adequacy of customer complaint tracking/feedback systems. Delivery performance (Choi and Eboch 1998) D1 Speed of delivery relative to competitors. D2 Percentage of orders delivered on-time. Cost performance (Fynes and Voss 2001) C1 Unit cost of product relative to competitors. C2 Unit cost of product over life cycle. Flexibility performance (Dixon 1992) F1 Volume exibility. F2 Variety (product line) exibility. Communication (Heide and John 1992) CM1 Exchange of information in this relationship takes place frequently and informally, and not only according to a pre-specied agreement. CM2 In this relationship, any information that might help the other party will be provided for them. CM3 Both parties in the relationship will provide proprietary information if it can help the other party. CM4 Both parties keep each other informed about events or changes that may aect the other party. Cooperation (Morgan and Hunt 1994) CL1 We cooperate extensively with this customer with respect to product design.

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CL2 CL3 CL4

We cooperate extensively with this customer with respect to process design. We cooperate extensively with this customer with respect to forecasting and production planning. We cooperate extensively with this customer with respect to quality practices.

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Adaptation (Heide and John 1992) A1 Gearing up to deal with this customer requires highly specialized tools and equipment. A2 Our production system has been tailored to meet the requirement of this customer. A3 We have made signicant investments in tooling and equipment that are dedicated to our relationship with this customer. A4 Our production system has been tailored to produce the items supplied to this customer. Trust (Larzelere and Huston 1980) T1 Based on your past and present experience, how would you characterize the level of trust your rm has in its working relationship with this customer? T2 We feel that this customer can be counted on to help us. T3 We feel that we can trust this customer completely. T4 This customer has a high level of integrity. Competitive intensity (Slater and Narver 1994) CI1 Competition in our industry is cut-throat. CI2 Anything that one competitor can oer, others can match readily. CI3 Price competition is a hallmark of our industry. CI4 One hears of a new competitive move almost every day. Technological turbulence (Slater and Narver 1994) TT1 The technology in our industry is changing rapidly. TT2 Technological changes provide big opportunities in our industry. TT3 It is very dicult to forecast where the technology in our industry will be in 3 to 5 years. TT4 A large number of new product ideas have been made possible through technological breakthroughs in our industry.

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Sample convariancesestimates. C1 C1 C2 F1 F2 D1 D2 Q1 Q2 CM1 CM2 CM3 CM4 A1 A2 A3 A4 T1 T2 T3 T4 CL1 0.91 0.48 0.19 0.08 0.08 0.12 0.25 0.46 0.19 0.11 0.24 0.13 0.23 0.19 0.25 0.12 0.07 0.18 0.09 0.12 0.12 C2 1.06 0.12 0.12 0.05 0.07 0.51 0.52 0.22 0.14 0.30 0.22 0.21 0.28 0.36 0.27 0.14 0.27 0.21 0.20 0.18 F1 F2 D1 D2 Q1 Q2 CM1 CM2 CM3 CM4 A1 A2 A3 A4 T1 T2 T3 T4 CL1 CL2 CL3 CL4 B. Fynes et al.

0.98 0.36 0.07 0.08 0.13 0.06 0.23 0.16 0.26 0.17 0.28 0.14 0.16 0.11 0.23 0.26 0.30 0.21 0.29

0.77 0.11 0.41 0.16 0.41 0.05 0.02 0.11 0.02 0.13 0.07 0.10 0.06 0.12 0.01 0.10 0.08 0.21 0.10 0.15 0.05 0.07 0.02 0.15 0.04 0.15 0.11 0.13 0.01 0.20 0.06 0.12 0.06 0.27 0.06

0.59 0.04 0.97 0.05 0.58 0.09 0.09 0.03 0.05 0.00 0.15 0.06 0.15 0.10 0.15 0.06 0.32 0.01 0.36 0.06 0.33 0.10 0.01 0.03 0.14 0.08 0.12 0.08 0.14 0.08 0.05

1.35 0.14 0.09 0.25 0.07 0.19 0.31 0.35 0.38 0.03 0.16 0.17 0.19 0.12

0.73 0.22 0.35 0.23 0.27 0.10 0.16 0.08 0.19 0.23 0.27 0.23 0.28

0.46 0.29 0.17 0.16 0.15 0.09 0.12 0.17 0.18 0.23 0.23 0.15

0.63 0.27 0.22 0.23 0.25 0.21 0.22 0.30 0.30 0.29 0.26

0.49 0.09 0.12 0.10 0.09 0.18 0.20 0.25 0.20 0.23

1.07 0.36 0.49 0.36 0.18 0.26 0.22 0.23 0.39

0.99 0.51 0.75 0.11 0.18 0.18 0.18 0.24

1.11 0.48 0.11 0.30 0.24 0.17 0.25

1.05 0.12 0.16 0.20 0.21 0.18

0.66 0.24 0.43 0.31 0.25

0.59 0.38 0.70 0.26 0.39 0.55 0.2 0.24 0.30 2.15

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CL2 0.06 0.18 0.21 0.13 0.04 0.03 0.09 0.12 0.28 0.23 0.29 0.30 0.26 0.35 0.32 0.21 CL3 0.22 0.33 0.36 0.28 0.05 0.02 0.19 0.20 0.3 0.20 0.35 0.25 0.30 0.34 0.27 0.24 CL4 0.26 0.26 0.23 0.19 0.03 0.03 0.17 0.19 0.24 0.12 0.16 0.26 0.23 0.29 0.19 0.12 CI1 0.01 0.00 0.02 0.01 0.00 0.02 0.06 0.03 0.06 0.06 0.05 0.07 0.25 0.09 0.14 0.19 CI2 0.06 0.05 0.10 0.03 0.08 0.04 0.04 0.03 0.00 0.02 0.04 0.15 0.15 0.05 0.09 0.17 CI3 0.00 0.02 0.11 0.03 0.08 0.04 0.03 0.01 0.06 0.09 0.12 0.13 0.24 0.11 0.19 0.26 CI4 0.02 0.07 0.08 0.01 0.09 0.02 0.00 0.04 0.04 0.04 0.07 0.22 0.30 0.14 0.22 0.26 TT1 0.06 0.05 0.11 0.08 0.11 0.08 0.06 0.11 0.14 0.08 0.10 0.18 0.22 0.17 0.19 0.23 TT2 0.10 0.05 0.04 0.04 0.07 0.02 0.02 0.01 0.03 0.02 0.03 0.20 0.30 0.18 0.23 0.23 TT3 0.00 0.04 0.09 0.04 0.09 0.05 0.08 0.10 0.08 0.03 0.08 0.25 0.30 0.23 0.27 0.17 TT4 0.04 0.03 0.07 0.08 0.09 0.08 0.03 0.06 0.06 0.02 0.08 0.20 0.29 0.23 0.23 0.19 CI1 CI1 CI2 CI3 CI4 TT1 TT2 TT3 TT4 CI2 CI3 CI4 TT1 TT2 TT3 TT4

0.14 0.14 0.23 0.20 0.19 0.22 0.33 0.14 0.35 0.24 0.24

0.22 0.35 0.23 0.12 0.09 0.06 0.18 0.14 0.22 0.18 0.18

0.18 0.24 0.17 0.12 0.05 0.12 0.18 0.25 0.20 0.24 0.30

0.18 0.24 0.19 0.12 0.15 0.11 0.14 0.14 0.18 0.19 0.16

0.89 0.77 0.84 0.13 0.13 0.04 0.11 0.19 0.16 0.22 0.22

1.89 1.06 0.60 0.17 0.15 0.09 0.17 0.18 0.17 0.22 0.22

1.70 0.80 0.19 0.15 0.23 0.21 0.18 0.26 0.22 0.23

1.58 0.31 0.32 0.19 0.28 0.11 0.18 0.18 0.18

Supply chain relationship quality, the competitive environment and performance

1.35 0.58 0.97 0.46 0.25 0.91 0.52 0.51 0.48 0.03 0.01 0.07 0.16 0.14 0.18 0.17 0.12 0.09 0.19 0.14 0.12

1.06 0.14 0.27 0.21 0.20

0.66 0.24 0.43 0.31

0.59 0.38 0.26

0.70 0.39

0.55

3317

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B. Fynes et al.

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