Manufacturer-supplier relationships: an empirical study of German manufacturing companies

Effective management of suppliers is one of the ways manufacturing companies can improve their performance. Typically, it has been argued in the literature that close relationships with suppliers should be developed, in contrast to the traditional price-driven transactional relationships. However, there has been relatively little empirical research on how supplier management is applied. This paper presents research probing how manufacturers manage their suppliers and takes a sample from Germany – which has a large manufacturing sector. In-depth interviews with purchasing managers were used to understand whether relationships with suppliers were being utilised. The analysis of the data indicates that a significant portion of the companies surveyed had experienced a change in their relationship with suppliers in the last few years. In the main, relationships had become closer and the use of partnerships was in evidence.
The research results have implications for German manufacturing companies, as they indicate the potential for improving performance through the greater adoption of best practices in the area of supplier management. The research results indicate the need for German manufacturers to adopt leading-edge practices in the area of supplier management. Although exploratory in nature, the investigation demonstrated the need for researchers to better understand the range of relationships in a typical manufacturer's supplier base.