Purchaser's perspective of environmental uncertainty in the international manufacturing products supply chain
Creators: name: Caldera-Noriega, Juan-Bautista
Publisher: name: RMIT University
Year: 2024

description: International companies are increasingly taking advantage of the benefits of globalisation such as continuous improvement in transport and communication technologies that in turn lower transportation costs and decrease logistical difficulties. However, the international environment includes business uncertainty in the form of exchange rate volatility as well as political and economic issues. Moreover, ongoing reduction of trade barriers is reversing the previous tendency to integrate business vertically, shifting international business schemes towards outsourcing all except what the company consider its core competence. Supply chain management is a strategic concept that considers the behavioural and political dimensions of conflict and dependence at the purchaser-supplier interface. Nevertheless, there is substantive ambiguity regarding its actual practice. Furthermore, althoug h international purchasers are increasingly becoming more important, the purchasing side of international trade remains largely ignored in empirical research. <br><br>This study focuses on understanding the complexity surrounding the commercial relationship between purchasing executives and foreign suppliers. The aim is to investigate what key factors are associated with uncertainty at the cross-national purchaser-supplier interface. Of interest to this research is how purchasing executives deal with those variables. <br><br>The literature review addresses the discussions of the constructs as it informs the development of hypotheses investigating patterns arising from their interactions. The result was a theoretically driven model addressing the complexity of the purchaser-supplier interface. A survey was conducted to collect data from the membership of a nation-wide professional body of Australian purchasing executives. The richness of the management reality was approached by having recourse to systems theory and the realism paradigm. The model was tested and discussed using structural equation modelling, the supply chain management literature and the responses and comments of the participating purchasing executives buying from over twenty countries.<br><br>The results include purchaser's perceptions regarding five latent variables and their concurrent interactions within the uncertainty surrounding international trade. The factors are culture affinity, the strength of the commercial relationship, quality reliability, ISO 9000 certification and the country of origin effect. Findings indicate that culture affinity is particularly important for purchasing executives and that it is a significant driver of the commercial relationship with foreign suppliers of manufacturing products. Nevertheless, culture affinity does not significantly influence perceptions of quality reliability. In contrast, commitment, cooperation and conflict management have a significant influence when assessing foreign supplier's quality reliability. Trust, traditionally seen as a social aspect of the commercial relationship, was found structurally embedded in the perceptions of quality reliability together with technical dimensions of quality. The commercial relationship between Australian purchasing executives and foreign suppliers was found to have a high level of maturity. However, the purchasers showed no orientation towards commercial equity, and cooperation was found to be incomplete, overlooking working on cost optimisation. Further, a level of commercial partnership has not been established. It is suggested that a relational approach in the international supply chain is a necessary, but insufficient, condition to progress to the level of commercial partnerships. <br><br>The study shows that Australian purchasers' perceptions regarding ISO 9000 are surrounded by controversy. However, the Standard is still considered a credible quality management system tool that enhances supplier's competitive position. Additionally, the majority of the Australian purchasing companies were not engaged in a low-cost country sourcing strategy. Overall, it can be said that the country of origin effect and ISO 9000 certification did not have a significant influence on quality perceptions within the context of an uncertain international environment. <br><br>By taking a multivariable and multidisciplinary perspective, this research contributes to a deeper understanding of mature commercial relationships in the international supply chain. The findings provide valuable information that assists organisations to tune or balance the supply management philosophy principles in the uncertainty associated with global trade.<br>