Importance of buyer and supplier relationship

importance of buyer and supplier relationship

Communication in buyer-supplier relationships. Oosterhuis, M. IMPORTANT NOTE: You are advised to consult the publisher's version (publisher's PDF) if you . successful buyer-supplier relationships has primarily adopted a buyer's perspective, relationships to five strategically important suppliers have been analysed. Now a day every organization wants to live in win-win situation. These situations don't create by one section of organization in fact all of them.

November 08, ; Accepted: March 01, ; Published: The firms come barely to compete through improvements of the entire production chain.

Take your supplier relationship management to the next level for better global performance

This issue of fact brings out the network competition where the case is supply chain competition and enhances its importance, not the firms. For the last two decades, together with this importance, the supply chain in the field of production management particularly became a subject widely studied.

Despite the general popularity of the approach of supply chain within production management, the studies within tourism have not been performed with the same frequency Gengeswari et al. The successes of all members of the chain in their activities are also important within the production field. But in the service sector the concurrency of production and consumption of the service makes the compensation of faults impossible while the possible diverse defects and faults during the production of the goods can be cured before reaching the consumers.

Also for the tourism as a typical service sector, it is substantially important that all members of the supply chain execute their duties strictly, accurately and punctually.

Within tourism supply chain, the buyer-supplier relationships which are composing the first stage of the supply chain is critically important in success of the chain. In order to generate an effective supply chain and create a competitive advantage, the examination of the importance and the structure of buyer-supplier relationship is required Gules et al. In this context the matters which is forming the buyer-supplier relationships and how those became different in according to the divers features of the hotels, have been studied.

The research on tourism supply chain studies are about mostly upstream of the chain Kozak et al. A small part of the tourism supply chain studies were made on the buyer-supplier relationship Tektas and Kavak, ; Tao et al.

Therefore, there is a gap in the literature about this issue.

importance of buyer and supplier relationship

In the rest of this study, the tourism supply chain literature is firstly reviewed and then the results of the research about buyer-supplier relationships among the tourism firms in Cappadocia Region are included.

The tourism supply chain is an entire set of activities that conducts the resource sharing, cost reduction and constitution of customer value within the whole tourism activities including the product, money and information flow which affect the tourism products and tourist experiences Chen and Yi, The definitions of tourism supply chain available in literature from different authors are also presented in the Table 1.

Tapper and Font, ; Zhang et al.

Buyer-Supplier Relationship in Tourism Supply Chains: A Research in Cappadocia Region in Turkey

From a wider perspective Piboonrungroj and Disney and Chen and Yi have highlighted the existence of numerous enterprises and the cooperation between them. A simple structure of the tourism supply chain is presented in the Fig.

The main members of the tourism supply chain are accommodation companies, transportation companies, food and beverage companies, recreation companies, shopping companies, travel agencies and tour operators Zhang et al. According to this, second layer suppliers which generate the first ring of the chain are the manufacturers of food, furniture, equipment, water and energy etc.

The tour operators provide these services through travel agencies or directly to the consumers. The tour operators firms that arrange, schedule and offer the tour package for sale directly or through sub dealers, in other words they assume the role of tourism service distribution.

The accommodation companies are the tourism firms that mainly give supporting services such as accommodation, food and recreation services to the persons that are away from permanent residence. As also presented in the Fig. Therefore, the studies regarding tourism supply chain are limited in literature.

importance of buyer and supplier relationship

Among these studies, Zhang et al. They have described the concepts within the tourism supply chain management and defined the main problems and the marks of tourism products. They have defined these barriers as: Hong and Zailani have mentioned the tourism supply chain components, explained tourism supply chain structure and its elements.

They have defined the implementations of service-supply chain in six activities and adapt them to the tourism supply chain. Da Costa and Carvalho have reviewed the sustainability of tourism supply chain. They examine the tourism supply chain by evolving out of the value chain approach have defined accordingly the tourism activities and products and have stated the tourism supply chain structure.

Other studies about the tourism supply chain management are mainly about marketing side of the chain Kozak et al. On the other hand, the number of studies that are including the buyer-supplier relationships within the tourism supply chain is quite few.

The buyer-supplier relationships of the tourism supply chain management: In literature, the relationships between tourism supply chain members split generally into two: The definitions of tourism supply chain Fig.

Tourism supply chain management Sigala, The similar split is valid also for buyer-supplier relationships. In competitive-oriented relationship, communication and cooperation between the supply chain members are shaped in accordance with the requirements and the information sharing is largely restrained and limited. In this relationship the members of the same chain can act as competitor.

There is a number of suppliers and only product features, quantity and price information are provided to the suppliers. Because of there is no influence by the suppliers on the product design, the design features on how to produce and physical features of the products are elaborated by the buyer when ordering to the suppliers Shapiro, In cooperation-oriented relationship, win-win approach has been adopted between the chain members.

So that chain members acting as business partners. Consequently, through the correct information flow and trust the consumer needs are supplied quickly and on time. Within the cooperation-oriented relationship the earning can be increased along the chain. The number of supplier is quite less than the competitive-oriented approach, the long-term relationship is accepted along with acting more selective. During the supplier selection, the buyer firms specify the criteria to be used. Buyer firms evaluate and classify the supplier firms and consequently set the type of upcoming relationships to be different based with the supplier features.

Through this, the cooperation-oriented relationship eliminates the stressed atmosphere born by competition-oriented conventional relationship and lead to new relationships between the parties that are based on trust and partnership. According to Spekman et al. In cooperation-oriented relationship, the main purpose of the firms is to realize the zero-defect production with the total minimum production cost Shapiro, The studies based on buyer-supplier relationships within the tourism supply chain are very few in literature Tektas and Kavak, ; Yildiz et al.

Among these, Tektas and Kavak have researched the influences of the relationship quality during supply process between the suppliers and the hotel managers operating in the tourism sector in Turkey on the value about that supplier. At the end of the study, in according to the relationship quality they have arrived at the positive and expressive influence of the perceived value by the hotel managers born by the trust, the loyalty, the information sharing and the communication.

Similarly, Yildiz et al. They have determined that the hotels consider the innovation, the competition, the contribution to institutional development, the power of relationship, the speed and flexibility and customer relationships factors in improving their relationships with their suppliers.

They have found that the reputation, the after sales services, talent and popularity, price policy and the confidence are considered within the buying activities. The study has been performed in the Cappadocia Region that is among the important tourism areas in Turkey.

The tourism business certificated hotels in the Cappadocia Region are determined as the population of the study. All of the total 62 hotels are participated the study.

importance of buyer and supplier relationship

The data were collected by face to face interviews with the top managers or the purchasing managers of the hotels through a standard questionary. Since improving the questionary, the empirical studies based on buyer-supplier relationship are not found from the detailed review within the tourism supply chain literature. By this reason, the various studies Doney and Cannon, ; Krause, ; Li et al. What supplier relationship management models offer the best results? There are three groups of interaction types.

First is the critical cluster group, which are the supplier relationships that buyers should nurture: This relationship thrives on a shared vision and willingness to act as one smoothly running extended enterprise. This relationship needs regular communications and good timing to identify opportunities for exclusivity and provide the supplier with opportunities to identify buyer actions and plans that could be mutually beneficial.

These are dominant suppliers that offer the potential to innovate jointly to develop new products or services. These suppliers offer great ideas and innovation, but need to consolidate their basic performance. This is a stable, mutually profitable relationship and will continue as long as it is provided everything it needs to continue performing at its current level.

This relationship is relatively low cost and hassle free, but complacency could put the relationship at risk.

There is a need to ensure the supplier believes it is a valued team member. This relationship requires the right balance between investment and returns.

These organizations need incremental improvements to increase value and performance to world-class levels. These suppliers recognize the value of the relationship and are willing to compete and improve to gain more business. This is a relationship where suppliers require clear communication about expectations, how they can be more effective and their future strategic potential. These suppliers could be replaced by other suppliers if investment is costlier than potential returns. However, the preference for the buyer is to provide opportunities for these suppliers to attain Harvest status.

The problematic suppliers are learning opportunities to identify and fix what is wrong and improve relationships with suppliers if they are willing: When a supplier has ongoing performance issues and is unable to improve, it will require implementation of the exit strategy.