Relationship quality and supplier performance in food supply chains

Abstract

This research explores how agrifood supply chains can improve relationship quality and supplier performance in order to consistently meet consumer demands for quality, availability and credence attributes such as sustainability animal welfare and provenance. The research where possible used existing relationship quality and supplier performance constructs and developed new or adapted constructs where necessary. These constructs where validated using principle component analysis and confirmatory factor analysis. Finally the relationship between supplier characteristics, relationship quality and supplier performance was analysed using structural equation modelling.

Preliminary results showed that relationship quality was an important factor to mitigate the effects of dependency created through specific investments. Where processors took advantage of specific investments and used coercive power this had a negative effect on relationship quality. Supplier loyalty and communication was highly related to relationship quality, as was farm profitability. The results also indicated that to consistently meet consumer demands for quality, availability and credence attributes require motivated suppliers with management capability to meet higher product specifications and less flexible delivery schedules.