Supplier Relations and Supply Chain Performance: an Exploratory Empirical Study of Financial Services Processes

Supply chain management has increasingly been recognized as a key driver of overall operational and financial performance. In this study we focus on supplier relations in financial services processes and empirically examine the relationship between supplier relations and supply chain performance using a unique database with a sample of 108 financial services processes. Our results show that, after controlling for supplier efficiency and responsiveness, use of information technology, electronic information-sharing, and supplier type, better supplier relations are associated with satisfaction with overall supplier performance. However, the “relational” components of the relationship (cooperation and long-term commitment) are correlated with satisfaction with overall supplier performance, while the “operational” components of the relationship (high degree of coordination, information-sharing, and feedback) are not.