Acknowledgement

In the beginning I would like to thank Allah Almighty for giving me the capacity to do the
work on the thesis. I thank everyone who helped me throughout the thesis in one way or another
way. I would like to thank my supervisor Mr. Raja Khalid for guiding, encouraging &
motivating me to work hard. His direction and advice helped me to complete the analysis,
exploration, research and writing of the thesis.

I am thankful to the respondents who took out time to fill out the questionnaire. I would also
appreciate and thank the respondents for providing the accurate and transparent information. I
am also thankful to my friends whose critical review and challenges made me work even hard
and overcome the error and mistakes that were present in my work.

I also want to take opportunity to thank my family specially my mother due to whose prayers
I was able to be successful. She also encourages me that I can achieve any task that is allocated
to me and encouraged me to work hard and whole heartedly. My mom has been my role model
during the whole work.

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 Abstract

Tracking out the professionals who are experienced in supply chain environment is very less
especially in Pakistan. In Pakistan we mostly have the families who are running their
businesses for quite a long time and most of them are still working on old fashioned techniques
which were at some time very fruitful but from time to time things are changing and it is
required by the change of time that things need to be upgraded.
Accepting the change is the hardest thing to be done in the society whether is beneficent or not
without realizing anything people start opposing it as they consider themselves masters of their
old routine and they are used to that routine, but the nations or the societies who adopt these
changes with time and upgrade their infrastructures accordingly start ruling over the other
nations.
Now this study focuses on measuring the impact of building strategic buyer-supplier
relationships and information technology over performance of supply chain. The nature of
study is quantitative in nature as the main purpose was to measure the impact of strategic buyer-
supplier relationships and information technology over the performance of supply chain
industry.

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Contents
CHAPTER 1 ........................................................................................................................................... 4
INTRODUCTION .................................................................................................................................. 4
1.1 Background ....................................................................................................................................... 4
1.2 Gap Analysis ................................................................................................................................. 5
1.3 Problem Statement .................................................................................................................... 5
LITERATURE REVIEW ....................................................................................................................... 8
2.1 Buyer-supplier relationships ............................................................................................................. 8
2.2 Strategic Buyer–Supplier Relationships ..................................................................................... 10
2.3 Role of Information Technology............................................................................................. 14
References ............................................................................................. Error! Bookmark not defined.
 CHAPTER 1

INTRODUCTION

1.1 Background

The Supply chain management (SCM) focuses on improving performance by eliminating waste
from it’s processes and efficient use of internal as well as external supplier capabilities and also
by using technology, in order to create a coordination in supply chain as well as competition
(Tan, 2001). Different firms are focusing towards strategic relationships among buyer-supplier
to in order to improve effectiveness and efficiency all across the value chain and to intergrate
the coordination of physical distribution fuctions among suppliers in order to get greater
benefits.

The part of SCM that implements, plans , and maintain the efficient, forward as well as reverse
flow and also the storage of services, goods and relevant information between the point it is
originated and the point it is consumed to meet the requirements of the customers is known as
Logistic management (Lambert, 2008). As we are all aware with the increase in market
globalization in the years 1980 and 1990, Companies strated viewing logistics in a different
way and consider it as a source through with they can increase their distribution coverage and
also can create competitive advantage (Carrus, 2011). On the other hand SCM is placing a
premimium to adopt cross-functional, external view of logistics (Manrodt, 1997)

Several evidences support the conceptual linkages between logistics and improvement in the
performance of a firm (Paulraj, 2007), the empirical research which establishes the linkage
between strategic supplier-buyer relationships, role of information technology and intergration
in logistics is scarce. To provide a bridge for this gap in literature, this study will explore the
impact of buyer-supplier realation ship and information technology over the performance of a
firm’s agility.

Competitors are putting pressure on firms in order to improve quality of services, performance
in delivery and showing rapid responsiveness while reducing the cost. In response to such
activities the firms are exploring different ways to show leverage in their supply chain, and
other than that they keep on evaluating their supplier’s role in their activities. One result is that
increasing the outsourcing activities doesn’t represent core competencies of the firms
(Swafford, 2008). It helps the firms to utilize their resources in a better way by increasing value
added activities. It also helps them to be more responsive as well as flexible to the changing
needs. It’s not false to say that outsourcing exploit firm’s capabilities, technologies, efficiency
of suppliers and their expertise as well. Some companies think managing their suppliers means
reducing the number of suppliers and to streamline their supplier base by developing close
relationships with their suppliers (Yeung, 2008)

If we observe the operational level , we can see the benefits which we can get by developing
close relationships with our suppliers as it will help us in improving quality or delivery cycle ,
low cost or some other combinations. Whereas at strategic level, it will lead to improvement in
quality of product along with innovation, increase in market shares as well as enhanced
competition with competitors. This improvement can be shown in financial performance of the
firm. Different authors have examined the role or the importance of buyer-supplier
relationships in general but the research started in industrial marketing era (Lamming, 2000)
with the theoretical framworks such as TCE (transaction cost economics) (Grover, 2003) also
the view of firm on the basis of it’s resources (Hult, 2002) are used in order to prove the reason
of why the firms are outsourcing and the impact on development of relationship.In the last few
years an interest towards studying the buyer-supplier relationships is considerable(SBSR).
Specifically identifying the point where these types of relationships are fruitful, the dimensions
of relationships, and also focusing on how these decisions can be a cause of competitive
advantage have received a great attention in literature (Kannan, 2006). Several evidences
support the conceptual linkages between logistics and improvement in the performance of a
firm (Paulraj, 2007), the empirical research which establishes the linkage between strategic
supplier-buyer relationships, role of information technology and intergration in logistics is
scarce. To provide a bridge for this gap in literature, this study will explore the impact of buyer-
supplier realation ship and information technology over the performance of a firm’s
agility.Eventhough the literature is extensive but still questions remain. For Example, we have
little evidence regarding the impact of supplier selection (a key attribute) on performance of
the built relationship. We also have limited evidence about what type of benefits a firm gets
with this type of relationships, and that how it’s measures the firm’s buying performance. So,
this study will focus on that the positive outcomes from the buyer-supplier reationships are
directly dependent on both the used criteria for supplier selection as well as the efforts towards
engaging the supplier results in the sucessive relationship.This study will also focus on that a
positive relationship will directly shows impact on the buying firm’s financial as well as market
performance and in order to prove it a structural equation model will be used over the data from
survey being captured from the senior purchasing and materials management
professionals.Furthermore the research methodology, results and implications of the study will
be further discussed in the upcoming sections of this thesis.

1.2 GAP ANALYSIS

The empirical research which establishes the linkage between strategic supplier-buyer
relationships, role of information technology is scarce. To provide a bridge for this gap in
literature, this study will explore the impact of buyer-supplier realation ship and information
technology over the performance of a firm’s agility.
We have little evidence regarding the impact of supplier selection (a key attribute) on
performance of the built relationship. We also have limited evidence about what type of
benefits a firm gets with this type of relationships, and that how it’s measures the firm’s buying
performance. So, this study will focus on that the positive outcomes from the buyer-supplier
reationships are directly dependent on both the used criteria for supplier selection as well as
the efforts towards engaging the supplier results in the sucessive relationship.

1.3 PROBLEM STATEMENT

Different organizations in Pakistan are facing many problems now a days which involve
different queries from vendors regarding face to face negotiations, cost encored during order
processing, and inventory management by the firms to it’s customers. This results in delay of
shipping orders, and can cause an emergency regarding availability of inventory. Due to these
delays the production scheduling effects the Supply chain performance, and these delays effect
the relationships.
By adding information technology as an effective measure helps control many of these complex
issues. But still the investments made for information technology doesn’t guarantee the
organizational performance. In real the technology adopted by one firm is easily duplicated by
some other firm and due to this it won’t be a competitive advantage anymore.

1.5 RESEARCH QUESTIONS

Following are the research questions:

i. What is strategic buyer-supplier relationship ?
ii. How can supply chain performance is measured ?
iii. Does IT has any influence over supply chain performance ?

1.6 RESEARCH OBJECTIVES

i. To show the impact of information technology on supply chain performance.

ii. To show the impact of Strategic buyer-supplier relationships on supply chain
performance.

1.7 SIGNIFICANCE OF STUDY

This expectations from this study are significant to all researchers, society and for all the
organizations in the following ways;
i. The findings out of this study will help other researches for further study
I. This study will help the researchers to acquire knowledge relevant to the area of study.
II. This study will show the impact that how information technology is beneficent with an
organization.
III. This study will show the impact that how Strategic buyer-supplier relationships are
beneficent with an organization.
IV. This study will enable to overcome the problems related to operations by using
information technology in the activities associated with the SCM and will also provide
solutions to the problems.
V. This study will enable to overcome the problems related to SCM by developing
strategic buyer-supplier relationships and will also provide solutions to the problems.
VI. This study will help to propose different methods and techniques which will be effective
while building strategic buyer-supplier relationships in the supply chain.
VII. This study will help to propose different methods and designs which will be effective
while using information as well as communication technology in the supply chain
management.
VIII. This study will be used as a reference for the researchers especially related to the field
of procurement and participation of suppliers and also to other related fields of supply
chain to show the impact of information technology as well as of Strategic buyer-
supplier relationships.

STRUCTURE OF THESIS
This thesis comprises of different chapters out of which Chapter No.1 consists of introduction,
with background study, the gap analysis, the problem statement, the research questions, the
objectives of the research, and the significance of the study. Chapter No. 2 consists of literature
reviews which shows the efforts made by other writers and researchers towards the study, it
also includes the information gathered from different theories, the empirical studies as well as
the conceptual framework. Chapter No.3 consists of the research methodology, the research
design, the techniques of sampling, sample size, the methods of data collection, different types
of data, the ethical issues, the reliability and also the validity of the data, and also the analysis
made out of data. Whereas Chapter No.4 includes the findings , discussion on the study, the
analysis of the data and also the interpretations of the findings which are based upon the
research questions, In Chapter No. 5 comprises of summary of the study, conclusion drawn
from objectives, also the synthesis of the calculated findings, the recommendations and also
the are for further research.
 CHAPTER 2

LITERATURE REVIEW

2.1 BUYER-SUPPLIER RELATIONSHIPS

Strategic buyer-supplier relationship reflects a sign of recognition by the buyer as well

as the supplier that at certain purchases , cooperation is way more beneficial rather than
competition. While the study of relationships has gained more attention with the literature, it
is obvious that a relationship is not a unidimensional construct. Still there is a discussion
regarding the term relationship implies. (Simatupang, 2002), For example, has defined four
different types of relationships; Self Centered Relationship (It is characterized according to the
needs of the firm), Personal Loyalty Relationship (Characterized by the mutual commitment
and responsibility), Mutual investment (Characterized by the long term engagement for
strategic advantage), Political Control (Characterized by the mutual dependence as well as by
achieving high integration levels). As per the definition of (Donaldson, 2000) relationships
are characterized by the developing mutual cooperation, recurrent, minimum interaction, or the
hierarchical type of relationships. While for certain transactions the self-centered or the discrete
type of relationships, which are typically characterized as arms length, which may be
appropriate for others, but more collaborative type of relationships may be much more
appropriate.The evidences from the literature regarding strategic supplier alliances, a specific
manifestation of a long-term relationship, collaborative relationships, suggests that buyers
support closer relationships when they want to have an influence on the supplier delivery
schedules as well as the quality (Croom, 2000) Suppliers on the other hand will be motivated
when they built the secure and long-term relaions and try their level best to create a good name
by providing quality.
When we have to measure the success rate of strategic buyer-supplier relationship it is
import to catergorise the outcomes which will directly derive form realationship itself and the
also to note down the braoder level of outcomes that a firm achieve. Whereas the measurement
of performance like quality and improvements in lead time, in reduction of cost, and for overall
financial as well as the performance of market can be measured at the firm level. However it
is very difficult to measure the performance of specific initiatives and the actions, and
specifically when it comes to individual strategic buyer-supplier relationships. We have three
noticeable exceptions, still literature regarding linkages between performance and relationships
have focused on measuring the firm’s performance rather than measuring the perfromance of
the relationship. Another researcher (Kwon, 2005) while doing his research has examined the
effects in continuity of relaionships, the specificity of asset, and unpredicatablity of the volume
over the value and percentage at the end value that is being paid to the supplier, and the duration
of a relationship. Some other researchers like (Maloni M. &., 2000) & (Benton, 2005) while
doing their research have examine the strength within a relationship of buyer , supplier and the
whole supply chian performance.

The recent literature on strategic buyer-supplier relationships focuses either on the

underlying benefits of the relationships, or by measuring the impact on the performance.
Relationships have been characterized in a number of ways, which includes strong relationship
(Kannan, Buyer-supplier relationships: The impact of supplier selection and buyer-supplier
engagement on relationship and firm performance., 2006),closeness (Larson, 2000). The
characterization has also been examined or verified from buyer (Kannan, Buyer-supplier
relationships: The impact of supplier selection and buyer-supplier engagement on relationship
and firm performance. , 2006), Supplier’s end (Williams, 2007) and also from dyadic (Cao,
2011) point of view. From time to time different themes have been emerged and are still
emerging. Different traits like commitment, tust, flexitblity, communication, coordination,
dependence and collaboration are mostly considered to show the closer meaning to
relationships. Similar traits can also be observed in the literature of suppliers alliance (Kannan,
Buyer-supplier relationships: The impact of supplier selection and buyer-supplier engagement
on relationship and firm performance. , 2006). The underlying benefits behind the above
mentioned traits is that in the absence of these traits the supplier-buyer outcomes will be
limited. Without any sign to show the willingness to work together in order to increase value
with in the supply chain process , buyers and suppliers will look beyond to for their own
personal interests. However willingness to work together and by sharing risks will results in
achieving benefits not only in quality, delivery, cost and productivity, but will also help in
product development, technology deployment and to solve different problems. (Kannan,
Buyer-supplier relationships: The impact of supplier selection and buyer-supplier engagement
on relationship and firm performance., 2006).
As per the definition of (Donaldson, 2000) relationships are characterized by the
developing mutual cooperation, recurrent, minimum interaction, or the hierarchical type of
relationships. While for certain transactions the self-centered or the discrete type of
relationships, which are typically characterized as arms length, which may be appropriate for
others, but more collaborative type of relationships may be much more appropriate.The
evidences from the literature regarding strategic supplier alliances, a specific manifestation of
a long-term relationship, collaborative relationships, suggests that buyers support closer
relationships when they want to have an influence on the supplier delivery schedules as well
as the quality (Croom, 2000) Suppliers on the other hand will be motivated when they built
the secure and long-term relaions and try their level best to create a good name by providing
quality.
Many studies have proved linkages between performance and relationship building. These
studies have proved that the buyers who have built successful relationships got financial gains.
(Kannan, Buyer-supplier relationships: The impact of supplier selection and buyer-supplier
engagement on relationship and firm performance., 2006) and have also achieved lead time
performance (Larson, The use and impact of communication media in purchasing and supply
management., 2000). On the other hand these relationships have resulted in improving
customer loyalty and responsiveness as well (Martin, 2003), innovation patterns (Leuschner,
2013) also increase in quality (Swafford, Achieving supply chain agility through IT integration
and flexibility., 2008). As per supplier’s opinion, it helps in reducing inventory cost (Maloni,
1997) reduction in lead time (Prajogo, 2012), also in improvement of process/product design
as well as quality (Prajogo, 2012) also enrichment in financial as well as prospects of future
relationships (Duffy, 2004). The successful relationships have also resulted in improvement
of supply chain performance (Van der Vaart, 2008). The literature regarding supplier’s alliance
have also proven their benefits which they get in cycle time and especially at the time of new
product development time (Tan, A framework of supply chain management literature., 2001),
in terms of performance in delivery (Kannan, Supplier alliances: differences in attitudes to
supplier and quality management of adopters and non-adopters., 2004), in terms of flexiblity
(Sanders, 2007) and availabity of the product to increase customer satisfaction (Barratt, 2004)
. It also results in reduction of transactional costs (Kannan, Buyer-supplier relationships: The
impact of supplier selection and buyer-supplier engagement on relationship and firm
performance., 2006), also results in improvement of technology (Milgate, 2001), and also
transfer of technology (Das, 2006). When we have to measure the success rate of strategic
buyer-supplier relationship it is import to catergorise the outcomes which will directly derive
form realationship itself and the also to note down the braoder level of outcomes that a firm
achieve. Whereas the measurement of performance like quality and improvements in lead time,
in reduction of cost, and for overall financial as well as the performance of market can be
measured at the firm level. However it is very difficult to measure the performance of specific
initiatives and the actions, and specifically when it comes to individual strategic buyer-supplier
relationships. We have three noticeable exceptions, still literature regarding linkages between
performance and relationships have focused on measuring the firm’s performance rather than
measuring the perfromance of the relationship. Another researcher (Kwon, 2005) while doing
his research has examined the effects in continuity of relaionships, the specificity of asset, and
unpredicatablity of the volume over the value and percentage at the end value that is being paid
to the supplier, and the duration of a relationship. Some other researchers like (Maloni M. &.,
2000) & (Benton, 2005) while doing their research have examine the strength within a
relationship of buyer , supplier and the whole supply chian performance.

2.2 STRATEGIC BUYER–SUPPLIER RELATIONSHIPS

The strategic buyer-supplier relationships focus towards steps which will increase the relational
characteristics between the members of supply chain and will also create a win-win situation
for the supplier as well as the buyer firm (Paulraj, Strategic supply management and dyadic
quality performance: a path analytical model., 2005). As the complete supply chain relies on
trust and commitment (Kim, 2010), this study focuses on three main factors (the limited
number of suppliers , the orientation of the long-term relationship and the communication
within a firm) these are the important factors to foster commitment and trust (Chen, 2004)
which will help to determine the strategic realationship of buyer-supplier. A brief theoretical
base for the above mentioned three factors is described below.

Now a days companies show their interest to work closely and cooperatively with only
limited number of suppliers as compared to the traditional way of keeping large number of
suppliers (Paulraj, Strategic buyer–supplier relationships, information technology and external
logistics integration., 2007) Different researchers have noted down this relational contractting
approach is a necessary element for building strategic buyer-supplier relationships (Paulraj,
Strategic buyer–supplier relationships, information technology and external logistics
integration., 2007). Other than increasing trust and reliability , this approach provides benefits
including
1. It will be easier to contact few suppliers in case of short notice rather than contacting
large number of suppliers
2. This will help to increase economies of scales depending upon volume of the order,
3. The capacity dedicated and
4. Better market penetration and customer services (Yeung, Strategic supply
management, quality initiatives, and organizational performance., 2008).

Now a days suppliers prefer to go for long-term contracts and also provide the
information regarding their processes, the quality of performance and even don’t hesitate to
share their cost structure with the buyers (Chen I. J., 2004). This type of close relationship
promotes the channel participants who share their risks and also share rewards are are actively
showing interest towards the long-term relationship (Cheng, 2006). Based on the literature
review this study suggests to the companies that they will gain benefits once they started doing
bussiness of higher volume with limited or less numbers of suppliers by utilizing long-term
contracts (Paulraj, Strategic buyer–supplier relationships, information technology and external
logistics integration., 2007). As per the point of view of (Van der Vaart, A critical review of
survey-based research in supply chain integration., 2008) by building long-term relationsips
between buyer and the supplier will increase the intensity of their coordination, which includes
the provision of technology, and the managerial assistance and also by sharing information
with each other also the exchange of information during the product development production
stage. The suppliers with the long-term contracts become a member of a managed chain and
will made an effect on the competitiveness of the complete supply chain cycle (Wu, 2010). By
making the inter firm communication system effective so it will be characterized as a frequently
used activity, a genuine or true reliable source, and will involve both the buyer and the supplier
(Chiang, 2012). The studies of different researchers have concluded that when the
communication process of a buyer and a supplier is effective and they started sharing real time
information relevant to the procurement of material and the issues related to the product design
than it will results in
1. Improving the quality of a product
2. Reducing the response time of a customer
3. Reducing cost to protect against any opportunistic existance
4. Increasing cost savings by launching a variety of designs and efficieny of the operations
(Paulraj, Strategic buyer–supplier relationships, information technology and external
logistics integration., 2007).

The industrial firms save their time and space through logistics (Prajogo, Supply chain
integration and performance: The effects of long-term relationships, information technology
and sharing, and logistics integration., 2012). The intergration of logistics can either be internal
or external or can be a mix of both (Stock, 2000). By the term internal logistics intergration it
means the intergration of the fuctional departmenst within a firm and on the other hand external
logistics intergration is explained as the intergration of logistical activites across the boundaries
of a firm. This shows
1. Transforming a manufacturing company to meet the complete supply chain cycle ,
rather than and individual company it will act as a competitive unit (Stock, Enterprise
logistics and supply chain structure: the role of fit., 2000), also
2. The limit to which all the logistic activities that took place within a firm will be
intergrated and will show the overall activities of the customers as well as of the
supplier. When there is higher involvement of external logistical intergration it will be
characterized as effective sharing of logistics realted communication, a strong
coordination of the firm’s logistical activities with the customer as well as with the
suppliers and a clear distinction of the logistical activities of both the customers and the
suppliers (Olhager, 2004). Rather than just the normal relationships , firms are focusing
to transform into partners with their suppliers (Rich, 1997). The actual reason is that
the suppliers who are within strategic buyer-supplier realtionships are motivated as
compared to the rest and also guarantee their delivery , their quality and even the cost,
and other than this they will show interest in buyers firm’s requirements and set their
operations as per the buyer’s requirement (Levy, 1997)

Strategic buyer-supplier relationships involve some informal processes which are based on
trust, real information sharing, respect for each other, equal involvement in decision making
and owning collective responsibility regarding outcomes (Chen I. J., Understanding supply
chain management: critical research and a theoretical framework., 2004). Collaboration among
buyer and supplier firms are necessary to provide high-quality of services to the customers by
ensuring delivery on time, and also help facilitates the ability to intergrate logistical activities
across the boundaries of organizations (Cavinato, 2005). Different researchers have proved
that commitment related to relationship and trust foster increase in cooperation, helps reducing
the functionla conflict and also increase intergration and decision making while keeping in
view the uncertainity and ambiguity (Kwon, Factors affecting the level of trust and
commitment in supply chain relationships., 2004). However, as the relationships between
buyer-supplier due to limited suppliers, keeping in view the long-term relationships and the
communications between the firms helps facilitating the complementary interactions between
the partners which will improve logistical coordination, we hypothesize that by buliding higher
levels of interactions and relationships will results in increased intergration of logistical
activities all across the supply chain.

2.4 Benefits of Strategic Buyer-Supplier Relationships In Supply Chain

The traditional buyer-supplier relationships supports in achieving cost saving which is done by
sourcing it to the partner who’s offering the lowest cost, it also encourages the competition
among suppliers, and by changing suppliers for lowest cost, a strategic relationship between
buyer-supplier focuses on achieving cost saving through economies of scale by placing high
volume orders, it also reduce the transactional cost by managing the buyer-supplier relationship
(Kanda, 2008). Other than the cost saving factor a strategic buyer-supplier relationship also
focueses on showing improvement in quality of the product , enhance the efficiency of the
process, increase the responsiveness of the process (Terpend, 2008) but it also helps in
increasing the rates of the newly introduced products (Croom, Supply chain management: an
analytical framework for critical literature review., 2000). As a strategic relation is built to have
long term relation so in this case a buyer can secure it’s supply especially when it’s time to
expand and to meet the rapid demand growth and it will also guarantee the long term business
for a supplier (Terpend, Buyer–supplier relationships: Derived value over two decades., 2008).
Even with the presence of so much literature review which is an evidence of how the benefits
can be attained by cooperation like a partnership but still many firms show no interest in re-
examining their relationships with their suppliers, This no interest of re-examining the
relationships have kept them away from managing their suppliers and also keep them away
from the concept of long-term partnerships which by doing so they can avail all the benefits
which are mentioned in the literature review.

2.5 THE EVOLVEMENT OF THEORETICAL LENS

To guide the conceptual as well as the empirical research the theoretical lens is being adopted
which has evolved by the passage of time. While at the earlier stages of research related to this
topic has adopted the theoretical lens which shows the guidelines for the transaction cost
economics (Olsen, 1997). The recent most researches related to this topic have moved from
the transactional cost economics towards the Social exchange theory (Wu L. C., 2014) and
also towards the Resource development theory (Hoyt, 2000).The basic assumption related to
transactional cost economics is the occurance of opportunism whenever two parties will
interact with each other (Grover, Transaction cost framework in operations and supply chain
management research: theory and measurement., 2003). The theories afterwards have less
interest in opportunism and have assumed trust as a norm, according to them trust leads to an
increase in performance and reduce the transactional cost (Simpson, 2007). This evolution has
equalise the change that how the buying firms interact practically with their suppliers. Before
the concept of strategic realionship among buyers and supplier , the buyers started minimizing
the opportunism behavior of their suppliers by signing contracts and goverance mecanism to
protect against opportunism. By the time buyers thought of establishing the long-term
relationships with their suppliers they started adopting the practices as total quality
management as well as just in time purchasing, now they started focusing on buliding buyer-
supplier relationships and took trust as a medium which not only strengthen the purchase of
raw material only but also started involving their supplier in inputs like logistical services,
financial services and also the use of information technology services.
This evolution of theoretical lens supports the research on this topic by taking benefits from
adopting many theroetical lenses either the ones which are applied or not yet applied on this
research topic. To support the idea (Seuring, 2012) gave an example that combination of
transactional cost economics and theory of resource dependence makes it easir to understand
the effects on performance made by supplier relationships itself. The buyer supplier
relationships are quite similar to the theories realted to marriage and divorce which differs from
person to person , so the same way the buyer-supplier realtionships differs from each other the
same way.

2.6 DOMINANCE OF BUYER PERSPECTIVE

A buyer is typically considered to be the one to initiate the strategic buyer-supplier
relationship and, in most cases it is considered to be the one to dissolve these relationships.
There are different cycles or stages through with the strategic buyer-supplier relationships are
built, the stages include vendor selection, with some other stages required to adopt the
perspective of the buyer which is necessary to establish the relationship (Eggert, 2006).The
decision of dissolving the relationship with the supplier totally depends upon the buyer
perception (Chen Y. S., 2019). Same way the empirical reseraches that have been conducted
on buyer-supplier relationships has adopted or accepted the buyer perspective (Carr, 1999).
But more recently the reserachers has started taking the supplier perspective and has augment
the perspective of buyer and started noticing the benefits of the strategic buyer-supplier
relationships (Thanawaritanan, 2008) or the dissolution of the relationship which is named as
strategic buyer-supplier relationships (Ford, 1980)

2.7 SAME RELATIONSHIPS BUT DIVERGENT VIEWS AND UNDERSTANDING

In strategic buyer-supplier relationships it’s not and obligation for the parties to share same
point of view or the understanding ability regarding any problem. Depending upon the
research that has been done it is formulated that the perspective of the buyer speaks for both
the buyer as well as for the supplier in a strategic relationship, it is just an assumption which
isn’t warranted. Other than the views about their relationship to each other the buyers as well
as suppliers keep a different method or technique of evaluating their performances (Chen Y.
S. 2016). This type of gap among the perception is particularly obvious when the supplier and
the buyer have a strategic relationship, different to the competitive nature (Hüttinger, 2012).
An per the example of (Maloni M. J. 1997) it is stated that it’s not necessary for the supplier
as well as for the buyer that they stay on the same page of thought within a buyer-supplier
relationship.This gap due to the differnces in perception of the partners within a strategic
buyer-supplier relationship is of high importance in reference to the conduct of the study.
2.9 ROLE OF INFORMATION TECHNOLOGY

As per (Zsidisin, 2000) point of view information technology is playing a dynamic role at
every stage of supply chain process by transforming the ways through which the activities
related to exchange are performed and also depends upon the nature of linkages. The systems
within organization are based upon communication and information technology which
enhances the legal boundaries of an enterprise (Walton, 1999). The basic of building this type
of systems is to reduce inventory and increasing quality information. Resarchers have showed
information technology to be an effective source of collaboration by grouping suppliers and
customers to create a network (Cousins, 2006). The strength of systems within and
organization are important as it helps in transformation of process which is necessary in
creation of a network (Chen I. J., Towards a theory of supply chain management: the constructs
and measurements., 2004). These information systems within an organization may include
direct links by utilizing computer to computer network with suppliers or EDI (Electronic data
interchange) systems which helps in sharing information regarding purchase orders, generating
payment invoices, sharing delivery notices or some other complex transactions within a
business like intergration of management systems related to cash, sharing of technical
information through internet, extranet or intranet (Svensson, 2007). The need of information
technology in of high importance in todays lifestyle as it not only supports strategic but also
the logistics decisions related to operations. It is necessary to replace the old data sharing
network or techniques with simultaneous sharing of information which is very fast as compared
to old techinques and bring an ease for all the members of supply chain (Chen I. J., Towards
a theory of supply chain management: the constructs and measurements., 2004).The use of
information technology provides real time information which increases the efficiency of
logistic chain and helps maintain inventory level, the avalablity of the product, the requirement
of production as well as the status of shipment (Radstaak, 1998). ). These information systems
within an organization may include direct links by utilizing computer to computer network
with suppliers or EDI (Electronic data interchange) systems which helps in sharing information
regarding purchase orders, generating payment invoices, sharing delivery notices or some other
complex transactions within a business like intergration of management systems related to
cash, sharing of technical information through internet, extranet or intranet (Svensson, 2007).
The need of information technology in of high importance in todays lifestyle as it not only
supports strategic but also the logistics decisions related to operations. The use of information
technology within the supply chain also share information about the target markets, forecasts
regarding requirement of material, and also bring an ease in delivery as well as production
schedules (Webster, 1995). Specifically utilization of information technology
1. show clear picture of collaboration in planning with the sharing of information with
the supply chain partners regarding forecasts of demand and information regarding
schedules of production which shows the activities within a suppy chain (Chen I. J.,
Towards a theory of supply chain management: the constructs and measurements.,
2004)
2. will help to link demand information which will upsteam the fuction of supply chain
and consequently the ‘pull’ strategy will facilitate the operations of supply chain
(Svensson G. (., 2007)
3. The elimnation of the activities which has no value to the partner firms (Christopher,
2004), other than that the contribution of information technology in a much better way
that it can forecast the competencies based on communication. Such as;
a) Information sharing
b) Communication by exchanging information continuously and through collaboration
(Paulraj, Strategic buyer–supplier relationships, information technology and
external logistics integration., 2007)
The study of many articles have doubt on how information technology results or supports the
firms performance, and many scholars have claimed that the contribution of IT is still
questionable (Kim D. T., 2005). The productivity of Information Technology is debatable
since 1970 (Kim D. T., 2005). Few researchers have either shown no effect or the negative
effect of information technology on the performance of firm (Kim D. T., The role of
information technology in supply-chain relationships: does partner criticality matter?, 2005).
As per opinion of (Kim D. C., 2006) 24 out of 36 firms have experienced the negative effect
in the market due to investment made on IT in less than five years of deployment. During the
survey of retailers the in-store as well as beyond-store information technology has no effect on
the performance of a store (Lok, 2005).
Due to the disappointing outcomes mentioned above the investments made on information
technology have raised many questions regarding the role of information technology in supply
chain or even within a firm (Taylor, 2006).

It refers to the level of coordination which the channel partners will efficiently keep with the
firm which is adopting the information technology systems. The coordination within the firms
implies the involvement of the members in supply chain (Kim D. T., The role of information
technology in supply-chain relationships: does partner criticality matter?, 2005). By adopting
the advanced information technology systems not on effects the firm but it will also affect the
partners as it requires connectivity with the firm (Seggie, 2006) and it helps to keep the partners
coordinate effectively (Kim D. C., Information system innovations and supply chain
management: channel relationships and firm performance., 2006). The available literature does
not focus on the effect that a firm face by adopting information technology for coordination of
activities among the channel partners in supply chain. Just to understand this concept let’s take
an example of the bank which is going to adopt ATM systems in their banks. Now by adopting
the ATM systems banks will be able to increase customer services but it’s not only and ease
for the bank as it also provide convenience to the customers by operating the ATM systems for
transaction of money. This example clearly shows the benefit for all the partners involved by
adopting this advanced technology. Likewise , the adoption of information technology in
supply chain will improve the coordination activities among the supply chain partners (Kim
D. C., Information system innovations and supply chain management: channel relationships
and firm performance., 2006).
This study will explore the role played by information technology in the firms performance as
well as in the relationships made on channel in reference to the communication system in
supply chain, in order to draw a true picture to clear the disappointments made by information
technology. The supply chain communication system is defined as a system that links the
partners with each other in order to share the activities in supply chain which include the
transactions made electronically, the quality , the cost as well as the forecasting which is done
in collaboration (Kim D. T., The role of information technology in supply-chain relationships:
does partner criticality matter?, 2005). The supply chain communication system with is
typically used shares many information systems which include ERP systems which are used
for enterprise resource planning, CRM system which is used for customer relaionship
management and AP which is used for advanced planning. One of the traditionally used
elements is EDI which is used for electronic data interchange, which has proven success
(Gunasekaran, 2004). On the other hand there are many emerging technologies which include
radio frequency exchange and the technology linked with satellites and this will play a vital
role in the communication system of supply chain.
We can generate out hypothesis based on the literature review that better integration of
logistical activities can be achieved through information technology and it will also enhance
the strategic buyer-supplier relationship as well as integration in logistics.

H2: The effect of information technology is positive on external logistical integration.

H3: The strategic buyer-supplier relationships as well as integration of logistical activities will
be moderated by the use of information technology.
2.7 Hypothesis

In this research we focus on towards the efforts needed to engage suppliers in order to establish
a conducive environment for a successive relationship, it will positively and directly influence
the success of a relationship. The lack of how to measure the success of a relationship , we will
define it in terms of buyer’s point of view that a successive relationship will improve
performance. As different scholars have proven the use of a perceptual measure in empirical
research and shows consistency with the relevant prior work done. For Example, As per the
reference of (Swafford, Achieving supply chain agility through IT integration and flexibility.
, 2008) in which he has observed the perception of a buyer on how the buyer feel satistaction
form a relationship. Similarly, (Benton, 2005) have successfully measured the perception of
satisfaction with a partner and also the improvements in the performance as compared to the
absence of a relationship
So in this study we propose;
H1: Buyer-supplier engagement (BSE) positively impacts the success of SBSR.

3.8 Research Design

The purpose of the study is to check the impact of strategic buyer-supplier relationships over
supply chain performance. The extent of researcher interference is minimum as respondents
were given questionnaire and left alone to fill up the questionnaire. The study setting is non-
contrived as the research has been done in the natural setting where the work activities continue
normally. The time horizon for this study is cross-sectional because data gathered is just once.

2.8 Theoretical Framework

In the developing countries like Pakistan , information technology is new to many industries
but once it’s adopted it will show numerous impacts on activities associated with it. The
following impacts are just few of them among some many impacts which are calculated while
implementing or applying the system few of those impacts are technical trainings of the
resources, finance required for adoption of information technology systems, hardware as well
as software expenses including the cost of computers, installation of setup and developing
linkages among departments, Networking infrastructure, management of the assets related to
information technology and many more.
The same as information technology , in the developing countries like Pakistan Strategic
relationship building is new and we don’t rely on it due to certain issues which may include,
trust to get a support every time, trust of delivering the supply on time, trust on providing
quality product whenever required, rapid change in demand requirement will be filled by our
suppliers or not, opportunism in buying behavior as for many of us in Pakistan we consider
price as an important factor or a point from where we can generate our revenue, so we mostly
think of our own benefits due to which the suppliers as well as the buyers don’t trust each other
and afraid of relying on each other, Many competitors provide less cost just to get into business
and won’t keep the same prices for long-term, and many more.
The above mentioned variables are both independent but shows a great impact when it come
to measuring the performance of supply chain performance.

Information Technology
(IT)
Performance in Supply Chain
(P)

Strategic Buyer-Supplier
Relationships
(SBSR)

Figure 1: Theoretical Framework

CHAPTER 3
RESEARCH METHODOLGY
3.1 Population
Population refers to the total number of people that will represent the study (Mutua, 2014). A
well-known population will assist implement the approaches to exact society or group of
people. Population is the total or entire audience about whom the research or the study is being
carried out. The target population of this study are Professional in the field of procurement
dealing with the supply chain in Pakistan. The definite target population of this study are the
professional residing or working in Rawalpindi and Islamabad especially the ones working in
Allama Iqbal Open University, Main head office, H-8 Islamabad.

3.2 Sampling Size and Sampling Procedure

As there are limited resources so, it is always necessary to sample the respondents for any study
(Kothari, 2009). Studies suggest that choosing sample size is a very crucial thing and a crucial
stage because if we decide the sample size wrong, we would be wasting our resources and time.
It is a critical element of research process (Joo, 2004). The sample size used in the research is
115. It only consists of Professional in the field of procurement dealing with the supply chain
as the topic suggest the purpose of the research is to check the impact of buyer-supplier
relationships and information technology on supply chain performance. This will empower to
get the mandatory and essential illustration of statistics or information from a smaller group
from population.

In this study the focus is on the Professional in the field of procurement dealing with the supply
chain. Even though the professionals are entering more and more in the supply chain industry
and considered to be the most good or suitable profession. Data will be obtained from
Professional in the field of procurement dealing with the supply chain.

3.3 Data Collection Methods or Instruments

The current study is based on primary data and secondary data as well. Primary data is collected
through questionnaires and secondary data is used to know what previous studies say about the
topic. Studies suggest that using questionnaire to bring together data is economical, and it also
reduces researcher interference and more accurate and reliable data can be collected.
Discrimination can be removed as researcher’s interference will be minimal (Kothari, 2009).
Identity of the respondent is not disclosed because in questionnaire the format is such that it
does not require any name or contact number, so, respondent gives accurate information and
even on delicate issues (Petchey, 2010).
Questionnaires were used to collect data from the target sample that are Professional in the
field of procurement dealing with the supply chain in Rawalpindi and Islamabad. The
questionnaires enclosed the parts or aspects of Strategic buyer-supplier relationships and
information technology. It also covers the aspects of performance in supply chain and how it
affects the strategic buyer-supplier relationships. Secondary data is used in this study. It was
made sure to the respondents that the information provided by them will be confidential and
will only be used for analysis purposes.

Questionnaires were distributed to Professional in the field of procurement dealing with the
supply chain in Rawalpindi and Islamabad and questionnaires were made available online so
that the target audience can fill the questionnaires according to their own convenience,
suitability and ease.

The units of analysis in the research are Professional in the field of procurement dealing with
the supply chain in Rawalpindi and Islamabad. Instrument used for data analysis is 5 Likert
scale i.e. from strongly disagree to strongly agree. Likert scale was used in order to measure
the attitudes of respondents towards the respective questions.

3.4 Data Analysis Technique

Quantitative data analysis techniques is used in this study. According to researches it crucial
and there is a necessity to analytically arrange and evaluate the data obtained as a result of
distributing questionnaire, to bring the information in order and create meaning (Joo, An
exploratory framework of the determinants of financial satisfaction., 2004). The material and
statistics that is collected through questionnaires is hence interpreted to give the statistics a
meaning full shape. Quantitative data analysis technique is used because it will help gather
relevant data as the researcher already knows in what areas or aspects, he wants to collect
information.

Quantitative data analysis technique was useful for this study due to many reasons. Due to
quantitative techniques it will help to understand how much strategic buyer-supplier
relationships and information technology has an impact over performance in supply chain.
Qualitative data analysis technique was used to have a look at the work previously done in the
past and what are the past studies and theories are saying about the impact of strategic buyer-
supplier relationships and information technology on the performance of supply chain.
3.5 Moral Reflections
While conducting the study all the ethics were strictly followed. No basic human right was
violated such as confidentiality and privacy. Candidates were not forced to fill out the
questionnaire and if they are filling out questionnaire they were left alone, and they filled out
the questionnaire self-sufficiently.

3.6 Extent of Researcher Interference

The researcher’s interference will be slight, or you can say if the respondents have a query it
will be answered. Questionnaires will be distributed among the respondents as per their normal
work environment and there will be no time limit, they can have all the time they require.

3.7 Research strategy

The research that is carried out with respect to this study is applied, not new. In the past
researches and studies have been carried out to determine that how strategic buyer-supplier
relationships and information technology impacts the supply chain performance. As the study
deals with the professionals so it is carried out in the corporate sector. The studies are very less
in respect of Pakistan. The study took a form of new study, but it is based on the previous
studies.

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 Chapter 4

Analysis and Discussion

4.1 Reliability Analysis
Reliability analysis is done in order to measure the consistency of the instruments used according to researches
if the result of reliability test is 0.6 or more than that than the test is reliable and can be trusted. In the case of the
current study the result is 0.938 which is close to 1. Hence the constructs are effectively reliable.

Reliability Statistics
Cronbach's Alpha N of Items

.938 3

Figure 2: Reliability Analysis

4.3 Correlates of Strategic buyer-supplier relationships, information technology and

performance.
Another objective of this study was to check the relationship as well as significance among strategic buyer-
supplier relationships, information technology and performance.It also helps to find out whether the relationship
is positive or negative.
. In this context the results obtained from the survey is as follows

Correlations
SBSR IT P
Pearson Correlation 1 .830** .736**
SBSR Sig. (2-tailed) .000 .000
N 115 ** 115 115 **
Pearson Correlation .830 1 .935
IT Sig. (2-tailed) .000 .000
N 115 ** 115 ** 115
Pearson Correlation .736 .935 1
P Sig. (2-tailed) .000 .000
N 115 115 115
**. Correlation is significant at the 0.01 level (2-tailed).

Figure 8: Correlation Analysis

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By examining, investigating and evaluating the correlation it is concluded that there is very
significant relationship between all the three variables. The result indicates that Information
technology has an important relationship with Performance but the correlation between
strategic buyer-supplier relationships and Performance is negative. The results are highly
correlated as the value is between 0.736 to 0.935.

Model Summary
Model R R Square Adjusted R Std. Error of the
Square Estimate
1 .937a .879 .877 .283
a. Predictors: (Constant), SBSR, IT

Adjusted r square value show .877 , it means 87.7% variation comes from the independent
variable

Coefficientsa
Model Unstandardized Coefficients Standardized t Sig.
Coefficients
B Std. Error Beta
(Constant) .407 .137 2.971 .004
1 IT 1.055 .060 1.039 17.628 .000
SBSR -.128 .060 -.125 -2.129 .035
a. Dependent Variable: P

RELATIONSHIP IS POSITIVE WHEN P VALUR (SIG ) IS LESS THAN 0.05

WHEREAS T VALUE OF IT I.E 17.628 WHICH SHOWS POSITIVE RELATIONSHIP AND
P VALUE IS 0.00 WHICH SHOWS SIGNIFICANT RELATIONSHIP
BETA : ONE UNIT INCREASE IN IT WILL RESULTS IN P (SIG) 1.055
SBSR INCREASE ONE UNIT RESULTS IN -1.28 UNITS

ANOVAa
Model Sum of Squares df Mean Square F Sig.
Regression 65.184 2 32.592 405.737 .000b
1 Residual 8.997 112 .080
Total 74.181 114
a. Dependent Variable: P
b. Predictors: (Constant), SBSR, IT

F AND SIG VALUE SHOW POSITIVE AND SIGNIFICANT RELATIONSHIP

OVERALL FITNESS OF THE MODEL IS GOOD