The Relationship Between Purchasing Strategies and Manufacturing Performance in Malaysia

The purpose of this study is to examine the significance of purchasing strategies and effective negotiation, collaborative relationship and interaction, effective cost management, and supply base management towards manufacturing performance.Applying the strategic-choice theory and the resource-based view of firms to the purchasing strategies, in this study a research model is developed to demonstrate the premise that implementing proper purchasing practices to support and execute the manufacturing industry will enhance the performance.The study utilizes survey data from respondents in the purchasing functions of manufacturing firms in Malaysia.The results are based on regression analysis and execution modeling by using SPSS software.The study finds that purchasing strategies, namely, effective negotiation and effective cost management have a positive relationship with manufacturing performance.Manufacturing firms should focus on purchasing strategies, effective negotiation, supplier collaborative relationship and interaction; effective cost management, and supply base management as navigators for their excellent performance in the current volatile market conditions.The paper theoretically develops logic for and empirically shows that all of the purchasing strategies are appropriate practices for mediating the impact on manufacturing performance.Considered at a higher-level abstraction, these relationships indicate a contribution to the theory that explains how purchasing strategy can result in manufacturing performance, through the concurrent deployment of appropriately matched purchasing practices.