Investigating the quality of the relationship, supply risk mitigation on medium and large-sized manufacturing firms' supply chain performance in the developing countries: the moderating effect of supplier involvement

Abstract

PurposeDue to the current volatile environment and fierce competition, manufacturing firms (MFs) must improve their performance to survive. In this regard, checking and monitoring the suppliers' risk should significantly improve the performance of MFs. In addition, a relation based on not being an opportunist, confidence and reliance are influential factors in reducing the supplier defaults on his/her supply obligations and improving supply chain performance (SCP). Besides, the moderator function of supplier involvement (SI) in the relationship between quality of the relationship (QoR) and supply risk mitigation (SRM) is undeniable.Design/methodology/approachBased on the survey of 148 samples from small to large-sized MFs in Jordan, Turkey and Egypt, empirical evidence has been conducted to support a majority of the authors’ hypotheses. This paper provides a theoretical review of buyer–supplier relationships and supply risk. Hypotheses were tested by using structural equation modeling (SEM)/Smart PLS-4.FindingsAccording to the results, confidence and reliance have statistically significant and positive impacts on SRM, resulting in better SCP. Moreover, the findings show that SI positively affects and moderates the relationship between confidence (C) and SRM, while it has no statistically significant influence on the relationship between reliance (R) and SRM.Practical implicationsThis study provides necessary material for managers and decision-makers in MFs to confirm the importance and understanding of the QoR in building relationships and business dealings with partners in the SC, in addition to limiting and mitigating the risks of an interruption in supply in particular. Therefore, building a high-quality relationship as a practice based on trust and reliability with suppliers positively affects the performance of the SCs of MFs.Originality/valueThis research paper offers empirical evidence for using QoR within SRM resources of MFs' context for enhancing their supply chain performance. This study is one of few studies that examine the QoR and SRM that contribute to enhancing SCP in MFs in developing countries, which also can serve as a reference for many SC managers and practitioners.