Introduction
Therefore, we will censor and review the purchasing strategy of the purchasing firm among the manufacturing industry in Malaysia, especially after the total containment period due to increasing cases of Covid-19 since June 1, 2021 by doing a brief description on the background. of study for this research.
Background of the study
We will investigate supplier selection factors that will affect supplier and firm performance among Malaysian manufacturing industries by conducting a data collection questionnaire. While there was wide use of the introduced supplier selection criteria, the same was not valid for supplier selection.
Overview the Manufacturing PMI Malaysia
5 Another statement from the source of an online article on The Edge Markets (2021) points out that Chris Williamson, chief economist of the HIS Market, agrees that the June statement on Malaysian manufacturers reported an updated downturn due to an increase in the number of cases of Covid-19 and each of the Standard Operation Standard (SOP) reintroduced by the Government of Malaysia during the National Recovery Plan Malaysia tends to reduce demand, hinder production and disrupt supply. disrupt the chain. As a result, based on the chart result of the Manufacturing PMI Malaysia, it can be indicated that the index is impacted and declining compared to the previous quarterly index due to the increase in cases of Covid-19 and the announcement of the Standard Operation Process (SOP) of the Government of Malaysia under the National Recovery Plan.
Problem Statement
6 First, price and costing is one of the criteria we are concerned with in this study. Second, delivery performance is also one of the criteria that we need to investigate whether there is any relationship to affect supplier and firm performance among the manufacturing industry in Malaysia.
Research Objective
For the buyer-seller relationship there are some previous researchers such as Vijay R.Kanan (2006) who have acknowledged that there is little evidence regarding how the buyer-seller relationship as supplier selection criteria and how the buyer-seller relationship affects more a lot. broad measure of the acquiring firm's performance. In this study, we will focus only on the five supplier selection criteria (cost and price; . quality; delivery performance; buyer-seller relationship and supplier reputation) as independent variables and determine whether these selection criteria of suppliers have a significant relationship between the impact of firm performance and suppliers in the Malaysian manufacturing industry.
Significance of study
We need to develop five of the supplier selection criteria as independent variable through literature review of these previous researchers' studies, and we need to construct these indicators from the independent variables accordingly as the measurement of the dependent variable in this study. Therefore, primary data is important information that we need to get through the result of the questionnaire which is distributed to the participants so that we are able to analyze the result from the respondent and can achieve the purpose why we choose this topic as our research studies. .
Conclusion
A productive supplier selection process should be established which is fundamental to successful supply chain management. The essential of this study is to analyze what are the factors that production purchasing companies in Malaysia prioritize during the supplier selection process to select the appropriate suppliers who are always able to support their production line.
Literature Review
Supply Chain Management (SCM)
Some authors have also suggested that supply chain management as the chain that interacts with each part of the production and supply process from the raw material to the final product, with a wide scope, few organizational boundaries. According to this broad definition, supply chain management includes the entire value chain and the established inventories and supply management from raw material acquisition to its use.
Supplier Selection Process
Based on the result from (Monge, 2003) prove that it is possible to clarify that the supplier selection process is the most important aspect that affects supplier management. Additionally, some studies determine that quality was the most important factor based on a review of 74 articles discussing supplier selection criteria, followed by quality and shipping price (Weber, 1991).
Dependent Variable: Supplier and Firm Performances
Establishment of evaluation criteria and indicators for supplier selection
Increase the company's gross profit margin by reducing cost of goods sold. Reduce the defect rate of the defective or damaged goods and material that does not meet the requirement of the purchasing company.
Criteria of supplier selection
- Pricing and Costing
- Delivery Performance
- Quality of products and services
- Buyer-sellers’ relationship
- Suppliers’ Reputation
Consequently, a number of authors conclude that supplier selection is the most important activity embraced by the purchasing department (Ghodsypour & O'Brien 2001). There are a number of previous researchers who have discussed what the term buyer-seller relationship suggests.
Methodology
- Introduction
- Research design
- Data Collection Method
- Target Population
- Sampling Frame and Sampling Location
- Sampling Techniques
- Sample Size
- Data Collection Method
- Primary Data
- Secondary Data
- Research Instrument
- Objective of Questionnaire
- Questionnaire Design
- Pre-Test and Pilot test
- Construct Measurement
- Origin of Construct
- Data Processing
- Questionnaire Checking
- Prevent missing value
- Data Editing
- Data Coding
- Data Transcribing
- Data Cleaning
- Data Analysis
- Descriptive Analysis
- Scale Measurement
- Reliability Test
- Inference Analysis
- Normality Test
- Multiple Linear Regression
- Hypothesis developments
- Conceptual Framework
- Conclusion
There are some concerns about the accuracy of the survey data applied to the data file. The purpose of data cleaning is to ensure that there are no missing responses when transferring the data to the data analysis software. In addition, this research also examines how data is being processed after collection from our survey participants.
Data Analysis
Introduction
Descriptive Analysis (Personal Information & General Profile of Company)
Another chat showed the number of years the respondent's company has been in operation. Finally, only 13 units (14.1%) of our respondents have been working with their top 5 suppliers for between 11 and 15 years. The graph 10 showed that the average length of years that the respondents work with their top 5 supplier.
Missing Data
Outlier
It consists of investigations that occur under the conventional range of values for each of the variables. Each of the ways to test for outliers is based on the different number of variables constructed in the study. Cook's distance case was applied to find multivariate outliers and prove their impact on the study objective.
Normality, Linearity and Homoscedasticity
- Normality (Kolmogorov-Smirnov)
- Linearity (Pearson’s Correlations)
- Homoscedasticity
- Multicollinearity
Therefore, the result reveals that price and cost have the strongest correlation with supplier and firm performance, while product and service quality have the weakest correlation with supplier and firm performance. In conclusion, there is an assumption of homoscedasticity based on these three results of graphical data analyzes given in the diagrams below. In summary, we can get that all VIF values from our independent variable (price and cost; delivery performance; product quality; buyer-seller relationship and supplier reputation) are all lower than 10, and their tolerance value is greater than 0.2, can conclude that our data collection satisfies the assumption of multiple collinearity.
Factor analysis
- Exploratory Factor Analysis
- Eigenvalues
- Screen Plot
- Kaiser-Meyer-Olkin
- Factor Loading Based on Rotated Component Matrix
The explanation of this study is to play out this investigation and further inspect and understand the element stacking of the thing factors. Eigenvalues are connected with a change that illustrates the considerable significance of the figure an important part extraction procedure. As a feature of a primer run with headpart extraction, quick calculations about the quantity of variables are received from the size of the eigenvalues announced (Tabachnick, 2007).
Reliability Test- Cronbach’s Alpha
- Variable: Price and Cost
- Variable: Delivery Performance
- Variable: Quality of products
- Variable: Buyer-Sellers’ Relationship
- Variable: Suppliers’ Reputation
- Variable: Supplier and Firm Performance
We can get the value of the Cronbach's Alpha between 0.657 and 0.766, generally it is good reliability. As we can see, supplier reputation with a value of 0.766 is the highest variable in this study. The buyer-seller relationship ranks fourth with an alpha value of 0.717, and supplier and company performance ranks fifth with an alpha value of 0.701.
Multiple Regression Analysis
Therefore, it can prove that all five independent variables have a significant impact on supplier and company performance. Supplier and firm performance will increase by 0.244 units for each unit increase in supply performance, holding other independent variables constant. In addition, holding price and cost, delivery efficiency, buyer-seller relationship, and suppliers' supplier reputation and company performance will increase by 0.027 for the increase in product and service quality per unit.
Analysis Hypothesis
H4: There is no significant relationship between the buyer-seller relationship that affects the supplier and the company's performance. It is widely perceived that the buyer-seller relationship does not have any significant characteristics that will have a negative impact on the supplier and company performance among the manufacturing industry in Malaysia. We can get the significant value of 0.773 and t-value of 0.029, the statistical result indicated that this factor is negatively related in supplier selection among manufacturing industry in Malaysia.
Summary, Findings and Recommendation
Introduction
Contribute to Theoretical Implications
However, there are some local researchers such as Suzari (2013) who have done the study of empirical tests and explored the theoretical framework of business ethics and government policy related to the topic of supplier selection. However, a complete reflection that can consider the detailing of supplier selection and influencing components through manufacturing industry ideation in Malaysia has only been done by a few researchers. Firstly, the research has provided new knowledge about supplier selection because it was conducted in the manufacturing industry in Malaysia.
Discuss of Major Findings
H2: Supply performance has a positive relationship to affect supplier and firm performance among the manufacturing industry in Malaysia. The result shows that there is a positive relationship between the delivery performance, which affects the supplier and the company's performance. The result shows that there is a positive relationship between the suppliers' reputation, which affects the supplier and the company's performance.
Managerial Implication
In addition, the purchasing manager can develop several similar industrial suppliers to have price comparison, credit term, quality control to improve supplier and company performance. Second, the research findings can provide a reference for managers coming from other industries regarding the factors that are evaluated in supplier selection and affect the company and performance in their company. Supplier evaluation establishes and maintains control over the purchasing process to determine the level of control applied to suppliers, establish supplier selection criteria, and evaluate suppliers to ensure they meet company requirements.
Limitation of the study
- Time constrains of data collection
- Low respond rate from targeted population
- Questionnaire development
Our goal is to collect 100 units of response from our participants in this 4 month period. The purpose of this study is to investigate the critical supplier selection criteria affect supplier and firm performance among the manufacturing industry in Malaysia. However, the challenges that will be encountered in this survey are the low response rate from our target group, as we have precisely identified our target group.
Recommendation
- Develop of open-ended question into the questionnaire
- Improve the respondent rate through social media
In addition, it is possible that some respondents think that there are some questionnaires that they do not fully understand to answer. 74 some of the social media such as LinkedIn to spread the questionnaire through the background, introduce the purpose of the thesis by connecting the intended respondents. Therefore, our respondents better understand the purpose of the questionnaire and are more confident to answer the questionnaire.
Conclusion
Deployment of ANP and AHP for supplier selection in the construction and civil engineering companies; Case study of an Iranian company. A supplier selection decision support system using an integrated analytical hierarchical process and linear programming. Applying the triple bottom line in sustainable supplier selection: a meta-review of the state-of-the-art.
Appendix
Instruction: Please read each question carefully and provide the correct information by placing a tick (√) in the boxes provided. I agree that supplier must adhere to their price schedule and payment term as part of the agreed contract. The products/machinery/services offered by the supplier meet the technical specifications and requirements of my company.
