User‐Vendor Relationships in the Scottish Electronics Industry

Abstract

User‐vendor relationships are examined in a sector of the electronics industry where the manufacturing process is sensitive to the performance of vendors in terms of price, quality and delivery. Two similar user companies with different vendor management approaches are considered and the effects these have on vendor performance and the subsequent results for aspects of the companies' performance examined. Vendors supplying both companies were interviewed on the rationale of their behaviour towards the companies. It is shown how, for this type of manufacturing process, forgoing short‐term price opportunities by developing long‐term relationships with vendors can lead to greater overall benefits for the manufacturing process.