The effects of strategic planning, purchasing strategy and strategic partnership on operational performance

Abstract

The global competition in the manufacturing industry has obliged the companies to adopt an efficient and effective business process and adaptability of the company's competitive strategy following the external uncertainty conditions. The competitive strategy should enhance the competitiveness of the company, which is formulated during the strategic planning process. This paper investigates the impact of strategic planning, purchasing strategy, strategic partnership, on operational performance. The research has surveyed, using a questionnaire with a five-point Likert scale, 135 manufacturing companies domiciled in the region of East Java, Indonesia. Data analysis used the PLS technique. The objective of the analysis is to assess the measurement model for validity and reliability. Besides, the analysis also examines six hypotheses developed. The result reveals that all six hypotheses were empirically supported. The manufacturing company's strategic planning influences the purchasing strategy and strategic partnership. The result also shows that purchasing strategy through periodic evaluation of supplier capability, influences the strategic partnership in terms of involvement of suppliers in the business process of the company. Overall, strategic planning, purchasing strategy, and strategic partnership affect operational performance. It was also found that purchasing strategy and strategic partnerships mediate the influence of strategic planning on the performance. The results presented here may facilitate improvements in operational performance in the context of supply chain management. This paper also contributes to the ongoing research in the supply chain management theory.