Supply chain and management play a core role in fostering the fluidity of business operations. In particular, subsequent relationships developed between a supplier and a buyer create a unique platform to foster the commercialization of business transactions among persons involved within a given supply chain of services and commodities. In this respect, therefore, the success of suppliers and buyers increasingly relies on their abilities to create and sustain a productive logistical operation. Based on this particular context, thus far, buyer-supplier relationships are critical to creating a competitive advantage for either party. Therefore, a thriving relationship would seemingly work to the advantage of both aforementioned parties in this case. The creation and subsequent promotion of thriving or mutually beneficial relations between the two parties increasingly rely on the interplay of wide-ranging factors, the greatest of which entails cementing lasting relations rooted in trust. However, such a thriving relationship between suppliers and buyers may face unlikely odds if buyers fail to live up to the two most important elements that fortify and ensure fluid business relations (i.e., cooperation and trust). A rigorous analysis of several research perspectives finds the list of behaviors that can cause poor buyer-supplier relations include violation of trust, payment delays, imbalance of power, and a lack of loyalty.
>> Violation of trust as a cause of poor buyer-supplier relations
Suppliers can quickly lose interest in their buyers when buyers violate the trust of the partnership. A buyer-supplier relationship is critical to any business’s success. Oftentimes, buyers may choose to abuse the trust they have with key suppliers by purchasing commodities from other suppliers. Ultimately, this fosters the development of bad or negative relationships between key suppliers and their buyers. At the root of every effective buyer-supplier relationship lies an element of trust. Like every organization’s success, buyer-supplier relationship success similarly relies on fortified trust between the aforementioned parties (Eckerd et al., 2021). As such, the trust ensures the flow of commodities between suppliers and buyers (Eckerd et al., 2021). Suppliers are always ready and willing to maintain the fluidity of goods to their key buyers. With that said, trust is one of the elements that constantly ensure that suppliers and buyers maintain good and amicable business relations.
>> Imbalance of power between buyers and suppliers
Suppliers may likewise lose the appeal of dealing with certain buyers in cases where the buyer holds more power in the business relationship. A buyer may resultantly become less appealing to a supplier in scenarios wherein organizational buyers possess more power over their suppliers. Power balance plays a core role in determining the interdependency in any given buyer-supplier network. The element of power harbors an immense influence on wide-ranging factors in a supply chain network ranging from resource allocation, interdependencies, decision-making, and the set of activities carried out between buyers and suppliers. The balance of power also determines the relationship between entities in a supply chain (Brito & Miguel, 2017). A buyer organization may wield more power in cases where they are the primary sources of knowledge in a supply chain network (Brito & Miguel, 2017). In such scenarios, the party with more power (i.e., the buyer being a source of knowledge) will reluctantly cooperate with other parties in the supply chain. For instance, a buyer organization wielding more power than its suppliers can decide to buy the commodities of its suppliers at lower prices than set market prices. Eventually, this sets the stage for the manifestation of myriad conflicts between entities in a supply chain. Ideally, fluidity of operations in a supply chain rests solely on cooperation and trust among the supply chain entities. To that end, the aforementioned scenario characterized by power imbalances eventually destroys buyer-supplier partnerships that once thrived.
>> Payment Delays also cause poor buyer-supplier relations
Increased manifestation of payment delays can equally make buyer organizations less attractive to suppliers. The creation of fruitful partnerships in any business increasingly stems from cooperation, trust, and commitment among all the players. Buyers, suppliers, and every other entity in a supply chain must always aim to meet the needs of either player in order for everyone in the partnership to gain benefits from their collaboration. The element of cooperation and trust transcends almost every aspect of a business partnership and transactions between suppliers and buyers (Tanskanen & Aminoff, 2015). As such, suppliers will always require buyers to pay for their purchased products on time. However, depending on the terms of the contract between a buyer and a supplier, a buyer may also prefer to purchase products from a supplier on credit (i.e., deferred payments). In such instances, suppliers are bound to remain patient until such a time when the payment date for goods purchased on credit is due. In a sudden turn of events, buyers may occasionally fail to meet their obligations to the suppliers by defaulting one too many times to pay the supplier. It is always advisable and imperatively so for prospective buyers to inform suppliers in case of late payments to dispel any animosity between the players. Admittedly, such a scenario may force suppliers to renew their agreement terms with the buyer.
Abandoning and changing suppliers when a buyer organization suddenly becomes successful may also lead to poor buyer-supplier relations. In particular, nurturing success between buyers and suppliers requires the need for the players to build and maintain a long and fruitful working relationship (Eckerd et al., 2021). However, some buyer organizations occasionally breach their terms of agreement with key suppliers when they shift to buy from other suppliers without terminating the agreement they had entered into with previous suppliers. This translates to a violation of the trust and commitment between the two parties and may ultimately destroy business partnerships in the end.
Suffice to say, buyer-supplier relations are key to developing a successful supply chain network. The key to achieving and maintaining a key business partner in a supply chain thrives on trust, cooperation, mutual respect, and commitment, among other key business principles. The development of trust is essential in fostering cooperation among supply chain entities. Violation of terms of agreement by the buyer may resultantly lead to the destruction of enduring buyer-supplier relationships as discussed herein.
Brito, R. P., & Miguel, P. L. (2017). Power, governance, and value in collaboration: Differences between buyer and supplier perspectives. Journal of Supply Chain Management, 53(2), 61–87. https://doi.org/10.1111/jscm.12134
Eckerd, S., Handley, S., & Lumineau, F. (2021). Trust violations in buyer–supplier relationships: Spillovers and the contingent role of governance structures. Journal of Supply Chain Management. https://doi.org/10.1111/jscm.12270
Tanskanen, K., & Aminoff, A. (2015). Buyer and supplier attractiveness in a strategic relationship — a dyadic multiple-case study. Industrial Marketing Management, 50, 128–141. https://doi.org/10.1016/j.indmarman.2015.04.011