Supplier Relationship, On-Time Delivery And Criteria For Selection: The Case Of Asiatic Builders

Learning Outcomes and Assessments

Supplier relationship is one of the most critical factors in modern day business. It defines how a corporation develops and has a working relationship with its suppliers. This research is focused on Supplier Relationship for Asiatic Builders Sdn Bhd. Asiatic Builders is a famous construction company which specializes in construction projects in the region of Malaysia. The focus point for the company is high rise buildings and company also has active presence in housing segment.

This study focused on Asiatic Builders being focused because Asiatic are having a difficult time finding qualified or skilled workers and unreliable subcontractors and suppliers are causing major defect of the end-products and delaying projects. Moreover, Asiatic is getting more complaints from clients concerning the quality of products and expectation from clients is demanding. Hence the study will explore the relationship with suppliers to help prevent schedule and cost overruns and delays in handing over to clients.

As per the Malaysia Vision for the year 2020, the country needs to transform into a dynamic, resilient and competitive country. As per the vision it is expected that construction sector will play a very important role in this process as it will help in improving the living standards which is fundamental to the development of the country. Other than this direct growth, it will also create employment opportunities which in turn will boost the economy. Hence it can be concluded that construction sector will boost the economic growth of the country.

Anyway it is essential to comprehend that with this extraordinary development, quality will wind up huge to people in general with the quick development of the nation. Anyway generally it has been seen that poor execution is regularly remarked on development ventures worried in building and quality imperfections, time delays, ecological effect issues and spending plan surpassed. Albeit the vast majority of the development organizations are confirmed with ISO 9001 Quality Management System there is still absence of standard and low execution in the development procedure, and this can bring about inability to satisfy end-client prerequisites (Nurul and Faridah, 2014). The development segment in Malaysia is exceptionally dependent on subcontractors and providers. Cooperation amongst subcontractors and providers may create collaboration and get ceaseless duty. Daniel et al (2012) demonstrated that production network which included of value, conveyance, cost, responsiveness and consumer loyalty have a critical connection with key acquiring, long haul relationship, calculated union. In a store network the improvement of connections amongst purchaser and provider is some place the spine to the accomplishment of an association (Harland, 1996 refered to in Eamonn et al., 2010). Subsequently in the buying procedure, choice of providers and to reinforce great associations with providers is basic. Every provider has distinctive criteria and specialisms. This makes the assignment of choosing and assessing providers convoluted (Jongkyung, 2010). Provider choice criteria are prominently basic where quality, cost and execution are set up (Lehmann and O’Shaughnessy, 1974, 1982; Evans, 1982; Wilson, 1994 refered to in Kannan et al., 2002). Association with providers is fundamentally vital, particularly in the worldwide market, and for the linkage amongst providers and purchasers to encourage data and great/administrations stream of inbound and outbound and inward process stream (Chang et al., 2007). Obtaining assume an essential part, with duty regarding the determination, assessment and advancement of capacity of providers, particularly where long haul community oriented associations with providers is to be set up (Kenneth and Brian, 2012). Thus different criteria should be thought about while choosing providers (Ng, 2008).

Supplier Relationship in Construction Industry

In this examination, the accompanying three regions will be researched 1) association with providers and its effect on-time conveyance, 2) criteria for provider choice and assessment, and 3) advantage of cooperative association with providers.

The objective of this research is to break down the current provider choice in Asiatic Builders, examine on-time conveyance when association with providers are entrenched and to improve community oriented association with providers to make long haul benefits.

It is normal that synergistic associations with working accomplices/providers will unquestionably accomplish quality workmanships to fulfilling end-clients and to advance the notoriety of the organization. Connection amongst providers and temporary workers begin from the earliest starting point to process lastly the final results to end-clients. Community with accomplices have been appeared to expand execution and aggressiveness it additionally enhanced hazard administration, enhanced time, cost diminishment, refined assets while conveying a broad scope of focal points and upgrade business esteem and upheaval. Accomplishment in inventory network is tremendously depending on choice of good and appropriate providers. Looking for generally advantageous and most minimal costs is not any more “productive sourcing”. This case study addresses the below research questions.

1) Does on-time delivery improve when the relationship between supplier and contractor are well established?

2) How do Asiatic Builders determine the criteria for supplier selection and evaluation?

3) How do collaborative relationships with supplier benefit Asiatic Builders?

In the literature review relevant theories and previous research will be critically presented. This will be followed by a description of the methodology used, including a discussion and justification for such methods in relation to the research aims and objectives. This will be followed with a presentation of the research findings and analysis and interpretation of the data. Then the conclusions and recommendations from the study will be presented.

Literature Review

Right Supplier and Relationship

The above examined parts of provider administration indicate two noteworthy parts of inventory network administration, particularly pick the correct provider (who) and setting up the correct relationship (how) (Daniel et al., 2012). (Who) for this situation point is spoken to provider determination and assessment and the (how) speak to long haul association with providers. Purchasers need to persistently watch their provider activity and give criticism to change with a specific end goal to merge the connections (La Londe and Cooper, 1989; Talluri and Sarkis 2002 refered to in Daniel et al., 2012). The following part will expound on the associations with the provider, criteria for provider determination and advantage of shared association with providers.

Analysis of Asiatic Builders Sdn Bhd’s Supplier Relationship

Provider on time conveyance achievement is vital to empowering the purchaser’s satisfy or meet client’s necessity and duties. On-time conveyance process incorporates: purchaser inputs, provider inputs, purchaser provider connections and estimations. Criteria need to decide and constantly measure on provider execution to create adequacy of on-time conveyance. Provider relationship combination upgrades organization’s connection with their providers (Hong, Park, Jang and Rho, 2005 refered to in Pejvak et al., 2016). It is likewise a business procedure by which all associations are overseen amongst organizations and its providers (Kroenke, 2012 refered to in Tseng, 2014). As per Moeller et al., 2006 (refered to in Pejvak et al., 2016) provider relationship is a procedure of performing exercises containing build up, upgrade and advance great associations with providers to make esteem. Steady on time conveyance of products will just happen when provider relationship is sufficiently solid. Provider Relationships is combination between two gatherings, where the union expands the edge for the provider and conveying huge incentive for cash to a client. It’s shared advantage, upper hands to the two gatherings and makes noteworthy esteem chain. Adaptability of conveyance is ability to change conveyance dates and help a minutes ago or uncommon requests (Beamon, 1999; Slack, 2005 refered to in Kuo and Hse, 2012). Ketokivi (2006) refered to in Kuo and Hse (2012) communicated that adaptability of conveyance is arrange victor over cost. As indicated by (Anderson, 1995; Walter, Ritter and Gemunden, 2001 refered to in Kuo and Hse, 2012) the critical intention in purchaser and provider relationship is to create an incentive for clients. Construction industries, include deliveries of both solid products and intangible services. In this industry, project contractors take the responsibility to coordinate a network of suppliers and subcontractors while serving their clients requirements. Material needed to be planned and controlled to ensure the right materials of quality and quantity are delivered at the right time, procured at the acceptable cost and the right time to use. According to (Ahuja et al., 1994; Bell and Stukhart, 1986 cited in Maged and Sameh 2008) 40 to 60 percent budget of the project consists of construction materials. Therefore, it is important that project contractors to managed and control properly the construction materials to avoid unnecessary costs.

Purchasers need to established long term and strong relationships with suppliers to help cost reduction and share savings (Kenneth and Brian, 2012). Maintain good relationships with suppliers helps on reducing the lead time, increase assurance of delivery, adjustment of price when required, changes of order, high level of quality and changeable of materials when necessary (Kenneth and Brian, 2005).

On-Time Delivery in Construction Industry

In a relational contract “Trust” has been pictured as an important perception in an understanding prospect of planning and cooperation (Dwyer et al., 1987 cited in Zhizhong et al., 2011). A massive level of trust can increase the confidence and reduce the awareness of risk in a relationship (Ganesan, 1994 cited in Zhizhong et al., 2011). Both parties able to share undisclosed data and assist each other with growth when each other have a mutual trust (Doney and Cannon, 1997 cited in Zhizhong et al., 2011). Trust in supplier and buyer relationships is highly important as supplier able to respond to buyer progress demand and deliver rapidly (Kuo and Hse, 2012).

According to (Sakun and Chee, 2011), who had conducted a study on automotive industry in Thailand,, a positive and notable relationship between internal consolidation and customer delivery accomplishment will lead to enhanced delivery performance. Moreover, it is necessary to share information and cooperation between division to enhance on delivery performance (Sabath, 1995; Birou et al., 1998; Fawcett et al., 1997; Dro¨ge et al., 2004; Iyer et al., 2004; Germain and Iyer, 2006; Flynn et al.,2010 cited in Sakun and Chee, 2011). Furthermore, (Li et al., 2003 cited in Sakun and Chee, 2011) pointed out that direct supplier development has proven to improve in purchasing execution in terms of quality accomplishment and on-time delivery. Also, Narasimhan and Carter, 1998 (cited in Sakun and Chee, 2011) stated that long-term relationship with suppliers can have a good impact on delivery ability.

Supplier Selection (SS) and provider assessment (SE) are enter components in buying capacity, it is on account of provider execution can straightforwardly influence the task and financing of the organizations (Bilisik et al., 2012 referred to in Ravi and Manojkumar, 2017). These days, provider is frequently incorporated into outline and advancement of the item with the goal that they can be successful accomplice to esteem chain, beneficial. This likewise helps in quicker rate of advancement and improvement of product offering.

Determination of providers is a noteworthy assignment to exude maintainable production network. Administration needs to recognize the best and appropriate providers to help them in accomplishing corporate systems. Hutchins (2002); Wagner (2001) referred to in Roger (2006) expressed that it is basic to develop good adjusted provider connections from community oriented partnership to antagonistic connections. Each provider has diverse criteria which offer advantages, for example, cost decrease, lead time, client satisfaction and so forth. For instance, delay in conveyance can influence the undertaking site along these lines increment the venture cost and postponing in giving over to the customer. Along these lines, providers must be assessed in light of different criteria.

Criteria for Supplier Selection in Construction Industry

Supplier Selection (SS) involved numerous decision-making tasks, which supplier is evaluated based on assorted criteria (Mohanty et al., 2014 cited in Ravi and Manojkumar, 2017). Purchasing manager etiquette is significant important in selecting of suppliers. Simultaneously, the most high-ranking criteria being identified are quality, cost and delivery performance (Dempsey, 1978; Dickson, 1966 cited in D.J.Watt et al., 2010).

The traditional method of selection of suppliers is based on the lowest cost criterion which is not sturdy enough in supply chain management (Georgios et al., 2010). According to Ho et al., 2009 (cited in Georgios et al., 2010) selection of suppliers based on the traditional cost-based method cannot be assured that is world-wide favorable because criteria such as delivery, flexibility, quality and etc. were not accounted. A survey conducted by Dickson, 1996 (cited in Georgios et al., 2010) evaluated 273 purchasing managers, and discovered 23 criteria for supplier selection. The result showed that quality is the most essential criteria followed by performance history and delivery (Talluri and Narasimhan, 2003; Chaudhry et al., 1993 cited in Georgios et al., 2010). In a conventional approach, selection of supplier was based on the supplier invoice cost, but neglected the important sources of indirect cost such as poor quality of materials, delayed delivery, production breaks and so on. Timmerman (1986) cited in Georgios et al., (2010) recommended a simple categorical method to summarise a few performance measurement into one score. The ranking is classified as good, satisfactory, neutral and unsatisfactory.

Georgios et al., (2010) conducted a study on supplier selection, the result of the proposal are standardizing the valuation of suppliers and identifying the foremost for the job. Each supplier is evaluated based on the designated criteria and points are ranging from 1 to 10 for each individual criterion. These points will input into the model, where criteria are the variables and the highest overall score are the successful supplier.  Supplier selection approach is illustrated below.

To establish the model, a rating of weight and criteria identification was inputted into the model. A qquestionnaire Survey was conducted among project managers from the construction sector, and 48 responses collected. Results show that the most significance criteria for supplier selection as listed below in descending order (Georgios et al., 2010).

1. Technically acceptable product
2. Overall cost
3. Discount
4. Assurance of delivery
5. Payment terms
6. Sum of cost to the final desired place
7. Shipping cost
8. Agreed terms and conditions
9. Notable charges
10. Hike of price
11. Product dimensions
12. Quotation expiration date

Supplier performance needs to be evaluated with the increasing needs and requirements of the organization’s business chain. The purchaser should ascertain whether the supplier can promote continuity of supply and provide long-term necessity with the organization. It is essential that suppliers need to be evaluated during and following approval by the organization. There are various approach and techniques of supplier evaluation.

Benefits of Collaborative Relationships in Construction Industry

Over the last two decades, a number of researchers have been investigated and studied supplier evaluation and selection (E.Ertugrul Karsak and Melih Ece, 2012). Based on, data envelopment analysis (DEA) E.Ertugrul Karsak and Melih Ece, (2012) shows the most influence technique being used. DEA was developed by Charnes et al., 1978 (cited in E.Ertugrul Karsak and Melih Ece, 2012) which was known as a mathematical programming method, to regulate the best efficiency weight for selection making units with the level of outputs given and inputs they produce. DEA method has also be used by Ross et al., 2012 (cited in E.Ertugrul Karsak and Melih Ece, 2012) to evaluate both supplier and buyer performance characteristic.

Performance of supplier can also be evaluated via KPI (Key Performance Indicator), supplier scorecards, compliance specification and certification level. Yearly evaluation of suppliers needed to continuously monitor supplier performance and relationship with suppliers.

Martin et al., (2015) had conducted an interview where the interviewee was requested to listed out fifteen criteria in 20 medium to large construction sectors and electronic manufacturing in UK and Germany. The result appears that finance/price/cost, supplier performance, and risk are the most significant of evaluation criteria. Price is still the most significant criterion. While supplier performance is the second most significant criterion and risk is categorized as third. Construction field is greatly dependent on the performance of suppliers (Martin et al., 2015). This study revealed the following hypothesis that Finance/price/cost are the most essential criterion in supplier evaluation for both construction sectors and electronic manufacturing in UK and Germany. Finance/price/cost is a component of the contract, “We must to have it” (Martin et al., 2015).

Collaborative relationships with supplier

Increasingly, organizations are looking to establish collaborative relationships with their partners in a supply chain to attained competitive benefit, efficiencies, and flexibility (Gilbert et al., 2010). Previously, procurement was viewed as a clerical role, where buyers and suppliers relationships were considered as adversarial. But today, many firms are shifting towards a more collaborative approach (Humphreys et al., 2001). According to (Corsten and Kumar, 2005 cited in Gilbert et al., 2010) collaborative relationships acquire long-term process where linkage efforts between partners to an established unique value where partner can’t develop alone. Gadde and Hakansson (1994) cited in P.K.Humphreys et al., (2001) discovered that there 3 key strategic purchasing matter: customer-supplier relationships make or buy selection and supply base structure. An organization needs to move closer toward collaboration in the buyer-supplier relationship (They and Briggs, 1994 cited in Humphreys et al., 2001). There is increased demand for product complication, a broad range of technologies and excessive level of reliability and quality but lower in cost (.Humphreys et al., 2001).

To success in partnering, trust and confidence are the most prominent condition, however, information/communication sharing seems to be more important (Doloi, 2009; Titus and Brochner, 2005 cited in Jeroen et al., 2012).    Mei Cao and Qingyu Zhang (2011) quoted that miscommunication will cause misunderstanding and dispute between partners, which causes the collaboration failures.

     The advantages of collaborative relationships can have a greater gain which own firms cannot generate alone. The significance of collaboration can promote better decision making, increase revenue through resources, increased capacity, and variability, innovation by combining of ideas and view and etc.(Mei Cao and Qingyu Zhang, 2011).

According to (Lee and Whang, 2001 cited in Mei Cao and Qingyu Zhang, 2011) in a study with Accenture and Stanford University on 100 retailers and 100 manufacturers in food and consumer product industry. The study reported that joint collaboration relationships generate greater profits and wider level of information sharing which lead to better organizational performance. However, collaborating with supply chain partners may also cause compromise, inflexibility and additional costs of coordination (Das et al., 2006 cited in Mei Cao and Qingyu Zhang, 2011).

As stated by Sriram et al., (2015) who had been reviewed the pass exploration; they suggested that collaborative engagements are specified by attributes as followed. Firstly, collaboration comprised of information exchange concerning planning and activities of the main activities to be implemented Holcomb and Hitt, 2007 (cited in Sriram et al., 2015). Secondly, both partners in the supply chain need to work closely to establish common goals (Artz and Brush, 2000; Hartley et al., 1997 cited in Sriram et al., 2015). Thirdly, active involvement of top management in collaborative relationships (Hoegl and Wagner, 2005 cited in Sriram et al., 2015). Lee and Kim (1999) cited in Sriram et al., (2015), defined that involvement of top management will help overcome obstacles and assured resource commitments. This statement is compatible with prior studies (Sriram et al., 2015). Moreover (Ellram and Hendrick, 1995 cited in Sriram et al., 2015) determined that ongoing alliance between 2 organizations comprising an engagement over a long period and sharing of risk and information beneficial the relationship.

Bowersox (1990) cited in Prakash and Damien (2009) found out that expanding relationships with supply chain partners turns a vital starting point of strategic benefit when working with a supplier to search end users. Hence, establishing relationships with customers not just integrate with users of products, also providing mediator approach to consumers which turn out to be an essential challenge (Prakash and Damien, 2009).

Prakash and Damien (2009) also discovered that to develop a stable long-term of relationships with suppliers, steps are required to take into practice. 1) suppliers to involve into processes to enhance values, 2) suppliers will preserve the high quality of services and products (Verma and Pullman, 1998 cited in Prakash and Damien, 2009), 3) communication system needed to ensure openness in exhanged of information between organization and suppliers, meaning that organizations could provide information to suppliers to enhance their quality and awareness (Garcia-Dastugue and Lambert, 2003 cited in Prakash and Damien, 2009), 4) getting suppliers into development of new materials to to ensure relationship persist trustworthily, 5) collaboration of planning and problem solving shows positively trust and performance with organizations (Claro et al., 2003 cited in Prakash and Damien, 2009). Based on the few forms as mentioned above, the following hypothesis supported “There are positive effects of organization performance when a strong supplier is involved” (Prakash and Damien, 2009, pp.23).

Elena and Desiree (2015) stated hat knowledge integration between buyer and supplier shows operational efficiency. Both parties may able to forecast production, shipments and delivery schedule (Greis and Kasarda, 1997; Cachon and Fisher 2000 cited in Elena and Desiree, 2015). For example, Toyota manufacturing shares working experience with suppliers in an attempt to resolve problems together. Supplier professional knowledge concerning components and parts of products allowed them to participate early in the design stage. Customers are encouraged to visit the supplier premises to build more understanding between suppliers and buyers (McQuarrie, 1993 cited in Elena and Desiree, 2015)

A case study approach will be used in this research project. Schramm (1971) cited in Yin (2003) stated what the important of case study is, it explained a decision, why it was obtained, how to implement and the final result collected. Case studies are normally applied in exploratory and explanatory research.

While qualitative and quantitative method refers to data analysis procedures and data collection techniques. Or can be defined as one is focusing on numeric – numbers and non-numeric – words (data).

Lewis, Thornhill, and Saunders (2007) cited in Pejvak et al., (2016) expressed that a qualitative method prioritizes on quality and precise data can be collected through in-depth interviews. Gillham (2000), Kolb (2008); Merriam (2015) cited in Pejvak et al., (2016) quoted that qualitative study is nature, which revealed the individual experiences and pieces of knowledge in solid certainty instead of the finale drawing. The qualitative approach enables the researcher to attain more understanding of hidden opinions and reasons. Besides, journals and books regarding supplier relationships were reviewed and data is collected and utilized as a secondary data.

A qualitative method will be applied in this study, moreover, focused interview and questionnaire data collection method will be employed. Casey and Houghton (2010) cited Houghton et al., (2013) Multiple data collection sources delivered additional ‘accuracy and convincing’ case study. Since we will be conducting research based on qualitative aspects and hence this method of research fits our set of desired objectives and outcomes.

The aims of this study are to identify the current suppliers of Asiatic Builders. Again, the reason why this research is just focusing on Asiatic Builders is that of Asiatic is having a hard time in finding the right suppliers which is leading to delay in projects and cost overruns. Currently, Asiatic Builders are utilizing traditional procurement which is known as arm’s length relation.

This case study involved 15 participants and data were collected throughout the year 2018 (Data collection period May 2018 to June 2018). Suppliers, manufacturer, site supervisors, and purchaser have involved in this case study. The participants included site supervisor, project manager, production manager, sales manager and purchaser because they are the most relevant informant and responsible for the supply chain flow.

This people involved shall provide more judgement on the relevant process.  Four companies involved are Monier Roofing (manufacturer), Porcelain Ace Marketing (supplier), and Asiatic Builders (contractor) which all specialize in the construction sector. Monier is a roofing tiles manufacturer in Malaysia which supplies roofing tiles all over in Malaysia. Porcelain Ace specializes in facilitating transactions of supplying materials between manufacturer and contractor. Asiatic Builders is a constructor for construction works. As stated above in total there are 15 participants of which 8-10 are from middle management layer and rest are domain experts of various domain which exist in this business.

There are various data collection techniques such as observation, interviews, questionnaires, document analysis and etc. In a case study, triangulate of multiple data origins is needed (Saunders et al., 2009). The meaning of triangulation refers to the use of different sources of data collection in one study. For example, quantitative data collected in the questionnaire can be used in qualitative data using semi-structured interview (Saunders et al., 2009). Collecting of data though interview refer to primary data collection where collection and gathering of data from different data source.

In qualitative research, an interview is the most common type of data collection. Interviews help the interviewer to collect reliable and valid data that are related to the research objectives and questions. There are few methods of interview such as exploratory, depth, semi-structured and unstructured. In this case study, semi-structured interviews will be applied. Semi-structured interviews can be used to review topic that includes questionnaires (Tashakkori et al., 1998 cited in Saunders et al., 2009). Hence, data gather in questionnaires can be applied in the interview process. Semi-structured interview enables the interviewer to ‘probe’ answers, meaning that we can recognize and understand what the participants trying to explain and their     ideas which will definitely add value to the data secured. It may guide us to the essential understanding where we are not assumed of and lead us to the research objectives and questions. Focused interview will be conduct and face to face approach and will be written on paper and minute by tape recorder. The duration of the interview would be 30 minutes. By using a tape recorder, we will be able to focus what the interviewee trying to express and enable the interviewer to observe the facial expressions and tone of voice of the interviewee and recording process shall be permitted by the interviewee and closed circuit television (CCTV) camera will installed at the interview room to record on the interview process. An open question and focal point of the current market condition and specific action will be imposed. To summing-up the interview, it is feasible to ending it toward favorable circumstance by allowing the participants to give their view or opinion about the topic at hand.  A consent form needs to sign by both parties to ensure the confidentiality of data in the interview process.

However, in questionnaires, self-administered Internet and intranet mediated questionnaires using email will be executed. Likelihood of contamination is low, data is collected by the system and hence, no interviewer is required in this method. Rating questions five points Likert rating style scale would be utilized in questionnaires. Rating scale will be categories as strongly disagree, disagree, neutral, agree and strongly agree. All related person was contacted before sending the questionnaire to obtain their participation in this survey. Afterward, participants will be contacted to assure questionnaire was received. Participants must know the aim prior to the interview and questionnaire process.

All the information collected will be analysed quantitatively and precise findings and results were acquired. Data will be triangulated in both the interview and questionnaire process, where a depth finding will be explored and to ensure understanding and trustworthy of the results. The findings and results of the study will be furnished in graph format.

All the data collected will be used for the analysis. Since the overall research size is limited to 15 only there is no need of sampling. According to (Saunders et al., 2009) sampling techniques comprising a various range of approaches that enable us to minimize the amount of information collected by evaluated by elements  rather by all. There are two types of data sampling process, which are probability and non-probability data sampling. In this research, non-probability data sampling technique will be applied. Non-probability data sampling techniques are chosen based on the researcher subjective judgment.

In non-probability sampling, there are few ranges of techniques such as quota, purposive, snow-ball, self-selection and convenience. The purposive technique would be enacted in this research. Purposive sampling allowed us to manipulate our judgment to determine cases that enable us to meet our research objectives and answer our research questions. However, in purposive sampling, there are few strategies namely extreme case sampling, heterogeneous sampling, critical case and typical case sampling. In this scenario since population under consideration is only 15, there is no need of sampling in this case.

All standard ethical aspects which are relevant to this kind of approach were taken into account. Permission was received from the management for any employees of Monier Roofing, Porcelain Ace, Great Carrier and Asiatic Builders to participate. In the interview process, a consent form was distributed to gain consent from the participants and the contents are as followed.  Participants have rights to withdraw at any time and have the rights to reject to answer a question. Also, permission is required from participants in the recording process for both voice recorder and closed circuit television (CCTV) camera recorder. (CCTV) surveillance is required to monitor or watch the behaviour of both parties to avoid unnecessary circumstances. Participants will be informed of the interview process where the probe of questions is applied and may lead to discomfort of participants. No personal information will be collected from the participants. Terms and conditions containing privacy of data will be written in the consent form and all the data will not be shared with third parties without participants consent. We must not give pressure to the participants during the interview process, as participants have right to privacy. By not honouring it, participants might withdraw from the process.

However, in the questionnaires process, a consent form also will be provided in the questionnaires. Questionnaires through self-administered Internet and intranet mediated by email might be lead to serious ethical. For example, the participants might forward the set of questionnaires to the other participant and ask for the comment or opinion. It may affect the reliability of data collected. An ethical form needed to sign by the participants to ensure the confidentiality of the information and data circulated.

Participants must be voluntarily to participate in both the interview and questionnaires process. All the data and information collected will remain confidential and anonymous

This research is about Supplier Relationship for Asiatic Builders. Overall all the data have collected and analysed. Attached is the appendix is the survey and interview was given to the participants.

In questionnaires, there are 6 questions to Project Manager, 4 questions to Site Supervisor and 5 questions to Technical Manager & Sales Manager and 8 questions categorized to Purchaser. They were asked to answer in the rating of 1 to 5 which is known as Likert Scale. Rating scale will be categories as 1- Strongly Disagree, 2 – Disagree, 3 – Neutral, 4 – Agree and 5 – Strongly Agree.

The participants were selected based on their knowledge, experience and job task which is the most suitable informants. There are total of 25 questionnaires circulated out and the response received rate was 68%.

All the data collected was entered into an excel spreadsheet for analysis. Graphs were generated from the data and shown below. See Graphs 1 to 6 for data from questionnaire completed by Project Managers (n=5).  

60% of the Project Managers strongly agree when statement said that they like to directly liaise with a supplier to select the most suitable materials to be used, encourage site personnel to liaise with a supplier to ensure on-time delivery and promote good collaborative relationship with a supplier to expedite material ordering process as shown in Graph 1, 3 and 6.

However, in Graph 2 – 60% of them agree that project manager liaises with the supplier for on-time delivery. In Graph 4, 80% of them agree that Asiatic Builders will look into the quality of a product when selecting supplier while 20% is neutral. Graph 5, 60% – neutral they believe that Asiatic will select the supplier which have stock availability.

Graph 7 – 10 are questionnaire result been carried to five Site Supervisor. Result shows in Graph 7, 8 and 9 that there are 60% of them agree to directly liaise with a supplier to select the most suitable materials to be used and project manager and site supervisor to liaise with a supplier to ensure on-time delivery. In Graph 10, 80% of them are agreed to promote a good relationship with a supplier to enhance material and protection precaution.

Chart 11 – 15 below shows the result carried out to 3 Sales Manager and 1 Production Manager. All of the 100% strongly agree that collaborative relationship with the customer will eliminate productivity mistake, increased quality of materials, effective information sharing and enhance on-time delivery as shown in Graph 11, 12 and 13. In Graph 14 and 15, 75% of them strongly agree that good relationship with the supplier will lead a higher possibility to secure order and allowed feedback the quality of defects of delivered material. While 25% of them agreed.

Graph 16 – 23 illustrate below are questionnaire result to 3 purchasers of Asiatic. Refer to Graph 16, 20 and 21 – 67% of them strongly agree and 33% are agree based on the query of well-established with the supplier will have effective delivery, Asiatic will look into the quality of the product during supplier selection and will select the supplier which have immediate stocks. Graph 17 shows that 33% of them is strongly agrees and 67% agree with the statement of the project manager to liaise with the supplier to ensure on-time delivery. Further, in Graph 18 and 19, 67% agrees that site personnel to liaise with the supplier to ensure on-time delivery and is Asiatic Builders emphasize to select supplier on the lowest price, while 33% are neutral. Lastly, all of them are 100% strongly agree that collaborative relationship expedites material ordering process and lead to more competitive price.

In Asiatic Builders, purchaser, project manager, and site supervisor were selected for this interview process and three questions were given. However,     three questions are given to Production Manager and Sales Manager from     Monier Roofing. Those people are responsible for the supply chain process and shall give valuable response towards this case study. Semi-structured questions were appended and all their feedback was recorded for further analysis. Append below are one of the questions and the summary of findings. The coordination at some point need to reach out to site on account of work advance may run out from unique calendar because of sudden site condition, specialist constraint and climate condition. The augmentation administration to site in-charged individual is basic, Monier client administration will call and cross check the site advance preparation before 4 days from target conveyance date. This correspondence not exclusively will help the products convey on time and it can assist client with keeping the base stock at site to stay away from material wastage, moreover, it can animate income soundness.

A communitarian association with providers will increase the value of Asiatic Builders in term of cost, quality, and efficiency. When we team up with a chose provider, the two of us is sharing a same vision and mission to accomplish our objective. Surely, trust, uprightness, straightforwardness and legitimate correspondence must be built up amongst purchaser and provider with a specific end goal to accomplish a win-win circumstance. Also, a purchaser can pick up learning and aptitude and sharing of hazard from the provider. The issues that Asiatic is confronting is nature of materials, cooperative with providers will doubtlessly limit the imperfections of items, expanded proficiency, item advancement and deliver quality items.

Foundation synergistic association with the provider will unquestionably profit Asiatic Builders as far as cost lessening. It happen particularly went to the elective material proposition arrange. There are numerous kinds of materials with various capacity or focal points in the distinctive area. We will look for provider prompted by choosing the most reasonable and efficient materials to be utilized. Plus, there will be some less demanding strategy with lesser wastage can be utilized despite the fact that utilizing similar materials. In the other hand, the provider will have additionally comprehension of our usage with the goal that they mindful of their quality and imperfections of the material so specifically they can enhance it.

A cooperative association with clients unquestionably will decrease the imperfections of items and increment efficiency. We empower input from clients since they are the utensil and we can positively enhance our items execution. In this way, coordinated effort with working accomplices will be more productive.

(Researcher)  Do you think that good relationship with the supplier will enhance on-time delivery?

The below mentioned response is a summary of the information collected during the interview.

Interviewee (Purchaser) – Based on the input from purchasers of Asiatic Builders, they conclude that good relationships with the supplier will certainly enhance on-time delivery. Communication plays an important part when dealing with suppliers, poor communication may decrease supplier performance and product problems. Besides, socialization processes will increase the frequency of communications between supplier and buyer. The meaning of socialization processes is a conveyance of knowledge and information between supplier and buyer. Good communication with suppliers may help on-time delivery.

Interviewee (Project Manager) – Of course, with the good relationship with the supplier, we will be able to directly contact the person in charge from the supplier to update the delivery status. By eliminating using party to convey the message, the delivery status information can be confirmed immediately.

For example (Project Manager- Anonymous) : ‘Throughout, my experienced there will be the wrong date given or received from others due to the information or delivery date conveyed to few parties. For example, I request the material to be delivered on 15th June 2018 (Friday), through my purchaser the material only can be delivered on 18th June 2018 (Monday). This happened due to 15th June is a public holiday and subsequently Saturday and Sunday. Hence, the supplier only delivered by 18th June.’

Secondly, there always might be some ad-hoc issue happened at site. For example, excavation works needed for road crossing of underground services. The site personnel might be forgotten to inform the person in charge of blockage of road access.

Finally, some expected issue might affect the materials need to be used sooner or later due to change in activities at site. We shall liaise with the supplier to deliver earlier or later so that the materials can be delivered on-time provided we have a good relationship with the supplier and they are willing to follow. In general view, it is better to have a good relationship with supplier thus Project Manager can directly liaise with the supplier to enhance on-time delivery of materials.

Interviewee (Site Supervisor) – A good relationship with the supplier certainly will enhance on-time delivery because we can call the supplier to update the delivery status. We also can be highlighted our necessary to the supplier base on our necessity because there are too many changes at the site and it is not advisable to keep stock at the site due to double handling. It will promote site work efficiency and prevent delay of works

(Researcher)  Do you think that selecting the suitable supplier and evaluating supplier performance benefit to Asiatic Builders? Why?

Interviewee (Purchaser) – By selecting the right suppliers and evaluating the supplier performance will certainly add performance and benefit to Asiatic Builders. The supplier will pay more attention to our needs and improve or make a correction to the defects of materials to improve their quality of the materials. However, purchaser must keep monitoring supplier performance and be evaluating them based on the project basis. Each project is in charge by the different project manager and site supervisor, different aspect and view on supplier performance will beneficial to the company. Supplier evaluation process will maximize value; cost and waste will be addressed and reducing of risk to the company. To determine which suppliers can become long-term partner continuous evaluation process is mandatory.

Interviewee (Project Manager) – By selecting the suitable supplier, certainly, the quality of works will be improved. The suitable supplier always supplies the most appropriate materials to site with the right quantities at the right time. This can be eliminating our double handling works and unnecessary wastage. The suitable supplier can advise on the material behavior and proper method to use. Hence, wastages can be minimized. Evaluating suppliers benefit companies in long-run, suppliers definitely will make the correction on the mistakes done.

Interviewee (Site Supervisor) – Selecting the suitable supplier definitely benefiting us because they will supply the most suitable materials for us. Besides, by evaluating performance of suppliers, the suppliers will correct their mistakes to enhance long-term relationship.

(Researcher)  Why does collaborative relationship with supplier benefit in cost reduction, enhance productivity and minimise defect in quality of materials?

Interviewee (Purchaser) – A collaborative relationship with suppliers will definitely add value to Asiatic Builders in term of price, quality, and productivity. When we choose to collaborate with a selected supplier, both of us is sharing a same vision and mission to achieve our target. Certainly, trust, integrity, transparency and honest communication must be established between buyer and supplier in order to achieve a win-win situation. Moreover, a buyer can gain knowledge and expertise and sharing of risk from the supplier. The problems that Asiatic is facing is quality of materials, collaborative with suppliers will surely minimize the defects of products, increased efficiency, product innovation and produce quality products.

Interviewee (Project Manager) – Establishment collaborative relationship with the supplier will certainly benefit Asiatic Builders in terms of cost reduction. It happen especially came to the alternative material proposal stage. There are many types of materials with different function or advantages in the different location. We shall seek for supplier advised by selecting the most suitable and economical materials to be used. Besides, there will be some easier method with lesser wastage can be used even though using the same materials. In the other hand, the supplier will have more understanding of our utilization so that they aware of their quality and defects of the material so that directly they are able to improve it.

Interviewee (Site Supervisor) – Collaborative relationship with the supplier will benefit in term of improving materials. The supplier will pay more attention to our needs and improve or make a correction to the defects of materials to improve their quality of the materials.

(Researcher)  How do you think that collaborative relationship with the customer is helping to minimize defects of materials, increase productivity and improved performance through information sharing?

Interviewee (Production & Sales Manager) – A collaborative relationship with customers definitely will reduce the defects of products and increase productivity. We encourage feedback from customers because they are the applicator and we can certainly improve our products performance. Thus, collaboration with working partners will be more profitable.

(Researcher)  How does the good relationship with the customer will enhance on-time delivery and reducing delivery lead time?

Interviewee (Production Manager) – Enhance a good relationship with the customers enables us to manage and plan our inventory and production well. We able to reduce holding costs of materials and forecast customers order.

Interviewee (Sales Manager) – We will advise customer plan ahead to raise the purchase order in early stage and in bulk (for easy reference) by project to project basic, then follow by delivery memo notice in 2 weeks advanced lead time, we will assure the goods can deliver on time.

The coordination sometime need to extend to site because of work progress might run out from original schedule due to unexpected site condition, worker limitation and weather condition.  The extension service to site in-charged person is essential, Monier customer service will call and cross check the site progress readiness before 4 days from target delivery date.  This communication not only will assist the goods deliver on time and it can help customer to keep the minimum stock at site to avoid material wastage, furthermore, it can stimulate cash flow healthiness.

(Researcher)  How do you think that good relationship with the customer will lead higher chances to secure the sales order?

Interviewee (Sales Manager) – Contractor normally will follow the Bills of Quantity (BQ) specification after project awarded to him.  By maintaining with good understanding on the pricing history approach, majority of the customer will deem to accept the price after minor price negotiation. For example:

However, the secure order process will become more challenging if:-

1. Tender price is higher than cost
2. Contractor is facing cash flow issue

Tender price is higher than the cost

This happen by mistake where the Quantity Surveyor (QS) has wrong estimation on the material price, the customer is encouraged to open the discussion to the supplier directly to request a special rate with his/her persuasive reason and good relationship.  Supplier certainly will compromise to create a win-win situation.

Contractor is facing tight cash flow

This situation will happen when the contractor might not able to collect the payment from some developers and the delaying of payment collection will direct impact on the payment ability to suppliers.

The situation can be neutralised if contractor has a strong back up from manufacturer. The manufacturer could further identify and introduce his trustable authorised distributors/traders to make the deal done or he can further participating in the sales negotiation process (contractor ßà manufacturer ßà trader) to persuade the trader to accept the sales order. The above finding for the organization suggests that supplier relationship is very important in this business context and can do wonders for the company if done in the right manner. Most of the interviewed candidates and survey response indicate that healthy relationship with the suppliers and more decentralized decision making can go a long way in establishing proper supply chain and it can also a go a long way in solving current supply chain related issues at the company.

Conclusions

The objective of this research was to propose a suitable and reliable method to eliminate the current problems facing by Asiatic Builders. Since the market requirement is increased dramatically cooperation and relationship between supplier and customer have become essential. By utilizing Supplier Relationship Management, Asiatic Builders can obtain a reasonable cost of procurement, enhance on-time delivery and sustain a high quality of products. Based on the recommendation above, it will certainly minimize the problems occur at Asiatic Builders.

Supplier relationship management has gained utmost importance in the current times. As seen in our analysis of the primary interviews and also review of the literature, to optimise the organisation need to streamline it’s supplier relationship management issues. All the current suppliers need to be graded as per the product supplied by them, on parameters of timeliness, quality, conduct. This kind of rating should also be shared with them, so that they know the kind of expectation the organisation is having and where they are standing on that front. This whole process is very important and it is imperative that the whole focus is provided on this exercise. This will also help in proper monitoring of all supplier related activity. The research has also thrown up that floor managers or the operational chief at times are better equipped to talk to suppliers and their say in the whole process should be respected and made more prominent. This is where organisation should look into proper delegation of power and authority to people who are in better position for decision making. Modem day organisations are working very closely with shoppers in forecasting demand, perceiving the changes required in raw material setup and at times also in proper logistical management. It is important that organisation works hand in hand with their suppliers and provide superior turn around time and quality. This relationship between organisations and suppliers need to graduate.  The role of management is of utmost importance here and some daily challenges can be done away by using proper tools of management methods. Technology in the modern era need to be leveraged to a larger extent as it will free up resources for better supplier coordination which at times require human interventions. The imperative of the organisation should be on delivery and it would only be measured on the parameters decided. Company should implement E-procurement method for better transparency in pricing and should also be environmentally conscious by implementing green procurement. In the supplier selection process, it is essential to recognize those suppliers which have high-level of learning ability. The purchaser should choose a supplier which is willing to share, admit and correct their mistakes.

Cooperation and relationship between buyer and supplier have become mandatory. Hence, closer cooperation can be seen between procurement activities and selected suppliers. Improvement in purchasing process should be scaling up when required. The selected suppliers are necessary to make structured enhancement to internal processes and criteria which will improve on the relationship and eventually positively impact on the supplier’s performance. Furthermore, the result will provide an understanding of the priorities and specification to the procurement practitioners. Prioritized the determined criteria can be utilized to measure supplier execution and hence, to established organization performance. Managing a good relationship with supplier certainly impact on the organization performance rather than just purchasing, it shows that the entire is greater rather than the section. There are many ethical problems seen in project management, material, and vendor and subcontractor relations. According to (Rebecca and John, 2014) ethical conduct is one of the principal value handbooks for employees to a make daily resolution and towards a goal of victory. The coordination sometime need to extend to site because of work progress might run out from original schedule due to unexpected site condition, worker limitation and weather condition.  Cooperation and relationship between buyer and supplier have become mandatory. Hence, closer cooperation can be seen between procurement activities and selected suppliers. Improvement in purchasing process should be scaling up when required.

The selected suppliers should understand the expectancy and the main evaluation criteria of Asiatic Builders. Refer to the analysis and findings above, criteria of quality, on-time delivery and select the most appropriate materials is most important in Asiatic Builders. The coordination sometime need to extend to site because of work progress might run out from original schedule due to unexpected site condition, worker limitation and weather condition. Provider relationship combination upgrades organization’s connection with their providers (Hong, Park, Jang and Rho, 2005 refered to in Pejvak et al., 2016). It is likewise a business procedure by which all associations are overseen amongst organizations and its providers (Kroenke, 2012 refered to in Tseng, 2014). As per Moeller et al., 2006 (refered to in Pejvak et al., 2016) provider relationship is a procedure of performing exercises containing build up, upgrade and advance great associations with providers to make esteem. Steady on time conveyance of products will just happen when provider relationship is sufficiently solid. Provider Relationships is combination between two gatherings, where the union expands the edge for the provider and conveying huge incentive for cash to a client. It’s shared advantage, upper hands to the two gatherings and makes noteworthy esteem chain.  The extension service to site in-charged person is essential, Monier customer service will call and cross check the site progress readiness before 4 days from target delivery date.  

The selected suppliers are necessary to make structured enhancement to internal processes and criteria which will improve on the relationship and eventually positively impact on the supplier’s performance. Furthermore, the result will provide an understanding of the priorities and specification to the procurement practitioners. Prioritized the determined criteria can be utilized to measure supplier execution and hence, to established organization performance. Managing a good relationship with supplier certainly impact on the organization performance rather than just purchasing, it shows that the entire is greater rather than the section.

There are numerous moral issues found in venture administration, material, and seller and subcontractor relations. As per (Rebecca and John, 2014) moral direct is one of the main esteem handbooks for representatives to a make day by day determination and towards an objective of triumph. The coordination at some point need to stretch out to site due to work advance may run out from unique calendar because of surprising site condition, laborer impediment and climate condition. Collaboration and connection amongst purchaser and provider have turned out to be obligatory. Henceforth, closer participation can be seen between acquisition exercises and chose providers. Change in buying procedure ought to scale up when required. Determination of providers is a noteworthy assignment to exude maintainable production network. Administration needs to recognize the best and appropriate providers to help them in accomplishing corporate systems. Hutchins (2002); Wagner (2001) referred to in Roger (2006) expressed that it is basic to develop good adjusted provider connections from community oriented partnership to antagonistic connections. Each provider has diverse criteria which offer advantages, for example, cost decrease, lead time, client satisfaction and so forth. For instance, delay in conveyance can influence the undertaking site along these lines increment the venture cost and postponing in giving over to the customer. Along these lines, providers must be assessed in light of different criteria.

The chose providers are important to make organized upgrade to interior procedures and criteria which will enhance the relationship and eventually decidedly effect on the provider’s execution. Besides, the result will give a comprehension of the needs and particular to the acquirement specialists. Organized the decided criteria can be used to gauge provider execution and thus, to set up association execution. Dealing with a decent association with provider absolutely effect on the association execution instead of simply buying, it demonstrates that the whole is more noteworthy as opposed to the area. According to the analysis, most of them specify that evaluation of suppliers is essentially important. Suppliers tend to improve their performance when they are evaluated and monitored. By recognize supplier’s strength and weakness,     it is easier to consolidate inventory administration and its help the purchaser to categorize their criteria. Through summarizing Asiatic Builders can explore to enhance a long-term relationship with suppliers which are willingly to improve and rectify their mistakes. According to (Sakun and Chee, 2011), who had conducted a study on automotive industry in Thailand,, a positive and notable relationship between internal consolidation and customer delivery accomplishment will lead to enhanced delivery performance. Moreover, it is necessary to share information and cooperation between division to enhance on delivery performance (Sabath, 1995; Birou et al., 1998; Fawcett et al., 1997; Dro¨ge et al., 2004; Iyer et al., 2004; Germain and Iyer, 2006; Flynn et al., 2010 cited in Sakun and Chee, 2011). Furthermore, (Li et al., 2003 cited in Sakun and Chee, 2011) pointed out that direct supplier development has proven to improve in purchasing execution in terms of quality accomplishment and on-time delivery. Also, Narasimhan and Carter, 1998 (cited in Sakun and Chee, 2011) stated that long-term relationship with suppliers can have a good impact on delivery ability.

Supply chain is one of the most critical components of any business and it is imperative for the business to keep working on its constant evolution. Some recommendations are notable important to Asiatic Builders to promote a better quality of works hence mitigate risk and control budget and cost of a project to earn profits. Below are the recommendations which are proposed for the company.

• Early involvement of supplier: Asiatic Builders need to look into early involvement with the supplier on the stages of the proposal of products.  Inter-firm intellect enables users to share knowledge and create values which can be determined in supplier relationship management and have a major responsibility in supply chains. Suppliers can educate the applicator and project manager on the usage of products and inspect on the quality of works during application of products. Thus, defects of workmanship can be minimised.
• Trust: It is necessary to build trust with selected supplier.  Once trust is well-established between working partners, both parties are able to share and help each other. Great level of trust can mitigate risk, promote confidence and resolve problem arise. Trust can be perceived as the major relational driver to develop the competitiveness of buyer-supplier relationship.
• E-Procurement & Green procurement: Company should implement E-procurement method for better transparency in pricing and should also be environmentally conscious by implementing green procurement. In the supplier selection process, it is essential to recognize those suppliers which have high-level of learning ability. The purchaser should choose a supplier which is willing to share, admit and correct their mistakes. Purchaser must also choose and procure materials is certified with the quality of products, such as ISO 9001, (SIRIM) Standard and Industrial Research Institute of Malaysia and etc. It is because quality control in construction can affect the conformity issue, cost, safety and so on. If the materials procure is not according to certain standard, the building can collapse at any time. Moreover, it is necessary to evaluate the suppliers before and after the procurement process is done and to keep monitoring the performance of the supplier on the next project.
• Supplier criteria: Based on the questionnaire circulate to Project Managers and Purchasers of Asiatic Builders; they express that criteria of price, quality, and on-time delivery are important. These three criteria are significantly important in achieving cost-effective contractor-supplier relationship. Asiatic Builders should evaluate the supplier based on the criteria above.
• It is necessary to apply a code of ethics in Asiatic Builders. There are many ethical problems seen in project management, material, and vendor and subcontractor relations. According to (Rebecca and John, 2014) ethical conduct is one of the principal value handbooks for employees to a make daily resolution and towards a goal of victory. Every employee should brief on the ethical rules when joining. Some examples of the rules are listed below:

– To be considerate, courteous and to negotiate with a fair expedition.

– Fair dealing and honest to all subcontractors and suppliers.

–     All employees must not accept any money of present from any subcontractors and suppliers.

– All employees must not reveal the procurement process and not disclose any data to other parties with interest.

– To procure the materials based on the value of price, quality, and service which guarantee the best for the company.

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