Exploring the Effect of Supplier Management on Performance in the Korean Automotive Supply Chain

SUMMARY This article explores the relationship between supply management practices and performance from a supply chain perspective. A conceptual model of suppliermanagement practices and performance was developed and tested using covariance structural modeling. Survey data were gathered from first‐tier suppliers in the Korean automotive industry. The results showed that in a supply chain, the suppliermanagement practices adopted by first‐tier suppliers affected second‐tier suppliers' performance. Second‐tier suppliers' performance consequently influenced both first‐tier suppliers' quality and delivery performance. These findings suggest that best practices in supplier management should be transferred upstream in the supply chain to improve overall performance of the entire supply chain.