The Effect of Output Monitoring On Supplier Logistics Performance and Flexibility: The Mediating Effects of Buyer-Supplier Integration in the Context of Essential Medicines Supply

Abstract

This paper examines the relationship between output monitoring and supplier performance. It focuses specifically focuses on buyer-supplier exchange relationships in delivering essential medicines in Tanzania, and examines the mediation effects of buyer-supplier integration on supplier’s flexibility and supplier logistics performance. The resource-based view of the firm was used to frame the relationships by considering output monitoring efforts and the buyer-supplier integration as resources aimed to improve performance. A survey data of 111 public-owned health facilities selected randomly after stratifying them into hospitals, health centres and dispensaries was used for final analysis. Structural equation modelling using Smart PLS3 was employed to ascertain the relationship between output monitoring, buyer-supplier integration and supplier logistics performance and flexibility. The research hypotheses focused on both direct and indirect effects. The results revealed that the buyer-supplier integration partially mediates the effects of output monitoring on supplier logistics performance while fully mediating the effects of output monitoring on supplier flexibility. The results of the study imply that buyer-supplier integration is critical for multiple dimensions of performance improvement.