The effects of volume consolidation on buyer-supplier relationships: A study of Chinese firms

Volume consolidation is a major consequence of supply base reduction. This study explores the relationships between volume consolidation and supply chain outcomes such as buyer coordination costs, supplier performance, buyer environment learning ability, and buyer learning from the supplier. This study also examines the effects of these supply chain outcomes on buyer satisfaction. Based on results derived from an empirical study of 398 Chinese manufacturing companies, it is found that volume consolidation enhances supplier performance, buyer learning from the supplier, and its environment learning ability. It is also determined that coordination costs negatively affect supplier performance and buyer satisfaction. Environment learning ability does not affect buyer satisfaction, while supplier performance and buyer learning from the supplier positively affect buyer satisfaction. As such, the effects of volume consolidation are not limited to enhanced supply chain performance, but also to organizational learning in the supply chain. (C) 2009 Elsevier Ltd. All rights reserved.