International Bulletin of Business Administration ISSN: 1451-243X Issue 10 (2011) EuroJournals, Inc. 2011 http://www.eurojournals.

com

Canonical Correlation Analysis between Supply Chain Relationship Quality and Supply Chain Performance: A Case Study in the Iranian Automotive Industry
Ali Mohaghar Associate Professor, Management Department University of Tehran, Tehran, Iran E-mail: amohaghar@ut.ac.ir Tel: +98-912-3848256 Hossein Safari Assistant Professor, Management Department University of Tehran, Tehran, Iran E-mail: hsafari@ut.ac.ir Tel: +98-912-1361150 Rohollah Ghasemi Corresponding Author, M.S. Candidate of Industrial Management University of Tehran, Tehran, Iran E-mail: ghasemir@ut.ac.ir Tel: +98-935-8070906 Behzad Abdullahi M.S. Candidate of Industrial Management University of Tehran, Tehran, Iran Tehran, Iran E-mail: behzad_abd812@yahoo.com Tel: +98-911-9927875 Mohammad Hasan Maleki PhD Candidate of Operation Research University of Tehran, Tehran, Iran Tel: +98-919-1723105 E-mail: momaleki@ut.ac.ir Abstract Nowadays, Companies to develop close relationships with suppliers and customers alike are encouraged. Reviewing dimensions of quality and supply chain relationships, makes better understanding of relationships and interactions between suppliers and the cause it can be used to achieve supply chain performance (SCP). The aim of this paper, is investigating interactions between indicators of supply chain relationship quality (SCRQ) and SCP in supply chain (SC) of SAIPA Company. To do this after reviewing the literature and identification of indicators, a questionnaire between experts was distributed and 201 questionnaires were completed. To assess the relations between the set of SCRQ and SCP, canonical correlation analysis (CCA) was used. Research findings in this article refers that 122

there is the significant and positive relationship between the set of indicators SCRQ and set parameters of SCP. Keywords: Supply chain relationship quality (SCRQ), supply chain performance (SCP), canonical correlation analysis (CCA), Supply chain of SAIPA Company.

1. Introduction
Iranian automotive industry will become the most important industry in Iran through years. Jointing to World Trade Organization (WTO), from one hand will force companies to pay International Trade Tariffs and on the other hand multi-aspects competition is absorbing special consideration to this industry in Iran. Importance of SC is convincing companies to tie their competitive existence to SCM (Zuckerman, 2002). Supply Chain Management (SCM) is set of approaches integrates suppliers, manufacturers, warehouses, and markets. This integration causes products manufactured in best cost, time, and place. This exactness will reduce total costs in SC and will satisfy customers' demand (Simchi and Kaminsky, 2000.). In recent years, relationships in SC are dealing with impressive changes. Companies eagerly courage to establish and develop close and long term relationships with their suppliers (Fynes et al., 2005a). Identifying different aspects of SCRQ, is leading to better understanding of relations and interactions between suppliers and will promote SCP (Fynes et al. ,2008).Empirical studies in SCR are focused on the nature of relationship process and researchers were underestimating study on SC effects on companies' performance (Fynes et al. ,2004). A review on literature obviously depict that not only are there some researches investigate interactions between different dimensions of SCR (Fynes et al., 2004; Woo and Ennew, 2004; Fynes et al., 2005a; Fynes et al.,2005b; Huntley, 2006; Rauyruen and Miller, 2007; Fynes et al.,2008 and Su et al., 2008), but also researchers studied SCP. How ever, there are a few ones focusing on SCR's effect on SCP (Fynes et al., 2004; Fynes et al., 2008). This lack of study motivated us to consider relationship between SCRQ and SCP in SC of SAIPA Company. The aim of this paper is investigating interactions between indicators supply chain relationship quality (SCRQ) and SCP in supply chain SC of SAIPA Company. This study was using second source data and case study. First we studied literature of SCRQ, SCP, and searches about SCRQ's impact on different aspects of a company. After reviewing the literature and identification of indicators, a questionnaire between experts was distributed and 201 questionnaires were completed. At the end we utilized canonical correlation analysis (CCA) by SAS9 and STATISTICA7 software and analysis output was published. By performing this research, we hope that some light is shed on the relationship between SCRQ and SCP in automotive industry.

2. Previous Research
2.1. Supply Chain Relationship Quality (SCRQ) Keller (2002) found that long term and useful relationship between different parts of a SC can make a powerful SC. Also Saad et al. (2001) identified continuous and long term relationship between organizations is an important factor in SCM. Su et al. (2008) defined SCRQ as a degree that partners in a relationship are committing to have a long and active relationship. In Table.1 there is a short review of researches about quality of relationships between two businesses (B2B).

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Table 1:

A review of relationships between quality and performance in B2B

Key dimensions Trust, adaptation, co-operation, and communication Co-operation, adaptation, and atmosphere Communication, co-operation, interdependence, commitment, trust, and adaptation Communication, co-operation, commitment, and adaptation Communication, trust, co-operation/ Institutionalization, adaptation, and atmosphere Trust, satisfaction, commitment, and service quality Communication, co-operation, adaptation, and trust Trust, communication, co-operation, atmosphere, and adaptation

Author(s) Fynes et al. (2004) Woo and Ennew (2004) Fynes et al. (2005a) Fynes et al. (2005b) Huntley (2006) Rauyruen and Miller (2007) Fynes et al. (2008) Su et al. (2008)

2.2. SCRQ's Dimensions We define different dimensions in SCRQ operationally that is collected from literature study. 2.2.1. Communication Communication difficulties are identified as a major cause of problems among relationship parties (Lages et al., 2005). Also Anderson and Narus (1990) defined it as a meaningful and on time share of information in a formal or informal ways between companies. Mohr and Spekman (1994) stated that there are three aspects of communication behavior that are important in relationships. Firstly, the quality of the communication which includes aspects such as accuracy, timeliness, adequacy and credibility. Secondly, the form of information sharing or the extent to which critical, and sometimes proprietary, information is exchanged. Thirdly, participation, or the extent to which both parties jointly engage in planning and goal setting. The quality of communication, information sharing and participation are all significant predictors of successful SC relationships. 2.2.2. Trust An important reason for unsuccessful relationships is the lack of trust between the partners. The establishment of trust is considered as the basic reason for the long-term successful relationships by both researchers and practitioners (Walter et al., 2002). Also Ryssel and Ritter (2000) defined it as customer trust as a degree that a customer believe a supplier is honest, suitable, and benevolent. In another definition, it is defined as expectations and attitudes that eventually are forming between partners in a relationship. 2.2.3. Adaptation How much a buyer or seller does invest on developing a relationship to make it more flexible? (Ford and Hkansson, 2006). Adaptations are important for a number of reasons. Firstly, they can represent considerable investments by one or both parties. Secondly, they may be of critical importance for the conduct of business. Thirdly, the investments frequently cannot be transferred to other SC relationships. Fourthly, the adaptations may have significant consequences for the long-term competitiveness of firms: adapting to one relationship may enhance the competencies and attractiveness of a particular supplier/customer (Fynes et al., 2005a). 2.2.4. Commitment How interested are partners in a relationship to increase their dependency? It suggests a kind of prospective approach that helps partners to face with unpredictable problems in future (Gundlach et al., 1995). Also Mohr and Spekman (1994) found a positive correlation between commitment and partnership success.

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2.2.5. Interdependence A company's need to keep its interaction balance for approaching its goals. Interdependence between partners is affected by: 1) Amount of trade off between company A and company B, and percentage of benefits gained by each other's cooperation; 2) How much commitment does have company A to marketing strategies of company B?; 3) How much supportive are companies to make decisions, entering to a new market or leaving the present market? (Fynes et al., 2005a). 2.2.6. Co-operation All the activities held in common or directed cooperation with others for obtaining shared points, goals and interests. This co-operation contained interests, future expectations, and special behaviors (Su et al., 2008). Co-operation in exchanging information on production schedules, new products/processes and value analysis can both reduce product costs and improve product/process innovations (Landeros and Monczka, 1989). 2.2.7. Atmosphere Woo and Ennew (2004) are describing it as a result of relationship that shows closeness of two partners. They mentioned that atmosphere is like environment in some aspects like on technical principles from the external situation of a company. Of course there are some differences. Atmosphere is a result of relationship with others. Also Su et al. (2008) stated that Atmosphere exceeds trust and commitment, and it gives a wider perspective to understand relationship quality from partner-based view. The atmosphere surrounding the buyerseller relationship is also of relevancy to the conceptualization of relationship quality. Therefore, the following hypothesis is proposed. 2.3. Supply Chain Performance (SCP) There are a lot of empirical studies about SCR's effect on operational performance in a company. These studies have different definitions of SC, measurement and performance approaches. For instance, Narasimhan and Jayaram (1998) had shown that relationship quality leads to better operational performance. They had found that integration of different activities of SC like resource allocation is leading to operational goals consists of reliability, cost flexibility, and quality. They examined the relationship between sourcing decisions, manufacturing goals, customer responsiveness and manufacturing performance using structural equation modeling (SEM). They found that integrating SC activities involves aligning sourcing decisions achieves manufacturing goals in terms of dependability, flexibility, cost and quality. Uzzi (1997) had mentioned to a clear relationship between relationship quality and performance in clothing industry in New York. Fynes et al. (2004) stated that the recurring theme in all of these studies is the role of SC management in improving SC performance. They said that Thus while SC dimensions such as trust, and adaptation have been widely tested in the marketing literature in terms of their impact on marketing performance, their impact on SC performance has received less attention in the operations and supply chain management literature. Also Fynes et al. (2008) utilized quality performance, Delivery performance, cost performance, and flexibility performance to evaluate SCP. The questionnaire we use for gleaning data in this paper is what they implemented for their research. 2.4. Canonical Correlation Analysis (CCA) CCA is a multi variables statistical approach for measuring linear relationship between different groups of variables. This approach can play an important role in exploratory mean when multi attribute variables have some relations to an analytical category (Lima et al, 2004). CCA is obtaining linear 125

composition of predicting variables that has the most correlation with linear combination of criteria variables. These combinations are shown as follow: (LeClere 2006). W =a1x1+ a2x2 ++ apxp V= b1y1 + b2y2+ + bqyq The number of dependent variables (four) or the number of independent variables (seven), whichever is smaller, determines the maximum number of canonical functions. Thus the analysis is based upon the derivation of four canonical functions (Mai and Ness, 1999). Table 2 is showing some researches in CCA field.
Table 2: Some previous research which applied CCA technique
Methodology They demonstrated a meaningful relationship between Job satisfaction and EFQM by utilizing CCA. They used CCA to study relationships between TQM and organizational performance. Using canonical correlation analysis, this study examined the interdependencies in investing And financing decisions of restaurant firms. They used CCA to study enablers and results in EFQM. This study utilized a canonical correlation approach to segment the senior pleasure traveler market.

Author(s) Tutuncu and Kucukusta (2009) Macinati (2008) Jang and Ryu (2006) Bou-Llusar et al. (2005) Baloglu et.al (1998)

3. Proposed Model
This Proposed model is composed of two kinds of variables: supply chain relationship quality (SCRQ) and supply chain performance (SCP) as in the following figure.
Figure1: Research proposed model
Communication Trust Adaptation Commitment Interdependence Co-operation Atmosphere SCRQ SCP Delivery performance Quality performance

Cost performance

Flexibility performance

According to the above-mentioned figure research question is: Is there any meaningful relationship between SCRQ and SCP? And Research Sub questions are: 1. Is there any correlation between SCRQ criteria and SCP criteria? 2. In a set of SCRQ criteria, which one has the most and which one has the least impact on creating a meaningful relationship between SCRQ and SCP? 3. In a set of SCP criteria, which one has the most and which one has the least impact on creating a meaningful relationship between SCRQ and SCP? 126

4. Research Methodology
4.1. Research Method Research method is used for this article is descriptive-correlation. This study was using second source (library and other recorded observations) data and case study. First we studied literature of SCRQ, SCP, CCA, and researches about SCRQ's impact on different aspects of a company. Criteria were extracted and we distributed questionnaires between experts and professionals in SAIPA's SC and 201 filled questionnaires were gathered. At the end we utilize canonical correlation analysis (CCA) by SAS9 and STATISTICA7 software and analysis output was published. 4.2. Statistical Population and Sample Size Statistical population in this research is including Industrial Experts (CEO, Logistic experts, Operational marketing managers) in SAIPA supply chain and composed of three levels in SC. Up streams (First level suppliers), company itself and Down streams (First level customer: SAIPA YADAK Company). There were 398 Experts in 6 companies. With regard to population, sample size was determined and it was about 196 persons. We used random classified sampling for this research. Table 3 is illustrating the ratio of this groups and sample sizes. After distribution of 285 questionnaires we could gather 201 filled questionnaires from experts.
Table 3:
Company SC position Population size % in population Sample size % in sample

Population and sample size in 6 companies in SAIPA's SC

SAIPA YADAK Down stream 46 11.5% 24 11.9% SAIPA AZIN Up stream 39 9.8% 23 11.4% SAIPA Press Up stream 36 9.1% 20 9.9% MEGA Motor Up stream 45 11.3% 28 13.9% SAZE GOSTAR Up stream 180 45.2% 77 38.4% SAIPA Central part 52 13.1% 29 14.5% Total 398 100% 201 100%

4.3. Information Gathering Tools Implemented questionnaires are composed of two parts: 26 questions about SCRQ's dimensions make the first part, Communication, Trust, Adaptation, Interdependence, and Co-operation with 4 questions each and Commitment and Atmosphere with 3 questions. Second part was about SCP that contained 8 questions about Quality performance, Cost performance, Flexibility performance, and Delivery performance. 4.4. Reliability and Validity 4.4.1. Reliability For reliability evaluation we utilized Cronbach's alpha. Results are showing that verifying evaluation is more than 70% and questionnaire is trustable.
Table 4: Verification test results using Cronbach's alpha
Number of questions 34 26 8 Cronbach's alpha coefficient 0.936 0.919 0.819

Test Scale All of Questionnaire SCRQ SCP

4.4.2. Validity For evaluating validity of questionnaires, we used content validity and construct validity.

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4.4.2.1. Content Validity Content validity assured us that all aspects and parameters that impact on main content were evaluated. For testing content validity after devising a framework for questionnaire, we asked 16 experts to modify it if needed. These experts evaluated all implemented criteria in questionnaire and modified it. 4.4.2.2. Construct Validity In this research we used factor analysis for considering the structure of research. Exploring factor analysis and criteria factor was used to investigate construction of questionnaire. Factor analysis depicted that all mentioned criteria are measured in these questionnaires. Factor analysis result of SCRQ's questionnaire: We considered 26 questions by factor analysis and based on 201 gathered questionnaires, KMO was 0.802 that showed the sample size was enough. Also with consideration of sig in Bartlett test, it was smaller than 0.05. In addition 7 factors with total variation of 68.63%, could completely evaluate SCRQ. Factor analysis result of SCP's questionnaire: We considered 8 variables in the second part and based on 201 gathered questionnaires, KMO was 0.743 that showed enough volume of sample size. Also sig in Bartlett test was smaller than 0.05. In addition 4 factors with total variation more than 80.66% could completely evaluate SCP. These results mention good construct validity of questionnaire.

5. Data Analysis
For entering data gathered from questionnaires in canonical correlation analysis, we define a new variable for every extracted factor and use the mean of scored answers. So we define 11 variables (7 for SCRQ and 4 for SCP). We utilize SAS9 & STATISTICA7 software for recognizing correlation between two sets of variables and then CCA was used between SCRQ and SCP.
Table 5: Correlation coefficient between SCRQ and SCP
Delivery performance 0.5278 0.5739 0.5357 0.4224 0.6509 0.4172 0.4862 Flexibility performance 0.3637 0.4053 0.4744 0.3972 0.2881 0.2648 0.4863 Quality performance 0.5170 0.5536 0.5043 0.4546 0.5032 0.4742 0.4774 Cost performance 0.2545 0.2328 0.3381 0.3917 0.3630 0.2721 0.5470

Communication Co-operation Commitment Adaptation Interdependence Trust Atmosphere

For answering the first sub question, based on table 5, we can see a meaningful positive correlation between SCRQ criteria and SCP criteria. Delivery performance and interdependence and co-operation have the most strong correlation and cost performance and co-operation has the least correlation in this table. For example in SCRQ criteria, commitment, atmosphere, interdependence and trust have the least correlation with flexibility performance. Also co-operation and relationship have the most and adaptation has the least correlation with quality performance.
Table 6: Canonical correlation analysis summary
SCRQ 7 79.45% 40.2% Communication SCP 4 100% 42.42% Delivery performance

N=201 Number of variables Extracted variance Redundancy index Variables: 1

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Table 6:

Canonical correlation analysis summary - continued

2 3 4 5 6 7 Co-operation Commitment Adaptation Interdependence Trust Atmosphere Flexibility performance Quality performance Cost performance

Table 6 is showing enveloped data variation by CCA. The extracted variance for SCRQ and SCP is showing that 79.45% of canonical roots are covered by internal SCRQ variation and also 100% of canonical roots are covered by internal SCP variation. These statistics are very considerable and support CCA utilization.
Table 7: Statistical tests
Canonical R 0.8435 0.5239 0.3074 0.1609 Chi-square Tests With Successive Roots Removed Canonical R2 Chi-sqr df P 07115 327.78 28 0.0000 0.2745 86.62 18 0.0000 0.0945 24.36 10 0.0067 0.0259 5.09 4 0.2779 Lambda Prime 0.1846 0.6398 0.8820 0.9741

Canonical roots 0 1 2 3

Usual canonical correlation analysis meaningful level for interpretation is 0.05. As it's shown in table 7, P-value is used for this research, first, second, and third canonical variables are statistically meaningful. In addition other statistical tests like "Lambda Prime" and " " are proofing our results. Based on diagram 1 we considered first canonical variable and ignored interpretation of second and third variables because of their weak canonical cross loading and redundancy index.
2

Diagram 1: Paired correlation between first canonical variable

For answering research question, we focus on table 6 and 7. Relationship importance between SCRQ and SCP is determined by canonical correlation (Rc) and Eigen value (Rc2). Based on table 7, first variable Rc is 0.84 and Rc2 is 0.71. Because Rc cannot directly prepare the shared variation, we utilize redundancy index. Redundancy index for Rc2 is in multiple regression analysis. Table 6 is showing that we can predict more than 42% of changes in SCP by studying changes in SCRQ. Also we can predict SCRQ behavior based on studying SCP more than 40%. These findings 129

are mentioning a meaningful relationship between SCRQ criteria and SCP criteria, also SCRQ criteria has a positive effect on SCP criteria.
Table 8:
SCRQ set Communication Co-operation Commitment Adaptation Interdependence Trust Atmosphere Extracted variance (%) Redundancy index (%)

Canonical loading and canonical cross loading for meaningful canonical variables in SCRQ.
Canonical variable1 Canonical loading Canonical cross loading 0.7340 0.6192 0.7915 0.6676 0.7305 0.6162 0.6121 0.5163 0.8335 0.7030 0.6220 0.5247 0.6785 0.5723 51.65 36.75 Canonical variable2 Canonical loading Canonical cross loading -0.1135 -0.0595 -0.1969 -0.1031 0.1321 -0.0692 0.3192 -0.1672 -0.0312 -0.0163 -0.0210 -0.0110 0.6187 0.3242 7.93 2.17

Table 9:

Canonical loading and canonical cross loading for meaningful canonical variables in SCP
Canonical variable1 Canonical cross Canonical loading loading 0.8891 0.7499 0.5662 0.4776 0.7788 0.6569 0.4996 0.4214 49.17 34.99 Canonical variable2 Canonical cross Canonical loading loading -0.0109 -0.0075 0.3748 0.1964 0.0057 0.0030 0.8298 0.4348 20.73 5.69

SCP set Delivery performance Flexibility performance Quality performance Cost performance Extracted variance (%) Redundancy index (%)

For answering second and third sub questions, we used canonical cross loading for evaluating the importance of every criteria in meaningful canonical variable. In general the researcher faces the choice of interpretation of the functions using canonical weights (standardized coefficients), canonical loadings (structure correlations) or, canonical cross loadings. Given a choice, it is suggested that cross loadings are superior to loadings, which are in turn superior to weights (Hair et al., 1998). According to table 8, all variables in both sets have a high canonical cross loading in creating a canonical variable in their sets. So they are very effective in creating a meaningful relationship between SCRQ and SCP. In SCRQ variables, interdependence and co-operation have the highest effect and adaptation has the lowest effect in creating this relationship. According to table 9, in the SCP criteria, delivery and quality performance have the highest and cost performance has the lowest impact on creating a relationship. In addition, based on high amount of canonical cross loading in both sets, we can conclude that SCRQ variables have a positive and strong impact on SCP variables. Therefore, according to the results we can claim that in SCRQ criteria, interdependence and co-operation, and in SCP criteria, delivery and quality performance have the most impact on creating a meaningful relationship. Also, for CCA validity, we used sensitivity analysis on independent variables. For this validation, we eliminate one of SCRQ variables every time and utilize CCA. Outputs depicted no impression change in construct coefficient of variables. So we assured that data were valid.

6. Summary and Concluding Remarks

This research intended to investigate the relationship between SCRQ and SCP by using CCA in supply chain of SAIPA Company. For this investigation, first we studied in hand literature and extracted impressive criteria on SCRQ and SCP. Then we devised a questionnaire and distributed it to experts and professionals in SAIPA Company and its related suppliers. At the end, we analyzed output from questionnaires by utilizing CCA. According to research findings, there is a meaningful relationship between SCRQ criteria and SCP criteria and SCRQ criteria have a positive effect on SCP criteria. In 130

SCRQ criteria, interdependence and co-operation, and in SCP criteria, delivery performance and quality performance have the most impact on creating a meaningful relationship. Obtained results in this research is in a same direction in some aspects with other findings in different studies. For example, our results are supporting Fynes et al. (2005a) empirical studies results that showed Interdependence is a very impressive aspect in SC. In addition Su et al. (2008), stated that main attribute of a relationship in supply chain is two sided cooperation. Having a relationship based on strong and long term cooperation is so useful for supply chain because of dependency on external sources and uncertainty in demand and supply. They believed that co-operation has a meaningful impact on B2B, especially on long term behaviors of a relationship. Findings in this research are increasing our knowledge about relationship between SCRQ and SCP. For future studies we suggest more empirical studies in different companies supply chain. Also we suggest that researchers consider relationships between SCRQ and SCP in Automotive industry with investigating key elements in supply chain environment (like supply, demand, and technology uncertainty).

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Appendix A.
Respondents are asked to rate the extent or degree of current practice of the following items on a fivepoint Likert scale with 1=strongly disagree to 5=strongly agree. Communication (Fynes et al., 2005a; Fynes et al., 2005b and Su et al., 2008) CM1in this relationship, any information that might help the other party will be provided for them timely and forwardly. CM2exchange of information in this relationship takes place informally, and not only according to a per-specified agreement. CM3both parties keep each other informed about events or changes that may affect the other party. CM4both parties in the relationship will provide proprietary information if it can help the other party. Cooperation (Fynes et al., 2005a; Fynes et al., 2005b;Woo and Ennew, 2004, Su et al., 2008) CO1we cooperate extensively with this supplier with respect to product design. CO2we cooperate extensively with this supplier with respect to process design CO3we cooperate extensively with this supplier with respect to forecasting and production planning. CO4 We co-operate extensively with this customer with respect to quality practices. Adaptation (Fynes et al., 2005a; Woo and Ennew, 2004 and Su et al., 2008) A1gearing up to deal with this supplier requires highly specialized tools and equipment. A2we have made significant investments in tooling and equipment that are dedicated to our relationship with this supplier. A3our production system has been tailored to meet the requirement of this supplier. A4this supplier offers us new technical solutions timely when conditions change. Trust (Fynes et al., 2005a; Fynes et al., 2005b and Su et al., 2008) T1based on your past and present experience, how would you characterize the level of trust your firm has in its working relationship with this supplier? T2we feel that this supplier can be counted on to help us. T3we feel that we can trust this supplier completely. T4this supplier has a high level of integrity. 133

Atmosphere (Woo and Ennew, 2004 and Su et al., 2008) AT1I consider the general atmosphere surrounding the working relationship with this supplier as very harmonious. AT2I regard the overall relationship with this supplier as very close. AT3I believe mutual expectations for the project have been established with this supplier to a greater extent. Interdependence (Heide and John, 1988; Frazier and Rody, 1991 and Fynes et al., 2005a) I1- It would be difficult for our company to find a new customer for this product if we loose this business. I2- Our firm relies heavily on this customer to achieve our business objectives. I3- It would be difficult for this customer to find an alternative supplier to us. I4- This customer relies heavily on us to achieve its own business objectives. Commitment (Morgan and Hunt, 1994 and Fynes et al., 2005a) C1- The relationship that our firm has with this customer deserves our maximum effort to maintain. C2- The relationship that we have with this customer is something we intend to maintain indefinitely. C3- The relationship that our firm has with this customer is something we are very committed to. Quality performance (customer satisfaction) (Voss and Blackmon, 1994 and Fynes et al., 2008) PQ1- Frequency of customer complaints. PQ2- Adequacy of customer complaint tracking/feedback systems. Delivery performance (Choi and Eboch, 1998 and Fynes et al., 2008) DP1- Speed of delivery relative to competitors. DP2- Percentage of orders delivered on-time. Cost performance (Fynes and Voss, 2001 and Fynes et al., 2008) CP1- Unit cost of product relative to competitors. CP2- Unit cost of product over life cycle. Flexibility performance (Dixon, 1992 and Fynes et al., 2008) FP1- Volume flexibility. FP2- Variety (product line) flexibility.

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