Purchasing strategy among manufacturing in the southern region of Malaysia

Abstract

Purchasing plays an important role in manufacturing firm especially to the top management to ensure the continuity of supply to meet demands. A systematic and good purchasing olan figes positive impact in many ways. In RMK8 (eighth Malaysia Plan), government has give more attention to manufacturing industry in contributing sountry income. There are basically two purchasing strategies-single sourcing and multiple sourcing strategies. The study focuses on how the strategies are adopted and reasons for adopting one over the other. Besides, this study also looks at hte purchasing corporate planning strategy. There are two distinguishing strategies that can be discerned from the literature. One is the traditional approach whereby buyers use multiple sources for their material supply and the other on partnership approach shere buyers establish a cooperative relationship with a single source of supply. The study uses mail questionnaire survey to obtain te desired data concentrated among 42 manufacturing firms in Senai and Tebrau industrial areas. The results form the analysis indicated that the respondents select their suppliers based on competitive bidding and the majority of them apply both single and multiple sourcing. Whether the manufacturing firms chose single sourcing or multiple sourcing strategies, the most important things between that manufacturing firm and their suppiers are good relationship, cooperation and understanding each other.