Conceptual Modelling of Supplier Loyalty and Buyer-Supplier Relationship for Mediation: A Case Study in Plywood Industry

Supplier is a very valuable asset, not only where the company gets the raw materials needed but also sources of information that can help the company. Suppliers can be mutually beneficial partners if the company can work well together. Loyalty from suppliers is an important key in company productivity. Focus on how supplier can be loyal to a manufacture with buyer-supplier relationship as mediation. This study aims to model the important factors in buyer-supplier relationship (BSR) to achieve the supplier loyalty, there are communication, payments, logistics and trust. Sampling are taken from supplier of raw material conducting by using questionnaires as an measurement instrument in the form of several questions distributed to 112 respondents representing each supplier. This research uses component or variance based structural equation modeling where in processing data using partial least square is a method of variance based SEM. The existence of buyer-supplier relationship in the relationship of trust with supplier loyalty gives partial effect and is a connecting variable between both endogenous and exogenous variables. This research can be explained by exogenous variables of 56% (0.564). While endogenous supplier loyalty variables in this study can be explained by exogenous variables of 77% (0.775). The results of the analysis can show how the mediating role carried out by buyer-supplier relationships in communications, payments, logistics, trust and supplier loyalty relationships. From the results of testing the hypothesis shows that of the thirteen hypotheses tested, seven hypotheses were accepted and six hypotheses were rejected.