Background: The globalization of markets, competition in the market place, shareholder activism has compelled firms to rethink their way of doing business. In today’s world stakeholders are placing much emphasis on supplier relationships given that the survival of firms depends on the type of relationship that exists between the supplier and the buying firm. The maintenance of supplier relationships is a complex task due to differences in interest and the opportunistic behaviour which may be on the part of the supplier or the buyer. For this reason, firms have to look out for supplier relationships that can improve their business performance and enhance their competitive advantage. Purpose:     The purpose of the study was to investigate the relationship that exists between medical devices manufacturers in Sweden and their key suppliers, and the reasons for establishing relationships. The authors were also interested in knowing how this relationship ultimately leads to improved business performance. Method: The authors used positivist perspective and a deductive approach for this thesis. The sampled firms in this study are Arcoma AB, Baxter and Cellavision and a convenience sampling method was used in selecting the companies. The empirical data for this study was collected through interviews with senior management personnel of the three companies whose head offices are located Lund and Växjö in Sweden. Results, conclusions: The supplier relationships established by Arcoma, Baxter and Cellavision, and their key suppliers was found to be collaborative. The quests to improve on quality, reduce cost and increase the responsiveness of the supply chain are some of the reasons why firms establish collaborative relationships. Establishing collaborative relationships with key suppliers leads to improved operational and financial business performance. Improvements in operational business performance could be in the form of reduction in defects, improved compliance with quality standards, and improvement in delivery reliability and reduced lead times. The benefits to the firms in terms of financial performance stems from cost reduction and the offering of competitive prices in the marketplace which leads to increased market share and revenue expansion.

The medical device manufacturing industry has a deficiency in determining how to improve supplier performance for the components and systems they purchase. Many complex medical devices require components from superb suppliers. But how does a medical device manufacturer (MDM) impartially assess supplier performance to know which suppliers to continuing with (or even boost purchase volumes) and which suppliers they should exit? This study describes which supplier-specific metrics are most important to medical device manufacturers (MDMs) so they can utilize this supplier performance scorecard backed by real-world inputs. This research will focus on five categories to measure MDM supplier performance (Quality, Price, Delivery, Customer Service, and Partnership) across twenty-three (23) metrics. Because this is a focus of MDM supplier performance, we are not focusing on analysis of device sales to the final customer (e.g., distributors or group purchasing organizations {GPO}). The study will follow a framework including research analysis of supplier performance management in other industries, methods to attain data from MDMs via survey, results and analysis of the data, conclusions, and an easily understandable MDM supplier performance scorecard. In the survey, 135 MDM professionals replied when asked to rate twenty-three (23) supplier performance metrics, across five (5) categories aggregated from nine (9) different industries. The survey yielded a myriad of results including, weighting factors of each of the metrics, and those data results were used to compile an MDM supplier performance scorecard utilizing real-world feedback. The analysis revealed the ratings of importance of the categories as: Quality (43%), Delivery (24%), Customer Service (4%), Partnership (13%), Price (8%) and associated weights for the twenty-three (23) metrics that matter most to an MDM when creating a performance scorecard for their supplier base. Three contributions that this research will add to the body of knowledge: An in-depth review of supplier performance across many different industries (i.e., non-healthcare and healthcare) for contrasting/comparing evidence. A detailed MDM survey and statistical analysis on the topic of supplier performance management. An easily understandable and useable MDM supplier performance scorecard (via MS Excel) for MDM supply chain and/or operations users and/or managers.