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The purpose of the paper is to examine the impact of supply chain management (SCM) on the HRM practice of suppliers. The paper argues that the performance requirement in an SCM system requires that suppliers develop specific HRM practices.

A structured interview was used to collect the data from seven companies.

This paper found evidence to suggest that impact of SCM on the HRM practice of local suppliers is related to the extent of linkage the customers develop with their suppliers.

This paper relied on an examination of seven companies. This limits the generalizability of its findings.

The findings of this paper suggest that a successful supplier‐customer relationship is dependent on the suppliers developing specific HRM practices that will enable them to fulfill customer's requirements.

This paper is probably the first attempt to examine how SCM affects the HRM practice of suppliers.

This study examines the variations in HRM practice among Malaysian manufacturing firms. A typology of HRM practices is first identified, management expectations towards the HRM function and the performance gap of the HR departments are then examined. The findings obtained are then compared with various theoretical models. A comparison with the empirical finding of a US study is also made. Further, the implications of the findings of this study are examined. Finally, a number of suggestions are proposed to improve HRM practice.