Winning the competition for supplier resources: The role of preferential resource allocation from suppliers

The role of strategic collaborations and relational capital in enhancing product performance – a moderated-mediated model

Purpose

The purpose of this paper is to test the moderated-mediated model using a dataset drawn from 204 manufacturing firms in Australia, and Hayes' PROCESS macro software was used for analyzing the research model.

Design/methodology/approach

This study examines how firms can leverage the strategic value of their key supplier for improving their product performance by developing strategic collaborations with the key supplier as a mediating factor. Furthermore, it also seeks to understand the role that commitment plays in strategic relationships by testing how the mediating role of strategic collaboration is moderated by the level of buyer-suppliers relational capital.

Findings

The findings show that strategic collaborations mediate the relationship between the strategic value of key supplier and buyer's product performance, and the mediating effect is moderated by the relational capital between the buyer and the key supplier in such a way that the stronger the relational capital the stronger the indirect effect of strategic value of key supplier on buyer's product performance.

Practical implications

The findings show that firms could derive significant benefits from the strategic value of their key supplier in improving their product performance. However, the benefits can only be realized if firms can build successful strategic collaborations in the first place. At the same time, this study also demonstrates the importance of relational capital in terms of commitment and trust with the key supplier that influences the effectiveness of strategic collaborations in realizing the outcome of the collaborations.

Originality/value

This study addresses the gap in the literature by disentangling the complex relationship between a key supplier's strategic value and a buyer's product performance and the role that both collaboration and relational capital play in this relationship. By integrating strategic collaborations and relational capital of buyer-supplier relationships, this study not only confirms the links by testing key supplier's strategic value, strategic collaboration and product performance, but also extends the previous studies by incorporating the moderating role of relational capital as a contingent factor.

INNOVATING WITH DOMINANT SUPPLIERS: LESSONS FROM THE RACE FOR LASER LIGHT

Traditionally, manufacturers could usually choose from several suppliers who would be more than willing to engage in innovation processes with them. However, more often the situation arises that a supplier has a dominant position because of a clear leadership or even exclusivity in a certain technology. How should the buying companies handle such situations when a supplier can choose the customer to collaborate with, rather than cueing in front of the customer’s door? This paper focuses on how a buying company may best handle this situation of innovating with dominant suppliers. The methodology used is a case study that compares, from an original equipment manufacturer’s perspective, two implemented supplier innovations with different expirations — a success case and a failure.

Findings lead to three main propositions: First, firms may benefit from carefully analysing and designing the buyer–supplier constellation in innovation processes and not only the quality of the innovation. Drawing back on attractiveness theory grounded in social exchange theory may provide clues on how to do so. Second, in case of a dominant supplier situation, traditional innovation management processes may fail and need to be amended by a dedicated innovation process with a different order of steps. In the case of supplier dominance, it is essential to first analyse the supplier constellation, and then make the decision for the innovation path to follow — and not the other way around. Third, in the fight for getting access to a supplier’s innovation, a speed-up process with the buying company may be a tool for outperforming other buyers competing for the same supplier.

Achieving supply chain excellence through supplier management

Purpose

The purpose of this paper is to develop a supplier selection and management program to improve overall supplier performance.

Design/methodology/approach

Supplier performance is measured in terms of quality and delivery within a fast moving consumer goods (FMCG) business of a multinational company based in Thailand using a case study methodology. The quality and delivery related data were collected from daily deliveries at the manufacturing plant both before and after implementing the supplier management program.

Findings

Findings of the study suggest that the selection of suppliers based on their performance is important for manufacturing firms. Moreover, the supplier selection and management program can contribute effectively to improving suppliers’ performance.

Research limitations/implications

This case study has been conducted based on a single company within the FMCG industry. Hence, it limits the generalizability of the findings across industries.

Practical implications

The study provides a real-life tool for practitioners to learn about the importance of strategic decision-making process pertaining to the supplier selection and management program.

Social implications

This study demonstrates that through a transparent supplier evaluation process, the firms can develop trust and long-term relationship with their suppliers for pursuing the goals of product development and innovation.

Originality/value

Implementing a supplier management system is a critical step in enhancing an organization’s overall competitiveness. To develop an effective supplier management system firms must have objective measures and share those with their suppliers. Developing metrics for suppliers’ evaluation is the key to achieving continuous improvement as evidenced in this case.

Exploration and exploitation within supply networks

Purpose

The purpose of this paper is to introduce and define the concept of purchasing ambidexterity in terms of two dimensions: balance dimension and combined dimension. The study proceeds to empirically examine the multiple performance effects generated for the buying firm and its key suppliers.

Design/methodology/approach

Ambidexterity theory informs the authors’ conceptual model. To test the hypotheses, the authors collected survey data from 95 purchasing functions of medium and large European firms and applied various estimation techniques.

Findings

This research indicates that ambidexterity substantially varies across purchasing functions. Further, it discovers that a purchasing function’s ability to advance the combined magnitude of exploratory and exploitative activities represents an essential determinant of supplier efficiency, supplier product innovation, and buyer financial performance. Notably, this research also discovers that balancing the magnitudes of exploratory and exploitative activities on a relative basis produces negative effects on the innovativeness of the supply network.

Originality/value

Although ambidexterity theory has been applied to supply chain management, limited attention has been dedicated to purchasing ambidexterity. This gap led us to study how purchasing impacts the competitiveness of the buying firm and of its supply network by balancing and combining exploratory and exploitative activities. This research is the first to advance the notion of purchasing ambidexterity, unpack its underlying dimensions, and examine its multiple performance implications. Such a conceptual and empirical development presents new perspectives on how purchasing can help the buying firm and its supply network to strengthen their competitiveness.

Linkages between firm innovation strategy, suppliers, product innovation, and business performance

Purpose

The purpose of this paper is to use resource dependence theory to hypothesize that a buyer’s innovation strategy enhances supplier innovation focus and a buyer-supplier relationship that supports product innovation. These in turn positively impact buyer product innovation outcomes and business performance. Moreover, it is argued that the buyer-supplier relationship positively moderates the impact of supplier innovation focus on product innovation.

Design/methodology/approach

Structural equation modeling and hierarchical linear regression are used to test hypotheses.

Findings

The results support all hypotheses and suggest that company (buyer) age and variables related to buyer engagement with international markets directly influence performance. The results also indicate that the buyer-supplier relationship does not moderate the relationship between innovation strategy and innovation performance.

Research limitations/implications

This study demonstrates that how a firm builds the conditions to effectively leverage the complementary resources and capabilities of suppliers directly influence innovation outcomes and business performance.

Practical implications

An important factor in firms achieving their product innovation goals is the selection and management of suppliers that are strategically aligned with regard to innovation. While managers need to develop internal innovation capabilities, partnering with like-minded organizations, and creating conditions for effective cooperation are key drivers of innovation outcomes.

Originality/value

In contrast to prior research that has examined operational issues, this study shows how the strategic alignment of buyers and suppliers with regard to innovation is an antecedent of product innovation outcomes. Moreover, it adds to a limited literature on supply chain management practices in emerging markets.