Key issues in global supply base management

Developing effective business relationships with suppliers is hard work, especially when suppliers are located in different parts of the globe. Doing business with a supplier in China entails a very different set of fundamental elements than with one in the United States or Europe. As such, managers cannot rely on information systems to conduct business with global suppliers, but in many cases must travel to the location and visit with the supplier face to face to build an effective business relationship. In this article, 11 key issues that buying organizations should consider in their efforts to manage a global supply base are presented. These issues focus on the need for the “human factor” in establishing positive supplier relationships and the development of a high-performing global supply base.     

Temporal dynamics of trust in ongoing inter-organizational relationships

This paper reports the results of a qualitative study undertaken to understand the nature of trust and its consequences for both suppliers and buyers in short term (relatively new) and long term (older/more mature) relationships in inter-organizational contexts. Scholars have recently pointed out the importance of research that investigates the temporal characteristics and dynamics of trust in inter-organizational studies. Our paper responds to this call by indentifying the changing nature of the level of trust as the buyer–supplier relationship matures. Our findings contribute to sparse and conflicting previous research on the relationship between length of partnership and perceptions of trust, types of dark side consequences of trusting relationships, and reasons buyers and suppliers continue or terminate low/no-trust associations. Specifically, we illustrate that buyers and suppliers draw on substantially different metaphors for understanding the nature of trust in long and short term exchange relationships. Suppliers see marked differences in trust with long term versus short term exchange partners, while buyers see little or no difference. Suppliers and buyers also appear to have different conceptions of how trust is nested (or not) within the broader economic and/or personal relationship. Through our inductive model, we elaborate several types of betrayal and disappointment, distinguish several factors that lead suppliers and buyers to stay in relationships with partners they don't trust, and identify key issues that topple untrusting relationships into terminated relationships.     

Corrigendum to “The effect of spatial variables on the economic and environmental performance of bioenergy production chains” [Int. J. Prod. Econ. 131 (2011) 224-233]

Using a knowledge-based perspective, we identify and test the conditions enabling inter-firm learning in the aerospace supply chain. We focus on buyers accessing knowledge from their suppliers. Hypotheses are tested via a cross-sectional survey of supplier relationships of prime contractors in Canada's aerospace industry. The variables identified as having a significant impact on inter-firm learning are as follows: the quality of the buyer–supplier relationship in terms of trust, collaboration, socialization and information sharing; the proprietary links between both firms; and the use of ITC collaboration tools.     

Power,buyer trustworthiness and supplier performance: Evidence from the Armenian dairy sector

The paper presents a Multiple Indicators and MultIple Causes (MIMIC) model for explaining the relationships between buyer-seller power, buyer trustworthiness and supplier satisfaction / performance. The model draws on an organizational supply chain perspective of power and is verified using data relating to dairy farmers’ relationships with their main buyer in Armenia. The analysis indicates that buyers are more trustworthy where there is greater competition for supplies. Buyer trustworthiness is also positively correlated with both the size of a supplier, as well as a supplier being a member of a marketing cooperative. Buyer trustworthiness has a positive impact on suppliers’ satisfaction (regarding their relationship with their main buyer) and enhances the quality and quantity of suppliers’ output.     

Channel relationship and business uncertainty: Evidence from the Hong Kong market

This study examines the dynamics of channel relationships between an end user and multiple suppliers in Hong Kong, a major international logistics hub in Asia. Drawing on the literature on channel relationships, we examine the links between different channel relationship variables and the contingent effect of business uncertainty on the links between these variables and supplier commitment. The results of the study indicate that expected relationship continuity mediates the effects of trust and relationship quality on commitment. Furthermore, the positive effect of trust on commitment is found to be stronger when business uncertainty is high than when business uncertainty is low. As supply chain management is becoming essential for firms to succeed in today's business, industrial marketing managers need to be aware of the dynamics in channel relationships and to better manage their supply chains. The implications of our findings for research and for the practice of channel relationship management are provided.     

Using influence strategies to advance supplier delivery flexibility: The moderating roles of trust and shared vision

This study explores trust and shared vision moderate the relationship between the manufacturer's influence strategies and supplier delivery flexibility. The major components of this study are based on reviews of marketing research that focus on influence strategies and literature regarding supply chain flexibility. The results show that the request strategy has a negative effect on supplier delivery flexibility. The model predicts that trust and shared vision have an asymmetrical effect across recommendations, information exchange, and promises influence strategies. When the relationship contains a highly shared vision, a manufacturer's use of the recommendation influence strongly promotes supplier delivery flexibility, whereas the use of a promise strategy depresses supplier delivery flexibility. In contrast, an information exchange strategy will have a negative effect, but the promise strategy will have a positive effect on supplier delivery flexibility when trust is high. This paper contributes to guidelines for management on how to align their suppliers for delivery flexibility to respond quickly to customer demands.     

The impact of supplier development on buyer competitive advantage: A path analytic model

As manufacturing firms increasingly realize that supplier performance is crucial to their establishing and maintaining competitive advantage, supplier development has been a subject of considerable research in supply chain management. We develop and test a path model to explore how supplier development practices affect buyer-supplier performance from the buying firm's perspective in the context of Hong Kong's electronics industry. The results show that top management, supplier evaluation, and supplier strategic objectives are significant determinants of transaction-specific supplier development, and that buyers that have closer collaborative relationships with suppliers may strengthen their competitive advantage.     

The impact of customer attractiveness and supplier satisfaction on becoming a preferred customer

This paper discusses how a firm can become preferred customer, defined as a particular buying firm to whom the supplier allocates better resources than less preferred buyers. Two concepts play a central role for a firm aiming to become preferred customer: (i) customer attractiveness and (ii) supplier satisfaction. However, the current literature still lacks a clear discussion on the conceptual differences between these constructs and their attributes and is ambiguous with regard to the relationships between the concepts. This study addresses these shortcomings. We examine customer attractiveness and supplier satisfaction as distinct conceptual variables and test how these constructs relate to each other and to preferred customer status. We build upon practitioner input and survey data from 91 suppliers to do so. Our analyses show that the impact of customer attractiveness on preferential resource allocation from suppliers is significantly mediated by supplier satisfaction. These findings expand the current understanding of these concepts. In addition, our findings might help managers better evaluate their relationships with suppliers and align their strategies accordingly to obtain better resources from their suppliers.     

The multiple levels of trust when selecting suppliers – Insights from an automobile manufacturer

In this study, we aim to develop a framework for the concept of trust prior to forming relationships when selecting suppliers. Entering a relationship with a supplier for an extended period requires a certain level of trust in different facets (such as interpersonal relationships, continuous supply, and compatibilities). In situations in which suppliers need to enter into relationships characterized by high uncertainties, such as sourcing for high technology, trust becomes even more important. The question raised is how this ex-ante trust is defined and used during the supplier selection, when the buyer decides to enter into a relationship with a potential supplier. The phenomenon is studied in the automobile industry, which is experiencing a higher level of dependency on suppliers for sensitive, and at times strategic, components. A single case of a major auto manufacturer is studied using 36 interviews. Our findings show that when selecting the supplier with which to enter a relationship, trust manifests itself on multiple levels: interpersonal, organizational, interorganizational, and network. Contrary to some previous suggestions in the literature, we found interrelationships across these levels.     

The impact of sustainable public procurement on supplier management — The case of French public hospitals

In the public sector, procurement managers are now required to comply with new sustainable regulations and to look for suppliers able to provide a sustainable offering. Stating that contracts can only frame part of the interaction and that parties often turn to more negotiated agreements, we investigate whether sustainable expectations within public hospitals could impact supplier management and imply rearrangements between public buyers and private providers. Data were collected from fifteen French hospitals through semi-structured interviews. Findings first highlight the sustainable expectations of public buyers from global key providers, and, second, that sustainable procurement does impact the relationship by creating new rules. Building on these results, managerial implications are suggested.     

The Effects of Supplier Involvement and Knowledge Protection on Product Innovation in Customer–Supplier Relationships: A Study of Global Automotive Suppliers in China

Globalization drives firms to develop product innovation through their global supply chains. While innovations generated by supply channel members, as opposed to individual partners, are playing an increasingly important role in the success of all supply chain partners, there has been limited research on how supply chain relationships cultivate the process of such innovation generation, particularly in emerging markets. Correspondingly, this study explores how multinational suppliers can develop adaptive product innovation to create competitive advantage in emerging markets. Drawing on the knowledge‐based view and transaction cost economics, this study investigates the influence of supplier involvement and other factors on supplier innovation and performance. The results of a survey of 170 multinational automobile suppliers in China provide support for most of the hypotheses. Specifically, supplier involvement in codesign has an inverted U‐shaped relationship with product innovation. Furthermore, knowledge protection, trust, and technological uncertainty are all found to drive greater product innovation. In addition, the institutional environment moderates the effect of product innovation on performance. Overall, this study enhances our understanding of how MNEs can acquire local knowledge and develop adaptive products in emerging markets.     

Examining institutional effects on B2B relationships through the lens of transitioning economies

Our study addresses the limited attention paid to the role of indigenous institutional environments in framing the legitimate forms of governance used to shape buyer-supplier exchanges. Drawing on institutional theory and marketing channel literature, the study suggests that the emphasis in buyer-supplier exchanges on communication modalities and norms has much to do with the effectiveness of legal systems in a buyer's country. Three contexts for legitimacy are conceptualized from an examination of exchanges in developed economies with strong formal institutions and transitioning economies with underdeveloped institutions. Using surveys of US buyers to represent strong formal institutional environments, we conclude that buyers heavily influenced by regulative enforcement place a relatively greater emphasis on formal information sharing in their partnership efforts to build trust and enhance supplier performance. From surveys of buyers in India and China, we conclude that buyers place a relatively greater emphasis on informal information sharing when their legitimacy derives from the endogenously enforced moral codes of their private networks. Finally, surveys administered in Brazil and Russia revealed that buyers in environments pressured by the familial loyalty practices of their private networks place a relatively greater emphasis on the norm of solidarity to build trust in their suppliers.     

Supplier adaptation: A qualitative investigation of customer and supplier perspectives

Differing views and goals in the buyer–supplier dyad can create underlying tension in supply chain relationships. Although research recognizes that adaptation is often expected from both customers and suppliers in exchange relationships, researchers have not adequately explored the long-range relational implications of customer adaptation requests. This research uses data from two qualitative focus groups to examine the interaction of customers and suppliers surrounding adaptation, as prior research has not yet considered how the customer's response to adaptation may change if they are aware of how the supplier actually perceives and evaluates specific adaptation requests. The first focus group included 20 active participants representing both customer and supplier perspectives, while the second focus group included five participants to provide a more in-depth examination of issues that emerged in the first focus group. Results suggest that customers' and suppliers' adaptation expectations differ; each has difficulty recognizing adaptation conflict because of perceived benefits and biases surrounding adaptation. Results suggest several adaptation conflict management behaviors are utilized to minimize its negative impacts on supply chain relationships, including blameshifting, justifying and negotiating techniques. Results suggest that trust can create blind spots in relationships, potentially causing customers and their suppliers to have difficulty recognizing conflict until it deteriorates relationships' foundational trust.     

The value of relational learning in global buyer‐supplier exchanges: a dyadic perspective and test of the pie‐sharing premise

Research in collaborative interorganizational relationships has typically focused on the value of these relationships to a specific supply chain partner. Furthermore, the phenomenon has rarely been explored in a global setting. Using primary data from 126 cross‐border dyads, we investigate the influence of relational learning on the relationship performance of both the buyer and the supplier, testing the contention that both members (1) benefit from relational learning efforts and (2) enjoy equal pieces of the benefits pie. We find that three specific types of relational learning (information sharing, joint sensemaking, and knowledge integration) influence relationship performance, and that these dimensions of relational learning affect supply chain partners in different ways. We draw conclusions regarding the relative value of relational learning for both buyers and suppliers. Copyright © 2011 John Wiley & Sons, Ltd.     

基于供应链的煤炭企业供应商管理研究

煤炭企业的生产特点和物资需求特性,决定了煤炭企业应该进一步改革物资采购模式,完善供应商管理工作。为有效跟踪供应商绩效表现,降低供应链风险,基于供应链管理理论提出目前中国煤炭企业应实施供应商全生命周期管理,并将供应商分类、供应商评价体系和关系管理纳入企业信息化系统建设中,有助于企业实现全方位的供应商关系管理。     

The drivers of customer attractiveness,supplier satisfaction and preferred customer status: A literature review

In this paper, we focus on the preferential treatment of buyers by their suppliers. As there is a lack of detailed information regarding the reasons that suppliers serve some buyers better than others, our research addresses a supplier's evaluation of customers and how this evaluation can be influenced by buyers. To give an overview of the drivers of preferential treatment by suppliers, the provided literature review covers three research fields that are considered crucial to this issue: (i) customer attractiveness, (ii) supplier satisfaction and (iii) preferred customer status. By integrating these research topics, we provide a state-of-the-art analysis and overview of the various drivers of preferential treatment, build a preliminary conceptual model and suggest several directions for future research. The identification of the drivers and the resulting conceptual framework can serve as a stepping stone for additional research in this new field.     

The effect of supplier's market orientation on manufacturer's trust

Recent studies show that manufacturing firms can select suppliers according to suppliers' market-oriented behaviors. Based on market orientation literature and research on inter-firm relationships, a model is developed to examine the impact of supplier's market orientation on manufacturer's trust. The framework is tested using Structural Equation Modeling and the data are from dyadic manufacturer and supplier relationships in U.S. firms. The results show that supplier's market orientation is significantly related to manufacturer's trust, which affects the manufacturer's long-term orientation toward the supplier. Discussions and implications for managers are presented at the end of the article.     

Unpacking value creation and capture in B2B relationships

Although the relationships among different dimensions of value creation, characteristics of dyadic relationships and value concepts are well studied, they have been conceptualized independently and without much linked theorizing. Hence, little is known about how these concepts and their effects interplay with each other. This article takes a configurational approach and investigates how different dimensions of value creation and relationship factors affect value capture. The study draws on an embedded case study encompassing relationships of a focal customer in the financial payments industry with six specialized service suppliers, followed by a Qualitative Comparative Analysis (QCA) of 29 relationship conditions. For both buyers and suppliers, value creation is based on “core” value dimensions, and relationship characteristics, such as power and change in supply strategy. Five different configurations of these constructs represent sufficient conditions to increase value capture, by either negotiating better prices or shifting volume among the parties involved. Focusing on both buyer and supplier perspectives of the same phenomenon, the study increases knowledge on how contextual variables interact in influencing value capture. From a practical perspective, the proposed configurations help managers to choose adequate supply strategies, or better allocate resources according to specific conditions of a business relationship.     

Don't Trust Trust: A Dynamic Approach to Controlling Supplier Involvement in New Product Development

Prior literature stresses the importance for manufacturers to use formal and informal controls to coordinate collaborative new product development activities with suppliers. In doing so, the existence of trust between manufacturers and suppliers is believed to play a key role because it enables manufacturers to reduce investments in formal controls and rely more on less costly informal controls. Manufacturers and suppliers don't suddenly trust each other though: trust typically grows over time as the partners get to know each other. Trust may also decrease if manufacturers overuse formal controls or if suppliers underperform. These fluctuations in trust over the course of supplier–manufacturer relationships complicate the so‐called trust–control nexus and raise important questions about the impact of trust on the efficiency and effectiveness of formal and informal controls as coordination mechanisms. Therefore, this study examines how manufacturers should balance formal and informal controls over time to reap the full benefits of collaborative product development with suppliers. For that purpose, a conceptual and system dynamics model are developed, which incorporate the links among formal and informal controls, trust, and the supplier's development performance. In an empirical validation in the context of the shipbuilding industry, the results reject the notion that manufacturers must lessen formal controls and increase informal controls with trust. Instead, it is most efficient and effective to invest always in formal controls, particularly process control, to coordinate supplier involvement in new product development. These results have important theoretical and managerial implications: Informal controls are not as profitable as expected.     

How does green innovation affect supplier-customer relationships? A study on customer and relationship contingencies

As the demand for eco-friendly products arises, many suppliers have devoted significant effort to green innovation. Prior studies have investigated how green innovation influences product and firm performance; however, its influence on the relationship between suppliers and organizational buyers (customers) is still unknown. Organizational buyers' receptivity to green products is uncertain as they must adjust their current systems to accommodate the new products. As such, understanding how supplier green innovation effort affects the supplier-customer relationship is essential for green innovation success. Using data collected from 196 B2B customers, we find that the relationship between supplier green innovation effort and relational performance depends on several customer- and relationship-level contingencies. Specifically, green innovation benefits a relationship more if customer participation and relational embeddedness are high, or if customer risk aversion and customer-perceived product criticality are low. This research provides valuable guidance for the effective implementation of green innovation.