Green supplier development: What’s in it for you,the buyer?

Greening suppliers, or cultivating environmental responsibility throughout the supply chain, has become an important strategic issue for firms. While various approaches exist, green supplier development—that is, helping and collaborating with your suppliers to reduce their negative environmental impact—is a key method that can produce significant gains for both parties at multiple levels. Yet the benefits have not been sufficiently discussed and may therefore appear nebulous for managers. Focusing particularly on “What’s in it for you, the buyer?” this article describes benefits at the intrafirm, interfirm, and market levels. Barriers to the realization of the benefits are also discussed, providing managerial guidance on supplier prioritization for green supplier development.     

The Effects of the Economic Downturn on Interdependent Buyer–Supplier Relationships

The management of strategic buyer–supplier relationships is a critical concern for sourcing managers. The selection of key suppliers and how relationships with these suppliers are managed and incentivized can dramatically affect the buying company's performance. While the extant literature focusing on industrial buyer–supplier relationships is significant, the severe economic downturn beginning in 2008 tested buyer–supplier relationships in unprecedented ways, yielding new insights. The research presented in this paper uses dyadic cases to investigate transformations within industrial relationships during the economic downturn. Propositions are formulated that focus on why and how firms responded to the downturn. Three primary types of relationships are identified. The results indicate variation in the ways buying companies managed their key supplier relationships during the downturn: some firms behaved more cooperatively and found ways to jointly confront the effects of the downturn, while others responded by behaving competitively to maximize their individual outcomes. The results further suggest that researchers need to revisit existing models of relationship development and dissolution to understand how these relationships evolve or devolve. The research also raises questions about the value of physical and human asset specificity, and social investments in curtailing opportunistic behavior in times of severe economic stress.     

“Do frogs jump as a result of privatisation?” Impact of privatisation on buyer–supplier relationships

As the cornerstone of the Conservative Government between 1979 and 1996, privatisation has undoubtedly had an enormous impact on the UK economy. On the whole, privatised companies have improved their performance in an ever increasing competitive environment by focusing on, among other things, a drive to reduce costs through bought-out goods and services. Research into Japanese companies, meanwhile, has highlighted the key role that supplier relationships play in their success. It has stressed the advantages of co-operative over adversarial relationships with suppliers, and evidence shows that an increasing number of Western companies are adopting this practice. This has raised the profile of purchasing in these companies with a change towards `better practice’ and improved management of the supplier base. From this new research a model of Feature and Construct Evaluation and Aggregation (FCEA) has been developed, in the search for a link to support the proposition that privatisation has an influence on purchasing strategies concerning supplier relationships. The research has shown that only a very limited link exists. Whilst Purchasing as an activity has increased in its importance and control, it has not become strategic. Purchasing strategies have not evolved or supported the business strategy as a result of privatisation, nor does privatisation encourage the development of purchasing strategies towards closer relationships with suppliers. This is compounded by the EC Directives that reflect an `open tender’ model of procurement, particularly evident in the emphasis on formal competitive tendering procedures and maintaining an `arms-length’ relationship with suppliers.     

Disruptions in Supply Networks: A Probabilistic Risk Assessment Approach

Supply disruptions are attracting growing attention. Even in geographically, politically and economically stable locations, companies are exposed to disruptions, because they depend on their suppliers and suppliers’ suppliers. The analysis of these disruptions helps mitigate risks: for example, instead of relying on local measures such as safety stock or insurance, a company can introduce new supply contracts or backup risky suppliers. In this article, we analyze risks caused by supplier disruptions by introducing concepts from probabilistic risk assessment (PRA), which is a widely employed methodology for the risk analysis of complex engineering systems. We apply PRA to examine simple networks such as triads analytically, and use simulation to analyze disruption risks in random networks of realistic size. We also illustrate how PRA can support strategic decisions such as whether or not to use single or multiple suppliers; which suppliers are more risky than others; and what impacts the complexity of the supply base has on the reliability of the supplier network.     

The dyadic capabilities concept: examining the processes of key supplier involvement in collaborative product development

The increased use of suppliers in the new product development process has important implications for the strategic performance of organisations. In this paper an analysis of supplier collaboration in the development process is deployed to support the development of a dyadic (or two-level) capabilities analysis of the strategic management of the innovation process. By setting an organisation's competencies within the context of their customer or supplier interactions this paper supports the view posited by Ford et al. (1986) that interaction defines the value of assets and resources. In a study of collaboration in the UK auto industry, it was found that both operational and relational competences are critical factors in the performance of the new product development process. Thus, the ability of customers and suppliers to develop both structured and ad hoc processes of interaction is shown to be important to the development process from early supplier selection process.     

Supply base rationalisation: myth or reality?

Companies throughout the UK have been claiming for some time that in order to become more competitive and flexible, and to reduce costs, they must reduce the size of their supplier bases. In recent years, extensive supply base reduction strategies have been witnessed in a wide range of firms in differing sectors. This article seeks to explore whether these strategies are truly being followed, how they have been implemented, and how successful they have been. The author finds that whilst companies have significantly reduced the number of their suppliers, such strategies have not led to the rewards that were first envisaged. It appears that this is mainly due to a haphazard approach to rationalisation, a focus on transaction cost information, and poor management of highly dependent relationships. In addition, there is now evidence that some firms are actually increasing the size of their supply bases once more, to mitigate these problems. The research found that whilst companies claimed that they had reduced their supply bases, the reality was that they still had the same numbers of suppliers — they had delegated control to `first-tier’ suppliers as opposed to reducing the supply base. This article concludes that supply base delegation may be a useful strategy; it allows firms to focus on fewer suppliers, build high-dependency relationships, share technological advantages and spend time and effort on improving fewer relationships, thus leading to more efficient resource utilisation and consequent cost reduction. However, this process needs to be conducted within a strategic framework.     

A checklist for managers to enhance influencer partnerships and avoid potential pitfalls

Influencer marketing continues to be popular with marketing managers because of its effectiveness as a marketing tactic for raising brand awareness and ROI. To date, much of the literature on influencer marketing focused on its benefits, but it also bears potential risks: not all influencer marketing experiences are positive. While influencer marketing is still emerging in the digital space, managers should not forgo supplier managerial principles when hiring influencers. This article provides a checklist to help managers navigate this marketing tactic and avoid potential mistakes by encouraging the same due diligence they would with other suppliers. The checklist asks nine questions during the life cycle of an influencer relationship—including selection, performance and contract management, and reputation management—and is corroborated by the marketing literature but should be applied by managers. To demonstrate this, several case studies were examined in which managers should have considered supplier management when engaging with influencers. By employing the checklist amid influencing marketing efforts, managers can avoid the mistakes identified in the case studies.     

Multimarket Contact and the Use of Power in Buyer–Supplier Relationships

Buyers and suppliers often have multiple business relationships with each other across different geographical and product markets, forming a potentially complex web of connections. What happens between the firms in one geographical or product market may influence their interactions in others. Prior research in strategic management has found that similar multimarket contact in horizontal relationships between competitors has important consequences for the firms’ use of market power. However, the consequences of multimarket contact in vertical buyer–supplier relationships remain unexplored. Building on resource‐advantage theory, this study proposes that multimarket contact between buyers and suppliers is linked to their respective propensity to use three types of mediated power in their relationships (i.e., reward, coercion, and legal legitimate) and that the effects of multimarket contact differ between buyers and suppliers. A vignette study with 143 purchasing managers and 137 business‐to‐business sales managers tests the developed hypotheses. The findings show that a higher level of multimarket contact encourages suppliers to use legal legitimate power to a greater extent and encourages buyers to use reward power to a greater extent but legal legitimate power to a lesser extent.     

Justice in triad: Revisiting supplier involvement in new product development

Recognizing the importance of involving suppliers in the new product development (NPD) process, extensive studies have examined this issue at a buyer–supplier dyadic level. However, how supplier involvement leads to better NPD performance is not clearly explained. Additionally, extending the dyadic relationships to triadic relationships and addressing how to manage the two competing suppliers with fair conduct remains unexplored. To answer these questions, this study developed a conceptual model theorizing the role of supplier involvement, information sharing, and justice in the NPD process within a buyer–supplier–supplier triadic relationship. Based on survey data collected from 200 U.S. firms, Structural Equation Modeling is used to test the hypothesis. The results first confirmed the criticality of involving both primary and secondary suppliers during NPD. Second, the positive effect of triadic supplier involvement on innovation performance is fully mediated by information sharing. Finally, this study explored the different roles of procedural justice and distributive justice; the results confirmed that procedural justice acts as a moderator for the relationship between triadic supplier involvement and information sharing, whereas distributive justice moderates the effect between information sharing and innovation performance. Our findings contribute to the literature of triadic supplier involvement-new product development and relationship management. Accordingly, these findings highlight key implications for managers and policymakers.     

Supplier diversity and supply chain management: A strategic approach

Although purchasing trends are moving toward consolidation, a strong economic argument can be made for supplier diversity. In fact, most Fortune 500 companies currently employ supplier diversity initiatives. If integrated into the overall corporate strategy, supplier diversity can become a source of competitive advantage for corporations. In order for such integration to successfully occur, however, the initiative must have top management commitment, a supportive culture, and the availability of champions to promote the proposal. Minority suppliers, in turn, need to realize that their failure or success in this highly competitive environment depends on their ability to continually develop overall competences, to be learning organizations, and to become increasingly attuned to and adept at building strategic alliances amongst themselves and with their corporate customers. In these respects, they can make use of intermediary organizations (such as local supplier councils) to improve their competences and competitive edge.     

Understanding B2B Supplier Selection Relationships: The Case of Taiwan Agribusinesses

Purpose: This article seeks to investigate the factors impacting the selection of suppliers in the Taiwan agribusiness sector and explore the relative importance of these factors. In addition, it explores the potential differences based on the organization's size and stakeholders (i.e., buyer versus supplier and management versus operational).

Methodology/Approach: This study is exploratory in nature and involves a two-stage process. In the first stage, in-depth interviews were conducted with 10 agribusiness professionals in Taiwan to determine the relevance of the current literature about the criteria used in the selection of suppliers in the Taiwan agribusiness industry. The second stage involved 16 case studies with 32 interviews, using information gathered from the first stage.

Findings: Findings revealed that the support of the 22 selection criteria presented in the preliminary framework was important to influencing an organization's selection of suppliers in the Taiwan agribusiness industry. The findings suggest that Taiwan agribusiness buyers consider the financial position of the suppliers and the quality of their managerial teams as critically important in the supplier selection process. There was little indication that the desire for business, geographical location, and repair service were regarded as important criteria for selecting suppliers.

Research Implications/Limitations: The findings of this research have added new insights to the existing literature of B2B supplier selection criteria with the identification of two additional criteria (innovativeness and willingness to cooperate). The exploratory nature of this study and the initial development of a framework of supplier selection within the context of the Taiwan agribusiness industry had constrained the applicability of the findings to other markets and industries.

Practical Implications: The findings highlighted a list of important selection criteria that agribusiness managers can consider during their supplier selection process. In addition, the findings can assist agribusiness managers from supplying organizations to build on their organizations' strengths and capabilities in meeting those important supplier selection criteria so that they can stay ahead in the increasingly competitive agribusiness industry.

Originality/Value/Contribution: By focusing on the agribusiness sector, this study provides insights into a much neglected industry where supplier selection is a crucial issue to many agribusinesses, particularly from the perspective of major buyers in value-adding agribusiness enterprises.     

THE RELATIONSHIP BETWEEN PURCHASING AND SUPPLY MANAGEMENT'S PERCEIVED VALUE AND PARTICIPATION IN STRATEGIC SUPPLIER COST MANAGEMENT ACTIVITIES

As firms have placed more emphasis on their core competencies and outsourced production and services to suppliers, effective cost management of purchases has become a critical factor in achieving corporate success. The Purchasing and Supply Management (PSM) function is generally responsible for obtaining goods and services from outside suppliers. Techniques such as total cost of ownership, supplier cost structure analysis, and target costing have become important tools for PSM to manage inbound supply costs. Results of a survey indicate that the perceptions of PSM by peer functions and top management, in terms of PSM's importance and accountability, are related to implementing the strategic cost management activities of total cost of ownership, supplier cost structure analysis, and target costing.     

INFORMATION SUPPORT FOR ALLIANCES: PERFORMANCE IMPLICATIONS

It is generally acknowledged that information exchange plays an important role in strategic alliances. However, little is known with respect to the perceptions each alliance partner has concerning information exchange as well as how to measure these perceptions. Key managers and executives in the food and health and personal care industries in North America participated in a mail survey to investigate these phenomena. The survey approach used a dyadic research design to identify the key elements of information exchange that impact alliance satisfaction. Based on the alliance partner's channel position as a buyer (manufacturer) or supplier (product or service supplier), the similarities and differences in perspective and subsequent managerial implications are analyzed and discussed.     

The Impact of Key Retail Accounts on Supplier Performance: A Collaborative Perspective of Resource Dependency Theory

Existing literature suggests that the increasing concentration in the retail industry is allowing powerful retailers to exploit their weaker suppliers, which causes the suppliers’ performance to suffer. This study takes a collaborative perspective of resource dependency theory and suggests that when suppliers engage in supply chain relationships with key retail account (KRA) customers, their performance may improve, depending on the varying levels of the supplier's and KRAs’ market shares. The empirical analysis of data from two large retailers, Wal-Mart and Target, and a broad cross-section of their suppliers provides ample support for most of the hypotheses set forth in this paper: Suppliers that depend on KRAs for a significant share of their total revenues relinquish some of their leverage in the marketplace, but as the KRAs gain market share, their suppliers’ performance tends to increase. Cumulatively, these results provide evidence of collaborative supplier–KRA relationships, such that a supplier's dependency on KRAs may positively affect supplier performance. This finding supports a more positive, symbiotic view of dependency, resulting in important implications for key account management, supply chain management, and retail research and practice.     

Innovation as a determinant of suppliers’ roles and performances: an empirical study in the food machinery industry

The basic premise of this study is that suppliers, in order to compete successfully in the marketplace, have to develop certain innovative capabilities that, in turn, depend on the type of relationship that is established with customers (in other words, the strategic role assumed by the supplier in the supply chain). Based on a study of 198 suppliers operating in the food packaging machinery industry, structural equation modelling has revealed that customers actually assign suppliers different roles and give them varying levels of responsibility in the product development and manufacturing stages. These roles are correlated to the supplier's distinctive innovation capabilities. Clustering analysis is used to divide the suppliers into homogeneous groups. Innovative capabilities are not only associated with traditional competencies in R&D and product/process innovation but also in supportive capabilities in the form of absorptive capacity, technological scanning, innovation-oriented culture, skills and know-how of individuals and managerial practices. The impact of different innovative capabilities (both technological and managerial) on critical performance factors such as price, quality, time and flexibility is measured for each type of supplier in turn. The research findings lend support to the hypothesis that the level of investment in technology and the acquisition of specific managerial capabilities are, to a large extent, a determinant of supplier–customer interdependence.     

Strategic and Operational Determinants of Relationship Outcomes With New Venture Suppliers

While the vast majority of the supplier selection and development literature has focused on relationships between mature, established firms, significantly less attention has been paid to relationships between established firms and new, entrepreneurial ventures. This study addresses this important topic and, using an interdisciplinary lens, investigates the question of how established buying firms can work with new ventures to achieve desired relationship outcomes. Drawing on the literature from the disciplines of entrepreneurship and supply chain management, we propose a theoretical model that links buying firms' strategic orientation in supplier selection (innovation and cost in strategic supplier selection) and operational approach in supplier development (direct and indirect development of new venture suppliers) with new venture‐specific relationship outcomes (purchasing volume and realized innovations). The model's predictions are tested on cross‐sectional survey data from 136 buying firms. Our results contribute to the emerging research stream at the supply chain management–entrepreneurship interface and enhance the understanding of relationships between established firms and new ventures.     

Buyer/supplier partnering in British industry: The automotive and telecommunications sectors

Practitioners and academics in the fields of marketing and purchasing management share an interest in the effective management of inter‐firm buyer‐seller relationships. Buyer/supplier partnering has been advocated as an effective approach to the management of key customer or supplier relationships. Within both the automotive and telecommunications sectors of the British economy there is intense interest among major buying organisations in the development of durable partnerships with key suppliers. However, within both industries the major UK and American owned firms have to operate under the shadow of traditionally antagonistic relations with suppliers. The current state of buyer/supplier partnering within the two industries is evaluated within this historical context, and the key problem identified is the need to overcome antagonism within the inter‐organisational culture. The costs and benefits of partnering approaches to both marketing and purchasing are discussed, and implications for marketing managers seeking to develop partnerships with major customer organisations are outlined.     

Supplier Role Conflict: An Investigation of Its Relational Implications and Impact on Supplier Accommodation

Existing research on supply chain relationships suggests that one of the underlying tensions between supply chain partners is that of opposing perspectives and goals in the customer?supplier relationship. In today's business world with requirements in constant flux, suppliers are often asked to accommodate “special” requests made by their customers, not part of the contractual agreement. Suppliers frequently fill requests to protect the relationship with the customer, even if they fall outside of what they consider their role as a supplier. Issues of supplier role conflict emerge when customers and suppliers have different views of what the supplier's role should entail. There is little research examining the potential for supplier role conflict in supply chains. Specifically, this research draws on literature from multiple disciplines to consider supplier role conflict that may stem from accommodation and the impact of this role conflict and supplier accommodation on the supply chain relationship and future accommodation behavior. Hypotheses are tested using two scenario‐based experiments. Results suggest that supplier adaptation and flexibility both have positive relational effects. If suppliers perceive accommodation requests as outside of their contracted role, supplier role conflict can have detrimental effects on the supplier's relationship perceptions and their willingness for future accommodation.     

Communication Costs and the Boundaries of the Firm

Much has been written about where the boundaries of the firm are drawn, but little about what occurs at the boundaries themselves. When a firm subcontracts, does it inform its suppliers fully of what it requires, or is it willing to accept what they have available? In practice firms often engage in a dialogue, or conversation, with their suppliers, in which at first they set out their general requirements, and only when the supplier reports back on how these can be met are their more specific requirements set out. This paper models such conversations as a rational response to communication costs. The model is used to examine the impact of new information technology, such as CAD/CAM, on the conduct of subcontracting. It can also be used to examine its impact on the marketing activities of firms. The technique of analysis, which is based on the economic theory of teams, has more general applications too. It can be used to model all the forms of dialogue involved in the processes of coordination both within and between firms.     

Exploring Supply Managers' Intrapreneurial Ability and Relationship Quality

This article examined the degree to which a supply manager's intrapreneurial ability influences the quality of individual-level relationships with internal customers and the supplier's account executive. The moderating influence of the buyer's firm-level commitment to the supplier and how these relationships subsequently impact supplier performance were explored. The study assessed the supply manager's intrapreneurial ability using survey data gathered from 110 supply managers across a variety of industries. In key supplier relationships, a supply manager's intrapreneurial ability positively influences the quality of internal and external relationships. The firm's commitment to the supplier weakens the relationship between intrapreneurial ability and relationship quality. The findings highlight the value of individual skills to enhance relationships The ability to behave intrapreneurially shapes the quality of internal and supplier relationships. However, only the supply manager's relationship with the supplier's account executive is related to supplier performance. By examining the impact of intrapreneurial ability on individual-level relationships with internal customers and supplier's account executive, a more comprehensive view of business-to-business relationship management in the supply chain is gained.