The moderating effects of supplier portfolio characteristics on the competitive performance impacts of supplier-facing process capabilities

We draw on the interorganizational relationship management literature to examine how contextual characteristics of the supplier portfolio (portfolio concentration, relationship length, and supplier substitutability) moderate the impacts of process alignment and partnering flexibility – two of a firm's key supplier-facing process capabilities to manage supplier relationships – on a product line's competitive performance. Our analysis of survey data on a firm's supplier portfolio for a major product line indicates that the impacts of process alignment and partnering flexibility on competitive performance are moderated by the three supplier portfolio characteristics. Specifically, while concentrated relationship portfolios, long-term relationships, and supplier substitutability amplify the positive effect of process alignment on competitive performance, concentrated relationship portfolios and long-term relationships attenuate the competitive benefits that firms derive from partnering flexibility. While long-term relationships and concentrated supplier portfolios enhance the competitive benefits of process alignment, operations managers also need to recognize the detrimental effects of these supplier portfolio characteristics on the competitive benefits of partnering flexibility.