Buyer‐supplier management in the aerospace value chain

Abstract

This paper examines the peculiar nature of buyer‐supplier relations from a value chain perspective in the UK aerospace sector. A detailed examination is made of buyer strategies in terms of acquisition, management and exploitation of supplier product, process and marketing technologies. Porter’s value chain framework was evaluated and subsequently found to be the most useful one for structuring the initial stage of data collection. The discussion is based on a three‐year programme of observation of the aerospace sector. In this paper we present the results of in‐depth research at one large aerospace contractor who is acting as a buyer and three firms who are supplying to it. The research investigation suggests that problems to relationship building can arise from the buyer’s perceptions of the product and the technologies held by the suppliers. These are the tendencies of the buyer to focus their attention inwards, a neglect of external sources of potential core products (technologies) and a desire to resist any disruption to the existing system of supplier management. This research contributes to buyer‐supplier relationship theory by developing a preliminary model, which links value chain integration to the nature and form of supplier relations.