Mapping Buyer-Supplier Relationships after the Open Innovation Perspective

Abstract

Suppliers are one of the main sources of innovation for a manufacturer. The open innovation paradigm has emphasized suppliers’ contribution in terms of innovation performance. When firms explicitly purchase innovative components, they are implicitly paying suppliers for the R&D effort carried out to develop such components. With this work, a classification of buyer-supplier relationships is provided after the open innovation perspective. Specifically, four open innovation practices are presented, considering (a) the mechanism of component integration within the end product architecture and (b) the importance of the supplier innovation capabilities. The recourse to these four models depends on the stage of evolution and maturity of the manufacturer product architecture. An example from the smartphone industry demonstrates that each stage fits with a specific open innovation practice. Therefore, the suggested classification can be seen as a framework for the definition of the appropriate practice to manage buyer-supplier relationships. Additional implications regard the prioritization of specific supplier selection criteria depending on the open innovation practice to adopt. From the managerial perspective, the work underscores the need of strict collaboration between the purchasing department and the business units operating on the end product development.