Network pictures for managing key supplier relationships

Abstract

We contribute to key supplier management literature, emphasizing the buyer's insight into key suppliers' surrounding networks. We build on supply network research suggesting that buyers must manage their key suppliers in their network contexts, and research suggesting that managing in networks is based on the interacting parties' network pictures. The theoretical insights were systematically combined with a single-case study of a buyer and four key suppliers. We suggest that a buyer assess the congruence between the buyer's network picture of key suppliers and the key suppliers' own network pictures, paying attention to obsolete, incorrect, incomplete, or generic elements. Second, a buyer may consider five “rules for revision” that can reveal problems arising from the obsolete, incorrect, incomplete, and/or generic elements. Third, the buyer may uncover new opportunities in key suppliers' networks by pursuing four strategies: systematic search, systematic discovery, chance search, and chance discovery. Thereby, the buying company may revise its network picture and contemplate alternative actions and reactions toward key suppliers. Our findings have implications for key supplier managers and others who interact with key suppliers. Further research should investigate how a buyer's insight into key suppliers' networks affects the performance of the buying firm, and the key suppliers.