Sustainable supply management as a purchasing capability

Abstract

Purpose – The purpose of this paper is to use the relative power and total interdependence concepts as an intervening theoretical lens to explain why and how sustainable supply management (SSM) initiatives by manufacturing firms differ across the Kraljic matrix according to purchasing capability. Design/methodology/approach – Tested hypotheses by subjecting survey data from 338 manufacturers on buyer-supplier relationships in Europe and North America to regression analysis. Findings – Shows three situations where relative power and total interdependence determine the effectiveness of purchasing capabilities. First, sustainability programs impact supplier compliance in all Kraljic categories but bottleneck items. Second, there are significant trade-offs between lower cost and higher social and environmental supplier compliance for noncritical components. Third, strategic alignment of sustainability objectives between corporate and supply function levels only leads to improved financial performance for strategic components. Research limitations/implications – Further research could take power and dependence into account to explain when and how purchasing capabilities focussed on sustainability can be achieved. Practical implications – Shows how supply strategists could devise-tailored approaches for different purchasing categories with respect to power and dependence when pursuing economic, social and environmental objectives in combination – the triple bottom line – along their supply chains. Originality/value – Illustrates and provides a theoretical explanation for why SSM is a purchasing capability that must vary across purchasing categories defined by different situations of power and dependence.