Supplier Capabilities Research Articles

Interactive Dynamic Capabilities and Regenerating the East German Innovation System

The paper sets out a specification of capabilities and competencies derived from Sen’s work on consumer capabilities and welfare economics. This approach is one that proves remarkably easy to generalise, first to producer and supplier capabilities, and thence to interactive and dynamic capabilities. The approach is then applied via the consequential perspectives of regional systems of innovation and network alignment to the case of the efforts to regenerate the innovation system in East Germany since reunification. It is seen that this process can be divided into three periods, of which the most recent appears to meet some of the theoretical requirements for effective interactive capabilities. It is less clear that the criteria for dynamic capabilities—which involve considerations of speed-up and flexibility, to meet the market requirements in real time—have yet been taken sufficiently seriously.

Influences of supplier capabilities and collaboration in new car development on competitive advantage of carmakers

PurposeThis study aims to investigate relationships among supplier capabilities, collaboration in new car development, and the competitive advantage of carmakers based on the resource‐based view (RBV).Design/methodology/approachA survey of first‐tier suppliers in the Korean automotive parts industry was conducted, and pertinent hypotheses were tested by using the ordinary least squares (OLS) method and hierarchical multiple regression analysis (HMRA).FindingsIt was found that suppliers' flexibility, engineering and modularization capabilities positively influence collaboration in new car development, which in turn positively affects the competitive advantage of carmakers. This result empirically verifies the RBV proposition that one motive for interfirm collaboration can be the opportunity to gain access to other firms' resources/capabilities. The theory of the RBV was further extended by demonstrating that suppliers' quality improvement and modularization capabilities directly contribute to the competitive advantage of carmakers and that the influence of quality improvement and modularization capabilities on this competitive advantage are robust against technological uncertainty. However, the positive effect of collaboration in new car development on the competitive advantage of carmakers is decreased by the moderating effect of technological uncertainty.Research limitations/implicationsThe findings of this study were obtained from a limited population of the Korean automotive industry. This study not only empirically verified the proposition of the RBV but also extended the RBV theory by empirically demonstrating direct relationships between suppliers' capabilities and carmakers' competitive advantages.Practical implicationsSuppliers must enhance flexibility, modularization and engineering capabilities in order to vitalize collaboration with carmakers in new car development. As technological uncertainty increases, carmakers should address in‐house the problems caused by technological uncertainty or delegate related jobs only to suppliers with significant capabilities for quality improvement and modularization.Originality/valueThis is one of the few studies to identify the moderating effect of technological uncertainty on interfirm collaboration.

A fuzzy linguistic computing approach to supplier evaluation

Harnessing the supply base is an important but complex task for enterprises. Supplier performance evaluation is increasingly seen as a strategic issue for companies to maintain and enhance the competitive edge. However, evaluating suppliers is complicated by the fact that various criteria must be considered in the decision-making process, and is inherently a multicriteria decision-making (MCDM) problem. It also concerns the evaluation by different experts of multiple attributes, both qualitative and quantitative. To perceive and to estimate effectively the capability of suppliers are real arduous tasks for executives. This paper takes advantage of the 2-tuple linguistic computing to coping with the heterogeneity and information loss problems while the evaluation processes of subjective integration. The proposed approach based on the group decision-making scenario assists executives in adroit manipulation of the heterogeneity during integration processes and averts the information loss effectively. Finally, we demonstrate the validity and feasibility by means of a high-technology company in Taiwan.

Enhancement of product development capabilities of OEM suppliers: inter‐ and intra‐organisational learning

PurposeFaced with increased global competition, suppliers must continually update their technology and capabilities to effectively respond to the rapid changes in customer requirements. In the original equipment manufacturer (OEM) supply relationships, it is particularly important for suppliers to enhance their product development capabilities by learning from customers. However, few existing studies have empirically explored this issue. This paper aims to fill some of the gaps.Design/methodology/approachBased on the organisational learning perspective, this paper investigates learning between the suppliers and customers of OEM relations as well as its impact on suppliers' product development capabilities. Structure equation modelling was used with data collected from 147 OEM supply relations of 117 Taiwanese information technology (IT) companies. The relationships among learning intent, interactive learning, internalised learning, and product development capabilities were examined.FindingsResults show that suppliers with a high learning intent are able to facilitate inter‐organisational and intra‐organisational learning to enhance their product development capabilities.Originality/valueThe paper proposes and empirically tests a model to explain how the OEM suppliers' product development capabilities are enhanced by the relationships between learning intent, inter‐organisational learning, and intra‐organisational learning.

Influences of supplier capabilities and collaboration in new car development on competitive advantage of carmakers

Influences of supplier capabilities and collaboration in new car development on competitive advantage of carmakers

A conceptual framework for prototyping outsourcing in new product development

Purpose – The purpose of this paper is to propose a conceptual framework for prototyping outsourcing.Design/methodology/approach – This study provides an up‐to‐date literature review and an in‐depth case study.Findings – This study identifies three factors (i.e. the degree of the prototyping to core competence, prototyping complexity, and supplier's capability of providing knowledge and speed for prototyping) and three types of risks (i.e. losing control over suppliers, dependency on suppliers, and supplier's lack of capabilities) for prototyping outsourcing decisions.Practical implications – This paper provides guidelines for new product development managers in order to mitigate the risks associated with outsourcing and achieve effective prototyping.Originality/value – This study provides a strategic outsourcing framework for prototyping.

Global supplier selection strategies and implications for supplier performance: Turkish suppliers’ perception

In today's global competitive environment, supplier evaluation and selection strategies are not only important for buyer performance and competitiveness, but also for supplier performance and capabilities. This study from the suppliers’ perception examines (i) the structure of supply relationships between Turkish automotive parts and components manufacturers and their global buyers, (ii) global buyers’ supplier evaluation and selection strategies, and (iii) the impact of global buyers’ supplier evaluation and selection strategies on the supplier performance in the long-term. Data from automotive parts and components suppliers in Turkey were used to test the hypotheses through multiple regression analysis. The findings of this study reveal that automotive parts and components suppliers can be either in tier-type relationhips with their global buyers or they can be out of the tier hieararchy. In a tier-type relationhip, supplier can be either first-tier supplier for some products/relationships or/and they can be second-tier supplier for other products/relationships. To establish long-term supply relationships on a global base supplier evaluation and selection strategy is based on many decision criteria and impacts on the supplier's operational, technical and financial performance in the long-term. Therefore, there is a positive association between supplier evaluation and selection strategy and supplier performance, which guides and motivates supplier firms to improve their performance and capabilities. From the supplier's perception, quality, delivery, and price along with commitment and trust are the most important dimensions in global supplier selection and establishing long-term supply relationships. Additionally, while in previous studies buyers perceive cost to be an important supplier selection criterion, in this study suppliers perceive price as more important in supplier selection. As a result, this study, revealing the perception of the suppliers, fulfils a gap and suggests several implications.

AN EMPIRICAL EXAMINATION OF REVERSE AUCTION APPROPRIATENESS IN B2B SOURCE SELECTION

Electronic reverse auctions (e‐RAs) are receiving attention as an effective strategy for reducing the price of purchased goods and services. To optimize their use, sourcing professionals will need to match firm requirements to market characteristics and supplier capabilities through the application of optimal sourcing strategies. To date, explanations of why sourcing managers decide to utilize an e‐RA strategy are incomplete. This study relies upon strategic sourcing concepts coupled with extant research on e‐RA use to develop a conceptual model of antecedents to the perceived appropriateness of e‐RA usage. The model is tested and supported via structural equation modeling. Findings demonstrate that a sourcing professional's perception as to the appropriateness of using an e‐RA for sourcing a particular requirement is influenced by (1) the specifiability of the requirement (2) supplier competition, (3) leadership influence, and (4) a price‐based selection criterion. Further, a requirement with higher specifiability was found to increase competition in an e‐RA bidding event. Contributions to theory, practice, and future research directions are identified.

Changes and Determinants of Suppliers’ Customer Scope in the Korean Automobile Industry after the Asian Financial Crisis

This paper investigates changes in suppliers’ customer scope in the Korean automobile industry after the Asian financial crisis as well as causes for those changes. The paper found that the “customer scope” of suppliers, i.e. the number of assemblers that suppliers traded with, had increased compared with the past. This suggests that the closed and exclusive buyer–supplier relationship that existed in the Korean automobile industry before the crisis has somewhat loosened. Causes behind these changes can be attributed to the severe economic recession that occurred just after the Asian crisis and the changing competitiveness of suppliers in cost and quality. Foreign investments in Korean suppliers and the capability of suppliers in R&D did not have the expected influences in increasing customer scope. The results of this analysis can be used as a reference in analyzing the effect of current global financial crisis on the buyer–supplier relationship in the automobile industry.

Medi SPICE development

AbstractThis article outlines the development of a software process assessment and improvement model (Medi SPICE) for the medical device industry. The article details how medical device regulations may be satisfied by extending relevant processes and practices from ISO/IEC 15504‐5. The article also describes the proposed phases of delivery for Medi SPICE.Medi SPICE will define a process reference model, process assessment model (PAM) and organizational maturity model (OMM). The Medi SPICE PAM will be used to perform ISO/IEC 15504 conformant assessments of the software process capability of medical device suppliers in accordance with the requirements of ISO/IEC 15504‐2: 2003. The Medi SPICE Process Assessment Model will be based on ISO/IEC 15504‐5: 2006 and shall be extended to provide coverage of additional software development practices that are required to achieve regulatory compliance within the medical device industry. The processes will be defined within an OMM conformant with ISO/IEC TR 15504‐7:2008. Copyright © 2009 John Wiley & Sons, Ltd.

A review of the IT outsourcing literature: Insights for practice

This paper reviews research studies of information technology outsourcing (ITO) practice and provides substantial evidence that researchers have meaningfully and significantly addressed the call for academics to produce knowledge relevant to practitioners. Based on a review of 191 IT outsourcing articles, we extract the insights for practice on six key ITO topics relevant to practitioners. The first three topics relate to the early 1990s focus on determinants of IT outsourcing, IT outsourcing strategy, and mitigating IT outsourcing risks. A focus on best practices and client and supplier capabilities developed from the mid-1990s and is traced through to the late 2000s, while relationship management is shown to be a perennial and challenging issue throughout the nearly 20 years under study. More recently studies have developed around offshore outsourcing, business process outsourcing and the rise, decline and resurrection of application service provision. The paper concludes by pointing to future challenges and developments.

The effect of supplier manufacturing capabilities on buyer responsiveness

PurposeThe purpose of this paper is to examine the relationships between supplier capabilities, supply chain collaboration and buyer responsiveness.Design/methodology/approachThe sample is drawn from UK manufacturing firms across eight industry sectors. Data are analysed using a three‐step hierarchical regression model to investigate main, interaction and quadratic effects.FindingsThe results indicate that suppliers' capabilities (flexibility, responsiveness and modularity) directly impact buyer responsiveness but that the level of buyer‐supplier collaboration moderates this relationship. Furthermore, the results show a curvilinear relationship directly between collaboration and buyer responsiveness, whereby there is an optimal point beyond which returns on the relationship decline.Research limitations/implicationsThe method adopted is a cross‐sectional design and therefore cannot imply causality. Nonetheless, the findings suggest a number of implications. The paper identifies empirical evidence for the extended resource‐based view (ERBV) of the firm and therefore has implications for the unit of analysis of future studies investigating competitive advantage. Contrary to popular wisdom, the findings also suggest a curvilinear relationship between supply chain collaboration and performance.Originality/valueThe paper provides novel insights into the impact of supplier capabilities on buyer responsiveness. Furthermore, the paper provides empirical evidence for the rationale of the ERBV within the context of operations management.

Supplier development: communication approaches, activities and goals

Operations managers rely on the purchasing function to obtain production inputs from suppliers and to ensure supplier performance. The link between supplier development activities performed by buying firms with their suppliers, in terms of operational outcomes and impact on competitive advantage for the buying firm has been well documented. However, a buying firm should, prior to setting up a supplier development program and investing in supplier development activities, establish goals it wants to achieve and determine how to achieve these goals. Until now, supplier development goals in general and their relationship with supplier development activities have received little research attention. The results from this empirical study suggest that the relationship between the goal to improve a supplier's capabilities and knowledge transfer from the buyer to the supplier firm is moderated by the degree of human interaction. Buying firms pursuing the strategy to improve supplier capabilities rely more intensively on training and co-location of buyer and supplier employees to leverage the knowledge transfer to the supplier firm.

Purchasing practices in small- to medium-sized enterprises: An examination of strategic purchasing adoption, supplier evaluation and supplier capabilities

The benefits that can be derived from effective purchasing have long been recognised in the management literature. Despite a growing body of research on purchasing practices in small- to medium-sized enterprises (SMEs), a number of key issues remain under-examined. We investigate SME purchasing practices in terms of (1) the degree to which purchasing is regarded as a ‘strategic’ activity by SMEs, (2) the use of supplier evaluation systems by SMEs and (3) the supplier capabilities emphasised by SME buyers. Through a survey of UK SME managers, we find that purchasing practices varied greatly across SMEs. Purchasing formality is generally low with limited evidence of purchasing being employed strategically and with many firms not undertaking formal supplier evaluations. In terms of supplier capabilities, we find that SMEs differ in the capabilities they prioritise, with three distinct groups evident. These groups are labelled ‘holistic’, ‘process’ and ‘logistics’ based on the supplier capabilities they emphasise. These three groups of firms also differed in terms of the emphasis they placed on strategic purchasing, supplier evaluation, technological focus and how they compete in their main markets, but not in terms of firm size or number of suppliers utilised. The implications of these findings are discussed and areas meriting future research are proposed.

Suppliers and Strategies for Upgrading in Global Production Networks: The Case of a Supplier to the Global Automotive Industry in a High-cost Location

The paper analyses the possibilities for a Norwegian supplier incorporated into global production networks in the automotive industry to perform knowledge upgrading and innovation activity. A consistent finding is that different departments of the supplier are parts of different types of global network. The serial production of the supplier is distinguished by quasi-hierarchical governance by customers and by lean forms of work organization in the production that stimulate continuous, incremental upgrading of the production process. The development department has network relations with customers and learning forms of work organization, which triggers production and functional upgrading. The learning and innovation capacity of the supplier builds on its long tradition as a producer for the global automotive industry, on its location in a regional cluster with strong industrial traditions and on its involvement in a strong Norwegian “aluminium innovation system”. The supplier's capability complements the strategic needs of global automotive firms and contributes to embedding the supplier in a high-cost location.

Supplier Capabilities and eSourcing Relationships

The forces of globalization have influenced organizations to extend the concept of IT outsourcing to IT-intensive business process outsourcing (eSourcing). Most of the research on managing outsourcing relationships has focused either on legal contracts or on strategic partnerships. Advocating a different viewpoint, researchers like Rousseau (1995) found that in reality everyday working of contractual relationships was governed by individual’s subjective interpretation and was fundamentally psychological in nature. The objective of this paper is to posit a relationship step model which projects a vital relationship management capability plus psychological contract perspective for eSourcing. It incorporates the stance of relational contract, interorganizational relationship and psychological contract theories. Using the qualitative research paradigm, the research model is preliminarily explored with case studies of two eSourcing suppliers. The exploratory results of this research indicate that relationship management capability of suppliers is an important factor shaping the outsourcing value proposition.

Modelling of outsourcing decisions in global supply chains. An empirical study on supplier management performance with different outsourcing strategies

Outsourcing decisions in global supply chains are critical to a business’ competitiveness. This study investigates and compares the supplier management in Taiwanese enterprises under different outsourcing strategies. Base on an empirical study through questionnaires, we investigate the supplier management and critical success factors of the Taiwanese enterprises. It is shown that different outsourcing strategies should be deployed by different types of industries, and a good working relationship with suppliers and customers are paramount to success. The important issues related to supplier management include supplier capability to deliver on time, long term contract strategy with suppliers, supplier evaluation, and quality of material from suppliers.

Backward FDI linkages as a channel for transferring technology and building innovation capability: The case of Slovenia

Backward linkages of foreign subsidiaries with their local suppliers prove to be one of the main channels of knowledge spillovers via foreign direct investment. This paper analyses the potential of backward linkages of foreign subsidiaries in Slovenia for the transfer of technology and for the innovation capability-building of their local suppliers. Based on a survey of foreign subsidiaries in Slovenia, we aim to investigate the mechanisms of knowledge spillovers via linkages of foreign subsidiaries with local suppliers in Slovenia. This enables us to trace the development of the technological and organizational capability of local suppliers in order to meet the growing demands made by foreign subsidiaries. This firm-level analysis is complemented with an analysis of the national innovation policy to see whether the measures introduced to support innovation are in fact helping local business to improve its technological capability and are thus providing additional stimuli for innovation.

The effects of supplier capabilities on industrial customers’ loyalty: the role of dependence

This research examines whether suppliers’ capabilities impact OEM customers’ dependence on the supplier and thereby generate customer loyalty. Using a sample of purchasing managers focusing on a single key component supplier, we examine three supplier capabilities, two dependence dimensions, and three aspects of customer loyalty. Core offering capability increases the customer firm’s benefit-based dependence. Operations capability has a more comprehensive effect, enhancing both benefit-based and cost-based dependence. Benefit-based dependence leads to relational loyalty and, through its effect on relational loyalty, to insensitivity to competitive offerings and future purchase expansion. Cost-based dependence motivates insensitivity to competitive offerings, but does not affect relational loyalty or purchase expansion. The supplier’s communication capability is associated with relational loyalty, but this effect does not flow through the customer firm’s dependence. The divergent pattern of antecedents and effects of benefit-based dependence and cost-based dependence may explain the inconsistent and insignificant research findings in previous research on dependence. Our results suggest that adopting a bi-dimensional model of dependence more fully captures the theoretical domain of dependence, thereby permitting researchers to better examine its role in supply chain, channel, and marketing relationships.

Simultaneous configuration of platform products and manufacturing supply chains

The product platform concept represents a powerful approach for manufacturers to compete cost-effectively in a global market that requires diverse product range, quick time to market, and rapid responses to supply sources. A key challenge is how to strike a balance between platform commonality and modularity. When a manufacturer outsources its raw materials or module options, the supplier capabilities and production costs should be considered. This paper discusses optimizing decision variables for simultaneously configuring not only platform-based product variants but also their supply chain. We develop a mixed-integer programming model that integrates both platform product design and material purchase decisions based on cost drivers sensitive to commonality and modularity. Theoretical analysis of the model yields two properties, allowing us to further simplify the model and thus help in developing an effective solution algorithm. A numerical example is presented to illustrate how manufacturers strive to dynamically adjust their product design strategies in response to changes in the market demands and/or supply base.