Attraction in buyer-supplier relationships

The purpose of this paper is to shed light on the dynamics of buyer–supplier industrial relationships and the role of customer attractiveness—a requisite to obtain best efforts from suppliers involved in collaborative initiatives.,The paper develops a theoretical framework tested through an international survey with a structured equation modeling approach.,Results confirm that customer attractiveness positively affects both innovation and cost performance ensured by suppliers. Moreover, several direct and indirect antecedents of customer attractiveness are identified, including characteristics of the buying firm’s procurement department (i.e. procurement knowledge and procurement status) and supply chain relationship characteristics (i.e. proficiency of supplier collaboration and visibility).,Because of the survey approach, the research results are limited to the data collected.,Findings support the relevance of collaborative relationships in improving performance, and the key role procurement department could play in managing the multifaceted aspects of supplier collaboration.,This paper investigates, on the one hand, why customer attractiveness is relevant for supply chain management, and what are the effects on innovation and cost performance ensured by suppliers; on the other hand, antecedents of customer attractiveness are considered, with a main focus on organizational and relational procurement variables.

[1]  J. Ramsay.  Purchasing's strategic irrelevance , 2001 .

[2]  John W. Henke,et al.  Managing Supplier Satisfaction: Social Capital and Resource Dependence Frameworks , 2015 .

[3]  G. Zsidisin,et al.  An examination of strategic supply management benefits and performance implications , 2008 .

[4]  Robyn Bew.  The New Customer of Choice Imperative: Ensuring Supply Availability, Productivity Gains, and Supplier Innovation , 2007 .

[5]  Holger Schiele,et al.  Accessing Supplier Innovation By Being Their Preferred Customer , 2012 .

[6]  L. Ellram,et al.  A Portfolio Approach to Supplier-Relationships , 1997 .

[7]  John N. Pearson,et al.  Status and Recognition of the Purchasing Function in the Electronics Industry , 1996 .

[8]  Henry Adobor,et al.  Strategic purchasing and supplier partnerships—The role of a third party organization , 2014 .

[9]  Stephan M. Wagner,et al.  Supplier relationship-specific investments and the role of safeguards for supplier innovation sharing , 2014 .

[10]  F. Wynstra,et al.  Managing supplier involvement in product development:: Three critical issues , 2001 .

[11]  C. Fornell,et al.  Evaluating structural equation models with unobservable variables and measurement error. , 1981 .

[12]  H. Kelley,et al.  Interpersonal relations: A theory of interdependence , 1978 .

[13]  Aino Halinen.  Relationship Marketing in Professional Services: A Study of Agency-Client Dynamics in the Advertising Sector , 1996 .

[14]  D. Luzzini,et al.  Cinderella purchasing transformation: linking purchasing status to purchasing practices and business performance , 2016 .

[15]  Evi Hartmann,et al.  Barriers of purchasing departments' involvement in marketing service procurement , 2009 .

[16]  D. Luzzini,et al.  Purchasing performance management systems: an empirical investigation , 2014 .

[17]  Antonella La Rocca,et al.  Measuring customer attractiveness , 2012 .

[18]  Holger Schiele,et al.  Purchasing strategy development: A multi-level review , 2015 .

[19]  David F. Larcker,et al.  Structural Equation Models with Unobservable Variables and Measurement Error: Algebra and Statistics: , 1981 .

[20]  Desirée Knoppen,et al.  A comprehensive assessment of measurement equivalence in operations management , 2015 .

[21]  Daniel R. Krause,et al.  Improving Supplier New Product Development Performance: The Role of Supplier Development , 2015 .

[22]  H. Kelley,et al.  The social psychology of groups , 1960 .

[23]  Holger Schiele,et al.  The drivers of customer attractiveness, supplier satisfaction and preferred customer status: A literature review , 2012 .

[24]  Alistair Brandon-Jones,et al.  Tools without skills: Exploring the moderating effect of absorptive capacity on the relationship between e-purchasing tools and category performance , 2015 .

[25]  Michael Gibbert,et al.  Customer attractiveness, supplier satisfaction and preferred customer status: introduction, definitions and an overarching framework , 2012 .

[26]  Vernon E. Francis.  Supply chain visibility: lost in translation? , 2008 .

[27]  Hans Voordijk,et al.  Antecedents and benefits of obtaining preferred customer status : Experiences from the Dutch construction industry , 2015 .

[28]  T. Johnsen.  Supplier involvement in new product development and innovation: Taking stock and looking to the future , 2009 .

[29]  J. Nollet,et al.  Becoming a preferred customer one step at a time , 2012 .

[30]  Alan J. Brokaw,et al.  “Positioning” a Company as a Preferred Customer , 1978 .

[31]  Holger Schiele,et al.  SUPPLIER INNOVATIVENESS AND SUPPLIER PRICING: THE ROLE OF PREFERRED CUSTOMER STATUS , 2010 .

[32]  Tron Foss,et al.  The Performance of ML, GLS, and WLS Estimation in Structural Equation Modeling Under Conditions of Misspecification and Nonnormality , 2000 .

[33]  J. González‐Benito.  A theory of purchasing's contribution to business performance , 2007 .

[34]  A. Cox.  Power, value and supply chain management , 1999 .

[35]  H. Gemünden,et al.  Value Creation in Buyer–Seller Relationships: Theoretical Considerations and Empirical Results from a Supplier's Perspective , 2001 .

[36]  David M. McCutcheon,et al.  Suppliers' contributions to product development: an exploratory study , 1997 .

[37]  Lawrence R. Rothstein.  The empowerment effort that came undone , 1995 .

[38]  D. Luzzini,et al.  Assessing the use of External Grand Theories in Purchasing and Supply Management research , 2016 .

[39]  C. Steinle,et al.  Limits to global sourcing? Strategic consequences of dependency on international suppliers: Cluster theory, resource-based view and case studies , 2008 .

[40]  Marko Sarstedt,et al.  PLS-SEM: Indeed a Silver Bullet , 2011 .

[41]  John W. Henke,et al.  A longitudinal analysis of supplier involvement in buyers’ new product development: working relations, inter-dependence, co-innovation, and performance outcomes , 2014 .

[42]  Daniel A. Levinthal,et al.  ABSORPTIVE CAPACITY: A NEW PERSPECTIVE ON LEARNING AND INNOVATION , 1990 .

[43]  Joongsan Oh,et al.  The influence of supplier capabilities and technology uncertainty on manufacturer‐supplier collaboration: A study of the Korean automotive industry , 2008 .

[44]  Holger Schiele,et al.  Identifying innovative suppliers in business networks: An empirical study , 2014 .

[45]  Julian Ming-Sung Cheng,et al.  The performance implications of power-trust relationship: The moderating role of commitment in the supplier-retailer relationship , 2014 .

[46]  Beverly Wagner,et al.  Organisational Supplying Behaviour: Understanding supplier needs, wants and preferences , 2009 .

[47]  D. Luzzini,et al.  Towards full integration: eProcurement implementation stages , 2010 .

[48]  E. Nevis,et al.  Understanding Organizations as Learning Systems , 1995 .

[49]  Thomas V. Scannell,et al.  Success Factors for Integrating Suppliers into New Product Development , 1997 .

[50]  R. Sinkovics,et al.  The effects of supplier involvement and knowledge protection on product innovation in customer-supplier relationships: a study of global automotive suppliers in China , 2014 .

[51]  James C. Anderson,et al.  STRUCTURAL EQUATION MODELING IN PRACTICE: A REVIEW AND RECOMMENDED TWO-STEP APPROACH , 1988 .

[52]  D. Luzzini,et al.  The path of innovation: purchasing and supplier involvement into new product development , 2015 .

[53]  Holger Schiele,et al.  The impact of customer attractiveness and supplier satisfaction on becoming a preferred customer , 2016 .

[54]  Ram Narasimhan,et al.  Purchasing and supply management: Future directions and trends , 1995 .

[55]  Jan Stentoft Arlbjørn,et al.  Inter‐organisational supplier development: the case of customer attractiveness and strategic fit , 2012 .

[56]  Zach G. Zacharia,et al.  AN ANALYSIS OF SUPPLY CHAIN COLLABORATIONS AND THEIR EFFECT ON PERFORMANCE OUTCOMES , 2009 .

[57]  Per Vagn Freytag,et al.  Attractiveness in supply chains: a process and matureness perspective , 2008 .

[58]  Maria Caridi,et al.  The benefits of supply chain visibility: A value assessment model , 2014 .

[59]  Xiaojing Yuan,et al.  Friend or foe: Customer-supplier relationships and innovation , 2017 .

[60]  E. Lawler,et al.  Empowering Service Employees , 1995 .

[61]  Roger J. Calantone,et al.  Buyer attentiveness in buyer-supplier relationships , 2005 .

[62]  Links between internal and external cooperation in product development: An exploratory study , 2004 .

[63]  James A. Narus,et al.  A Model of Distributor Firm and Manufacturer Firm Working Partnerships , 1990 .

[64]  Holger Schiele.  Early Supplier Integration: The Dual Role of Purchasing in New Product Development , 2010 .

[65]  John W. Henke,et al.  The effect of buyer behaviors on preferred customer status and access to supplier technological innovation: An empirical study of supplier perceptions , 2012 .

[66]  Sandy D. Jap,et al.  Control Mechanisms and the Relationship Life Cycle: Implications for Safeguarding Specific Investments and Developing Commitment , 2000 .

[67]  Mervi Vuori,et al.  Buyer attractiveness as a catalyst for buyer–supplier relationshipdevelopment , 2016 .

[68]  Holger Schiele,et al.  Dependency on Suppliers as a Peril in the Acquisition of Innovations? The Role of Buyer Attractiveness in Mitigating Potential Negative Dependency Effects in Buyer–Supplier Relations , 2015 .

[69]  David T. Wilson.  An integrated model of buyer-seller relationships , 1995 .

[70]  Qiang Tu,et al.  Absorptive capacity: Enhancing the assimilation of time-based manufacturing practices , 2006 .

[71]  Thomas Ritter,et al.  The influence of adaptations, trust, and commitment on value‐creating functions of customer relationships , 2003 .

[72]  J. Harkness,et al.  Translation, Adaptation, and Design , 2010 .

[73]  E. Hartmann,et al.  Top and bottom line relevance of purchasing and supply management , 2012 .

[74]  Lars Bengtsson,et al.  Exploiting supplier innovativeness through knowledge integration , 2013, Int. J. Technol. Manag..

[75]  M. Mol.  Purchasing's Strategic Relevance , 2003 .

[76]  Anand Nair,et al.  Structuring Supplier Involvement in New Product Development: A China-U.S. Study , 2016, Decis. Sci..

[77]  C. Rebolledo,et al.  Supplier development efforts: The suppliers' point of view , 2013 .

[78]  C. Harland,et al.  An analysis of research into the future of purchasing and supply management , 2007 .

[79]  Mario Bourgault,et al.  Linking manufacturing improvement programs to the competitive priorities of Canadian SMEs , 2003 .

[80]  Thomas Y. Choi,et al.  Deep, Sticky, Transient, and Gracious: An Expanded Buyer–Supplier Relationship Typology , 2015 .

[81]  H. Yen,et al.  Determinants of supplier‐retailer collaboration: evidence from an international study , 2006 .

[82]  Daniel R. Krause,et al.  Improving Supplier Performance in New Product Development: The Role of Supplier Development , 2015 .

[83]  Maria Caridi,et al.  Do virtuality and complexity affect supply chain visibility , 2010 .

[84]  Scott B. MacKenzie,et al.  Common Method Bias in Marketing: Causes, Mechanisms, and Procedural Remedies , 2012 .

[85]  Henrik Andersen,et al.  A relationship strategy perspective on relationship portfolios: Linking customer profitability, commitment, and growth potential to relationship strategy , 2014 .

[86]  R. Baxter,et al.  How can business buyers attract sellers' resources? Empirical evidence for preferred customer treatment from suppliers , 2012 .

[87]  B. Menguc,et al.  Customer and Supplier Involvement in Design: The Moderating Role of Incremental and Radical Innovation Capability , 2014 .

[88]  F. Dwyer,et al.  Developing Buyer-Seller Relationships: , 1987 .

[89]  K. Dooley,et al.  Buyer-Supplier Collaboration Quality in New Product Development Projects , 2013 .

[90]  Patricia E. Moody.  Customer supplier integration: Why being an excellent customer counts , 1992 .

[91]  D. Corsten,et al.  Exploring the performance effects of key‐supplier collaboration: An empirical investigation into Swiss buyer‐supplier relationships , 2005 .

[92]  John N. Pearson,et al.  The impact of purchasing and supplier involvement on strategic purchasing and its impact on firm’s performance , 2002 .

[93]  Ellen Thomas,et al.  Supplier integration in new product development: Computer mediated communication, knowledge exchange and buyer performance , 2013 .

[94]  Jinwoo Park,et al.  An integrative framework for supplier relationship management , 2010, Ind. Manag. Data Syst..

[95]  Chee Yew Wong,et al.  The combined effects of internal and external supply chain integration on product innovation , 2013 .

[96]  Kari Tanskanen,et al.  Buyer and supplier attractiveness in a strategic relationship — A dyadic multiple-case study. , 2015 .

[97]  D. Grant,et al.  Intermediaries in power-laden retail supply chains: An opportunity to improve buyer–supplier relationships and collaboration , 2015 .

[98]  R. Narasimhan,et al.  The impact of purchasing integration and practices on manufacturing performance , 2001 .

[99]  Srikanta Routroy,et al.  Analysis of preferred customer enablers from supplier's perspective , 2016, Bus. Process. Manag. J..

[100]  Joseph L. Badaracco,et al.  The knowledge link : how firms compete through strategic alliances / Joseph L. Badaracco, Jr. , 1993 .

[101]  Nicolette Lakemond,et al.  Governance of supplier collaboration in technologically uncertain NPD projects , 2015 .

[102]  Brian Squire,et al.  An empirical taxonomy of purchasing functions , 2006 .

[103]  Johan L. Perols,et al.  On the relationship between supplier integration and time-to-market , 2013 .

[104]  Arnold Maltz,et al.  Becoming an "Interesting" Customer: Procurement Strategies for Buyers without Leverage , 2002 .

[105]  P. Blau.  Exchange and Power in Social Life , 1964 .

[106]  Desirée Knoppen,et al.  ABSORPTIVE CAPACITY IN BUYER-SUPPLIER RELATIONSHIPS: EMPIRICAL EVIDENCE OF ITS MEDIATING ROLE , 2014 .

[107]  Larry R. Smeltzer,et al.  An empirically based operational definition of strategic purchasing , 1997 .

[108]  Chris Ellegaard,et al.  Managing Industrial Buyer-supplier Relations - the Case for Attractiveness , 2003 .

[109]  Chris Ellegaard.  Interpersonal attraction in buyer–supplier relationships: A cyclical model rooted in social psychology , 2012 .

[110]  Zach G. Zacharia,et al.  Capabilities that enhance outcomes of an episodic supply chain collaboration , 2011 .

[111]  A. Vereecke,et al.  Performance improvement through supply chain collaboration in Europe , 2006 .

[112]  Poul Houman Andersen,et al.  Supplier involvement in NPD: A quasi-experiment at Unilever , 2016 .

[113]  Daniel F. Lynch,et al.  Examining supply chain relationships: Do buyer and supplier perspectives on collaborative relationships differ? , 2010 .

[114]  M. Tracey.  A Holistic Approach to New Product Development: New Insights , 2004 .

[115]  Kim Sundtoft Hald,et al.  Towards an understanding of attraction in buyer–supplier relationships , 2009 .