Purchasing and innovation: a capability-based analysis (original) (raw)
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Purchasing Capabilities for Supplier Innovation in New Product Development
2011
Getting innovation out of suppliers requires the internal absorption of supplier knowledge. Few studies have analyzed the role of the purchasing function for realizing this innovation potential. The purpose of the paper is to explore the effect of purchasing capabilities on supplier innovation in relation to different supplier product categories, taking into account innovation performance as a strategic priority moderating the relationship. The results of the paper are based on the international purchasing survey (IPS) and confirm that purchasing capabilities are important for realizing supplier innovation. For strategic products, the effect of purchasing capabilities is leveraged when the firm focuses strategically on innovation. In contrast, for bottleneck and routine products, purchasing capabilities are leveraged when there is a low focus on innovation in the firm. Consequently, firms need to prepare purchasing with the right capabilities to ensure their contribution to the innovation process and the external integration with suppliers.
The path of innovation: purchasing and supplier involvement into new product development
This paper aims to investigate the effects of supplier collaboration on the firm innovation performance as well as the enabling characteristics of the purchasing function. This is an original contribution as few papers empirically test the effect of supplier collaboration (meant as supplier involvement, development, and integration) on innovation performance and — simultaneously — the contribution of strategic sourcing activities and purchasing knowledge. Also, we explore the technological uncertainty of the purchase as an important contingent factor that might influence the firm's innovation strategy and the emphasis on supplier collaboration or strategic sourcing. Towards this end, we develop a theoretical framework and test it through a survey conducted on a sample of 498 companies worldwide. Results show that innovation, as a category priority, does lead to emphasize supplier collaboration and strategic sourcing which, in turn, ensure better innovation performance. Empirical evidence also shows that, on the one hand, adequate purchasing (managers) knowledge enables greater supplier collaboration and strategic sourcing; on the other hand, technological uncertainty put greater emphasis on innovation strategy as well as on strategic sourcing.
Journal of Innovation Management
This paper illustrates how the purchasing department (PD) stimulates business performances throughout a flow in which innovation, technology orientation and R&D effectiveness are involved. Data were collected via a survey to Italian companies of the chemical industry. Given the role of the respondents, we had a clear portrait of the companies and of their path towards innovation and performance’s boosts. Results show that the PD plays a special role by acting as a bridge towards external players, but also internally among other functions. Moreover, internally the PD has a bonding and bridging role, since it stimulates the company through innovation and R&D activities having, as a result, boosted performances.
European Journal of Purchasing & Supply Management, 2002
The basic premise of this study is that suppliers, in order to compete successfully in the marketplace, have to develop certain innovative capabilities that, in turn, depend on the type of relationship that is established with customers (in other words, the strategic role assumed by the supplier in the supply chain). Based on a study of 198 suppliers operating in the food packaging machinery industry, structural equation modelling has revealed that customers actually assign suppliers different roles and give them varying levels of responsibility in the product development and manufacturing stages. These roles are correlated to the supplier's distinctive innovation capabilities. Clustering analysis is used to divide the suppliers into homogeneous groups. Innovative capabilities are not only associated with traditional competencies in R&D and product/process innovation but also in supportive capabilities in the form of absorptive capacity, technological scanning, innovation-oriented culture, skills and know-how of individuals and managerial practices. The impact of different innovative capabilities (both technological and managerial) on critical performance factors such as price, quality, time and flexibility is measured for each type of supplier in turn. The research findings lend support to the hypothesis that the level of investment in technology and the acquisition of specific managerial capabilities are, to a large extent, a determinant of supplier-customer interdependence.
Shades of the Innovation-Purchasing function
This paper seeks to instigate a new area of research in the EPI (Early Purchasing Involvement) literature around the question: How should a purchasing function evolve in order to identify and capture innovation in the supplier market? Particularly, we attempt to characterize the specificities of the Innovation-Purchasing functions, an emerging function acting in the fuzzy front end of projects. The contribution of this paper is a reification of what an Innovation-Purchasing function is through an internal benchmarking study within a multinational multidivisional firm evolving in the automotive sector. We use for that the analysis grid of Van Echtelt et al. (2008) developed for specify the necessary activities to manage Early Supplier Involvement (ESI). It shows similarities and differences between the observed practices of what we call Early Purchasing Involvement in Innovation (EPI2) and the more classical EPI activities in NPD context. Specifically an enforced strategic role of EPI2 by influencing the innovation process connecting it to the supplier market and linking R&D and purchasing strategies.
Competences and Capabilities for Innovation in Supply Chain Relationships
There is little empirical research on the relational capabilities and competences in supply chain relationships, and the important links that exist between relational capabilities, competences and supply chain innovation. This study addresses some of that knowledge gap gained through a case study of the Australian freight services sector. Findings suggest that different competences developed by supply chain participants support different ways to enable operational effectiveness. Road freight businesses should acquire knowledge of how to select and manage inter-firm relationships that provide the greatest benefit, acquiring competences that either improve their current capabilities or assist them to explore strategies that ensure incremental innovation and supply chain performance objectives are met.
Journal of Business & Industrial Marketing, 2016
Purpose – This paper aims to analyze the impact of three types of embedded ties, namely, specialized complementary resources, idiosyncratic investments and knowledge sharing, on the innovation capacity of firms. It also examines the particularities of the machine-tool industry. Design/methodology/approach – The evaluation of the embedded buyer-supplier ties is based on the potential sources of relational rents proposed by Dyer and Singh (1998). It also draws on Uzzi and Lancaster (2003) and Noordhoff et al. (2011), among others, to discuss the positive and negative aspects of embedded ties. Using data from a survey of 202 European machine-tool firms acting as buyers and sellers, the study proposes and evaluates a structural equation model. Findings – Only knowledge-sharing routines exert a significant positive effect on product innovation performance. Neither an increase in idiosyncratic investments nor in complementary resources and capabilities enhances innovation performance. Mor...
Organizing the purchasing department for innovation
Operations Management Research, 2011
Innovation is by far one of the most important competitive priorities in the current business context. Companies increasingly rely on their supply base to support their innovation potential. As a consequence, the purchasing department might dramatically affect the firm’s innovation capability. This paper aims to investigate—using a multiple case study approach—how the organizational design of the purchasing department could determine a firm’s capability to foster and manage innovation. Seven highly innovative companies were visited and the structures of their purchasing departments were analyzed. Three different configurations for the purchasing department were identified and described.
Industrial Marketing Management, 2013
Drawing on organizational learning and the relational view of the firm, this study seeks to understand the factors that drive supplier innovativeness in the context of cross-border supply relationships. To address this research objective, a survey included 189 parts and components manufacturers (suppliers) in Turkey; hierarchical regression analysis is used to test the hypotheses. The findings demonstrate that interfirm knowledge sharing routines, relation-specific investments, and governance mechanisms may promote supplier innovativeness by expanding the supplier's knowledge resources and encouraging it to invest in innovative activities. In addition, this research emphasizes differentiating effects of the supplier's tier position for the impacts of buyer assistance and cooperative tie. As such, this study contributes to the purchasing and supply management literature by empirically showing how buyer-supplier relationships, particularly in cross-border supply networks, affect supplier innovativeness.
Organization Of The Purchasing Function For Innovation
2014
Innovations not only contribute to competitiveness of<br> the company but have also positive effects on revenues. On average,<br> product innovations account to 14 percent of companies' sales.<br> Innovation management has substantially changed during the last<br> decade, because of growing reliance on external partners. As a<br> consequence, a new task for purchasing arises, as firms need to<br> understand which suppliers actually do have high potential<br> contributing to the innovativeness of the firm and which do not.<br> Proper organization of the purchasing function is important since<br> for the majority of manufacturing companies deal with substantial<br> material costs which pass through the purchasing function. In the past<br> the purchasing function was largely seen as a transaction-oriented,<br> clerical function but today purchasing is the intermediate with supply<br> chain partners contri...