Characteristics of supplier performance measurement systems in collaborative innovation projects: the role of the purchasing department

Abstract

Purpose In the wake of the growing popularity of the open innovation approach, leveraging suppliers as external sources of innovation has attracted increasing interest from scholars and practitioners. Successful supplier involvement largely depends on an effective performance measurement process, but both supply chain management and innovation management literature have paid limited attention to this aspect. This paper aims to fill this gap by illustrating how companies measure the performance of the suppliers involved in their innovation projects and what role is played by the purchasing department. Design/methodology/approach This study interviews project stakeholders from nine different organizations acting as focal companies in the supply chains of various industries. This paper complements this on-field information with a vast amount of data collected from secondary project documents. Structured data coding and analysis allow us to discuss how companies redesign their performance measurement systems to ease the collaboration with suppliers in innovation and what factors underly these decisions. Findings The findings show that, in many cases, supplier performance measurement systems deviate from their typical characteristics to support collaboration in innovation projects. They integrate quantitative and qualitative measures, include contributions from different project stakeholders and are oriented toward high visibility and transparency with suppliers. A more substantial redesign of these systems is favored when purchasing is assigned to strategic project responsibilities and possesses higher absorptive capacity. Originality/value The results complement the knowledge for the supply chain management field, where supplier performance measurement systems have been discussed in the context of traditional buyer-supplier relationships, but not comprehensively in innovation projects and not considering the role of purchasing. Findings also contribute to the innovation management literature, which has mostly focused on what aspects need to be measured for innovation partners, rather than how to manage the performance measurement process in practice.

Managing triadic supplier relationships in collaborative innovation projects: a relational view perspective

“…The research advances understanding of OI ecosystems in supply chains (Oh et al , 2016), supplier collaboration (Koufteros et al , 2007; Patrucco et al , 2021) and the governance of tensions in supplier–supplier relationships (Wu et al , 2010; Ates et al , 2015; Zacharia et al , 2019). Particularly, this research contributes with an empirical triadic study.…”

“…Information provided by buyers and suppliers was coded and analyzed using the theoretical lens of the relational view (RV) (Dyer and Singh, 1998). RV allows us to study not only different relational design choices but also how and why combinations of these choices are related to performance within individual projects (Patrucco et al, 2021). This article is organized as follows.…”

Implementing supplier integration practices to improve performance: The contingency effects of supply base concentration

“…This accomplishment, combined with enhanced suppliers' capabilities and evolved technologies, produces benefits to strategic projects such as new product launches, positively affecting a buyer's innovation (Krause et al, 2007; Schoenherr & Swink, 2015; Wagner, 2011). Innovation management literature suggests that buyers obtain effective innovation through the collaboration and support of external actors (in particular, suppliers), who provide human, knowledge and technological resources that the buyer may lack (Leonidou et al, 2020; et al, 2021). Following these logical arguments, we hypothesize that:H1 Supplier development has a positive effect on the buyer‘s (a) efficiency and (b) innovation.…”

“…In addition, operational coordination improves a buyer's innovation, as better coordination and more efficient processes shorten time‐to‐market. Moreover, the interaction between parties during operational coordination enables a learning process that, in the medium term, can help buyers to develop new ideas and enhance their innovativeness (Turkulainen & Swink, 2017), as suggested by the open innovation paradigm (Patrucco et al, 2021). Scholars note that the time and effort required for operational coordination may create rigidities that nullify its potential benefits (Flynn et al, 2010).…”

Open Innovation in Organization Through Stakeholder Capability During Pandemic (COVID-19): Indonesian SMEs Perspective

“…Through this strategic network, SMEs can exploit resources together, carry out continuous innovation and produce new or better products in the market [55]. The availability of partnerships and collaborative tools can accelerate the application of open innovation to overcome the challenges faced during the COVID-19 pandemic [56].…”