The drivers of supply management capability

Abstract

Purpose

The purpose of this paper is to unite the fragmented discussion concerning organizational-level capability in terms of purchasing and supply chain management. The capability drivers are identified from the literature and then validated by purchasing professionals. The impacts of the identified capability drivers on supply management capability are empirically examined. To increase a firm’s supply management capability, it is essential to connect purchasing and supply chain management to the firm’s strategy, as well as to establish robust policies and procedures for the activities of supply function, and to promote supplier orientation and the value of supplier networks to the business.

Design/methodology/approach

Data and methodological triangulation are utilized in the form of focus group sessions and a large scale survey. A regression analysis of the data from 165 Finnish firms is performed to examine the influence of the drivers.

Findings

The drivers of supply management capability proposed in this study and ranked by the focus group were the strategic status of procurement, supplier orientation, and the formalization of organizational responsibilities and roles in the purchasing function. An examination of these components and their relation to capability by means of a regression analysis showed that they have positive effects and high explanatory power on supply management capability.

Originality/value

The paper summarizes capability studies in the field of purchasing and supply chain management from the last two decades and also fulfils the need for empirical studies concerning the concept of supply management capability. Moreover, it contributes to the theory development by confirming that supply management capability really is a strategic asset of a firm.

Citation

Lintukangas, K., Hallikas, J., Koivisto-Pitkänen, M. and Kähkönen, A.-K. (2016), "The drivers of supply management capability", Benchmarking: An International Journal, Vol. 23 No. 7, pp. 2109-2127. https://doi.org/10.1108/BIJ-02-2015-0014