We contribute to key supplier management literature, emphasizing the buyer's insight into key suppliers' surrounding networks. We build on supply network research suggesting that buyers must manage their key suppliers in their network contexts, and research suggesting that managing in networks is based on the interacting parties' network pictures. The theoretical insights were systematically combined with a single-case study of a buyer and four key suppliers. We suggest that a buyer assess the congruence between the buyer's network picture of key suppliers and the key suppliers' own network pictures, paying attention to obsolete, incorrect, incomplete, or generic elements. Second, a buyer may consider five “rules for revision” that can reveal problems arising from the obsolete, incorrect, incomplete, and/or generic elements. Third, the buyer may uncover new opportunities in key suppliers' networks by pursuing four strategies: systematic search, systematic discovery, chance search, and chance discovery. Thereby, the buying company may revise its network picture and contemplate alternative actions and reactions toward key suppliers. Our findings have implications for key supplier managers and others who interact with key suppliers. Further research should investigate how a buyer's insight into key suppliers' networks affects the performance of the buying firm, and the key suppliers.
According to theories on supplier management, some suppliers are more important than others, and relationships to the strategically most important suppliers – recently coined “key supplier relationships” (Corsten and Felde, 2005 and Ivens et al., 2009) – should be managed by dedicated key supplier managers, via a set of specialized key supplier practices (Pardo, Missirilian, Portier, & Salle, 2011). However, key supplier relationships, like all supplier relationships, are embedded in wider networks, and instead of managing a key supplier as if it existed in isolation, a buying firm may develop a network awareness capability in order to manage the key supplier in its wider network context (Choi & Kim, 2008). The question is, however, how a buying firm should manage key suppliers in their network context. In this article, we rely on literature on network pictures and network insight generation (Ford et al., 2003, Ford et al., 2011, Henneberg et al., 2006 and Mouzas et al., 2008), and suggest that the discussion on how key supplier relationships can (or should be) managed might benefit from cross-fertilization with ideas and concepts developed within a managing-in-networks perspective. We pursue this idea by empirically investigating, conceptualizing and discussing three issues pertaining to how network pictures can be used for managing key supplier relationships. First, how can a buying company consider whether its present key supplier network picture is in line with the key supplier's network context? Second, how can a buying company become aware that its key supplier network pictures may benefit from being revised? Third, how can a buying firm proceed to acquire new insights, which may lead to revision of key supplier network pictures, and spur new actions and reactions toward key suppliers?
The remainder of the article is structured as follows. In Section 2, we discuss the conceptual background of the article, relying on the literature on key supplier management and network pictures, and we present the three research questions. In Section 3, we explain the method and the case study. In Section 4, the findings from the case study are presented. In Section 5, we discuss the findings in light of the three research questions. In Section 6, we offer conclusions and implications of our research.
In this article, we have proposed that a buying firm may use network pictures for managing key suppliers in their wider network contexts. We set out to investigate three issues. First, how can a buying company consider whether its present key supplier network picture is in line with the key supplier's network context? Based on our research, we suggest that one way of doing this is by assessing the congruence between the buyer's key supplier network picture and the key supplier's own network picture. In particular, we propose that a buying company may consider whether elements in its key supplier network picture are obsolete, incorrect, incomplete, or generic, as well as reflecting on the usefulness of the generic categories used in the network picture.
The second question we posed concerns how a buying company can become aware that its key supplier network picture is in need of revision. We suggested that a buying firm could be inspired by a question or “rule” related to each of the four types of elements mentioned above. Firstly, “how often should we update the network picture?” enables the buyer to reflect on possible obsolete elements in the network picture. Second, “which elements in the network picture are critical for us to have corroborated or refuted?” may help the buyer in addressing possibly incorrect elements. Thirdly, “when and in which direction should we widen the network picture?” inspires the buyer to consider that although network pictures are always incomplete, parts of the key supplier's network may be worth discovering and including in the key supplier network picture. Fourthly, the questions “should we break up some of the aggregate categories into concrete identities of counterparts?” and “should we change the type of the aggregate categories we use?” encourage the buying firm to consider if generic elements in the network pictures should be opened up so that concrete identities and more details of the generic groupings are revealed.
The final issue we addressed was how a buying firm can proceed to acquire new insights, which may lead to revision of key supplier network pictures, and spur new actions and reactions toward key suppliers. We proposed that a company might benefit from employing a combination of different strategies for gaining new insight: systematic search, systematic discovery, chance search, and chance discovery. These strategies differ according to the extent to which the buyer deliberately searches for new insights, and the degree to which the buyer can specify in advance what is searched for. The buying firm has to decide the amount of time, personnel, and other resources a company should allocate to each of the four different strategies, and a key supplier manager should be deeply involved in making such decisions.
