Value drivers in supplier relationships – A need for internal alignment

The role of the purchasing function is changing. Recent research shows that purchasing continues to move from a simple money-saving activity, towards being regarded as strategic in line with manufacturing and sales activities. However, a pre-study including purchasing managers from nine large and medium sized European industrial manufacturers shows that purchasing strategies a still dominated by a cost-focused perspective. Relationship value drivers in these strategies are cost-focused implying a lack of attention towards obtaining possible relationship benefits. To investigate if this is actually the case in practice, two case studies with different supplier settings have been conducted: One case with supplier relationships in an operational setting and one case with collaborative development of new products. The study indicates that despite the focus on cost reductions in formal purchasing strategies, employees interacting in supplier relationships act from a more varied set of priorities moving from core offering value drivers towards customer operations value drivers the more development is part of the relationship.