Knowledge absorption from customers and its interplay with supplier adaptability for better operational and innovation performance

Purpose This study investigates how manufacturing firms enhance their competitive performance, specifically operational and innovation performance, by absorbing knowledge from customers and leveraging the adaptability of suppliers. Design/methodology/approach The proposed hypotheses were assessed using multisource data collected from 259 plants worldwide. Findings The results highlight that both customer knowledge and supplier adaptability are critical to manufacturing firms’ knowledge absorption processes. Customer knowledge acquisition improves operational and innovation outcomes, while supplier adaptability reinforces this effect by enabling firms to integrate better and apply external knowledge. Practical implications This research offers actionable insights for manufacturing managers by underscoring the need to strategically engage both customers and suppliers to improve plant-level performance through enhanced knowledge flows. Originality/value By highlighting the moderating role of supplier adaptability within the knowledge absorption–performance relationship, this study extends the knowledge-based view and deepens the understanding of how manufacturing firms can more effectively leverage external knowledge to sustain competitiveness in dynamic environments.