Benefiting From Supplier Operational Innovativeness: The Influence of Supplier Evaluations and Absorptive Capacity

As suppliers take on more important roles in manufacturing and designing products, their operational innovativeness becomes an important source of value. We use the relational view theory to hypothesize for a positive association between operational innovativeness of established suppliers and manufacturer performance. Furthermore, we posit that the manufacturer can enhance this value by ensuring that the supplier is performing as expected (i.e., through supplier evaluation programs), and by focusing on learning from the supplier (i.e., through absorptive capacity). We then develop hypotheses as to how the influence of these two approaches differs when working with suppliers assigned to different types of tasks. We test the hypotheses using survey responses from 136 manufacturers evaluating 272 of their suppliers. Results show that supplier evaluation programs and absorptive capacity are both effective means of augmenting the benefits of supplier operational innovativeness. Contrary to theoretical predictions, benefits of operational innovativeness of suppliers with knowledge-intensive tasks are enhanced through increased absorptive capacity and through increased supplier evaluation programs.