A theory-based perspective on the value of purchasing and supply management and its supply base for the generation of competitive advantages

Abstract

The continuous creation of value is one of companies’ most important goals and the only way to survive economically in the long run. A growing number of researchers point to the pivotal importance of business relationships for value creation (e.g. Anderson et al., 1994; Biong et al., 1997; Gemünden et al., 1996; Ravald et al., 1996). Value creation is also regarded as the essential purpose for a buyer and a supplier engaging in any kind of relationship (Sattler et al., 2005; Wilson, 1995). Companies begin to realize that suppliers are creating value not only in the form of cost reductions or quality improvements but also through innovation fostering, risk reduction or increased flexibility (Meier, 1988; van Weele, 1994). Therefore, value creation through suppliers has become an area of interest for many companies. Suppliers can provide buying firms with competitive advantages through their products and services but even more through their many different capabilities (Wagner, 2001) not directly incorporated into their products or services. The identification of those suppliers with the most suitable capabilities is today one of PSM’s most important roles.