Improving retail supply flexibility using buyer-supplier relational capabilities

Raymond Obayi, lenny koh (Collaborator), David Oglethorpe (Collaborator), seyed Mohammad Ebrahimi

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Abstract

Purpose
The purpose of this paper is to investigate the mediating role of three important relational capabilities – absorptive capacity (AC), transactive memory systems (TMS), and organisational interoperability (OI); on the flexibility of buyer-supplier relationships and performance in retail supply chains. Drawing on the relational view of strategic management, the impact of relational capabilities on two forms of supply chain flexibility is examined – configuration flexibility (CF) for switching suppliers with minimal penalties, and planning and control flexibility (PCF) for altering supply schedules, quality, and delivery lead-time.

Design/methodology/approach
Strategic- and tactical-level managers from 211 retail stores in the UK were surveyed. The authors validated a measurement model with structural equation modelling and tested four hypotheses on the mediating role of relational capabilities on supply chain flexibility and retail performance, controlling for size, duration of relationship, and market segment.

Findings
Results showed that the three relational capabilities partially mediated the positive effect of CF and PCF on operational performance in big middle and niche retailers. Examining the interaction effect of the forms of flexibility on the relational capabilities and performance, the authors found positive interaction effects on TMS and OI but a non-significant effect on AC.

Practical implications
In addition to providing novel theoretical insights on supply chain flexibility, the findings have practical implications for supplier selection and buyer-supplier relationship management.

Originality/value
Overall, the study highlights the impacts of relational capabilities on adopted operational strategies such as flexibility, buyer-supplier relationships, and retail performance.
Original languageEnglish
Pages (from-to)343
Number of pages362
JournalInternational Journal of Operations and Production Management
Volume37
Issue number3
Early online date6 Mar 2017
DOIs
Publication statusPublished - Mar 2017

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