Luzzini2015 (CIN)

IMM-07139; No of Pages 12
Industrial Marketing Management xxx (2015) xxx–xxx
Contents lists available at ScienceDirect
Industrial Marketing Management
The path of innovation: purchasing and supplier involvement into new

product development
Davide Luzzini a,⁎, Markus Amann b,1, Federico Caniato c,2, Michael Essig b,3, Stefano Ronchi c,4
a
Audencia Nantes School of Management, PRES LUNAM, 8 route de la Jonelière, 44312, Nantes, France
b
Universität der Bundeswehr München, Werner-Heisenberg-Weg 39, 85577 Neubiberg, Munchen, Germany
c
School of Management, Politecnico di Milano, Via Raffaele Lambruschini, 4, 20156 Milan, Italy
a r t i c l e i n f o a b s t r a c t
Article history: This paper aims to investigate the effects of supplier collaboration on the firm innovation performance as well as
Received 13 February 2014 the enabling characteristics of the purchasing function. This is an original contribution as few papers empirically
Received in revised form 3 October 2014 test the effect of supplier collaboration (meant as supplier involvement, development, and integration) on inno-
Accepted 8 January 2015
vation performance and — simultaneously — the contribution of strategic sourcing activities and purchasing
Available online xxxx
knowledge. Also, we explore the technological uncertainty of the purchase as an important contingent factor
Keywords:
that might influence the firm's innovation strategy and the emphasis on supplier collaboration or strategic
Innovation sourcing.
Supplier collaboration Towards this end, we develop a theoretical framework and test it through a survey conducted on a sample of 498
Strategic sourcing companies worldwide. Results show that innovation, as a category priority, does lead to emphasize supplier col-
Purchasing knowledge laboration and strategic sourcing which, in turn, ensure better innovation performance. Empirical evidence also
Technological uncertainty shows that, on the one hand, adequate purchasing (managers) knowledge enables greater supplier collaboration
and strategic sourcing; on the other hand, technological uncertainty put greater emphasis on innovation strategy
as well as on strategic sourcing.
© 2015 Elsevier Inc. All rights reserved.
1. Introduction a crucial role in improving firms' innovation performance (e.g., Clark,

1989; Handfield, Ragatz, Petersen, & Monczka, 1999): they know their
“[C]ompanies rarely innovate by themselves” (Edquist, 1997): inno- customers' business and mechanisms for knowledge transfer from
vation is the product of a network rather than of a single person or firm. supplier to customer are typically in place (Yu, 2008). Suppliers' contri-
As a matter of fact, the open and collaborative innovation paradigm rep- bution assumes various forms, such as supply of innovative components
resents a way to support the innovation effort by accessing external re- and product/process technologies (Walter, 2003), or joint product
sources (e.g., knowledge, technology, human workforce) that the focal development projects (Bonaccorsi & Lipparini, 1994). Earlier and more
firm might lack (Chesbrough & Crowther, 2006; Pisano & Verganti, extensive supplier involvement emerged as one of the most effective
2008). This study focuses on new product development (NPD) capabil- ways to improve NPD process performance (Clark, 1989; Ragatz,
ities, which is one of the facets of innovation.5 Handfield, & Petersen, 2002). However, engaging suppliers into collab-
In this context, supplier and —later — purchasing department in- orative innovation is not so easy to achieve (Krause, 1999; Smals &
volvement into innovation processes has been recognized as a potential Smits, 2012). Firstly, the availability of highly-skilled suppliers is not
source of sustainable competitive advantage, even though the literature is sufficient per se: both buyer and supplier must be willing to participate
not fully consistent. Among external sources of innovation, suppliers have into shared NPD projects and possess the necessary experience and
capabilities to do so (Monczka, Handfield, Scannell, Ragatz, & Frayer,
2000; Schiele, 2006). Secondly, the interest in the subject by an in-
⁎ Corresponding author. Tel.: +33 02 4037 44653.
creasing number of firms, the concentration of supply markets, the
E-mail addresses: dluzzini@audencia.com (D. Luzzini), markus.amann@unibw.de
(M. Amann), federico.caniato@polimi.it (F. Caniato), michael.essig@unibw.de (M. Essig), increasing outsourcing/offshoring rate are shifting the bargaining
stefano.ronchi@polimi.it (S. Ronchi). power from buyers to suppliers, who become highly selective and
1
Tel.: +49 89 6004 4219. resistant to adapt to customers' requests (Christiansen & Maltz, 2002).
2
Tel.: +39 02 2399 2801. In order to have access to the best resources, such as brainpower, the
3
Tel.: +49 89 6004 4221.
4
Tel.: +39 02 2399 2802.
customer must increase its level of attractiveness (Schiele, Veldman, &
5
For an exhaustive review of different meanings of innovation and innovativeness the Hüttinger, 2011). Firms' top management is therefore dedicating more
reader might refer to Garcia and Calantone (2002). resources to engage suppliers beyond traditional power-dominated
http://dx.doi.org/10.1016/j.indmarman.2015.02.034
0019-8501/© 2015 Elsevier Inc. All rights reserved.
Please cite this article as: Luzzini, D., et al., The path of innovation: purchasing and supplier involvement into new product development, Industrial
Marketing Management (2015), http://dx.doi.org/10.1016/j.indmarman.2015.02.034
2 D. Luzzini et al. / Industrial Marketing Management xxx (2015) xxx–xxx
relations (Cox, 2001) and to enhance their knowledge of supply theorize that purchasing knowledge is key to make the most of the
markets as well as capabilities of scouting appropriate suppliers, firm's supply base as it facilitates both supplier collaboration and strate-
i.e., suppliers with the right skills (Modi & Mabert, 2007). gic sourcing efforts. Moreover, we consider the firm's innovation strate-
A naturally consequent stage of research investigates what role the gy as an important enabler of supplier collaboration and strategic
purchasing department plays in innovation, as it has become the com- sourcing. We test our theoretical model by means of structure equation
mon interface with the supply base (Araujo, Dubois, & Gadde, 1999; modeling using data collected with a survey of 498 international firms.
Ellram & Pearson, 1993). Firms increasingly recognize a strategic role In the next section the theoretical background and research hypoth-
to the purchasing department, which manages firm's expenditures eses are explained, followed by the research method (i.e., the survey
(normally accounting for more than 50% of the firm's turnover) together and measures used). The last three sections present data analysis, dis-
with internal customer departments. Therefore, today the goals of the cuss results, and summarize main conclusions respectively.
purchasing department go well beyond savings and costs reduction.
While standard and easy-to-find purchasing categories do require cost
minimization, critical categories emphasize other competitive priorities,
such as quality, flexibility, and innovation (Luzzini, Caniato, Ronchi, &
Spina, 2012).
Although the literature recognizes that the purchasing department 2. Theoretical background
might represent a critical cornerstone for adapting innovation from sup-
pliers and stewarding it through the product lifecycle, a broad empirical Compared to the widespread literature on supplier involvement and
analysis of supplier and purchasing involvement on the innovation per- its potential benefit on the NPD process, relatively smaller and more re-
formance is still missing. So far, the literature focuses on adequate orga- cent attention has been paid to the role of the purchasing department,
nizational setting (McGinnis & Vallopra, 1999a), production process which is increasingly taking the lead in the management of supply rela-
development/improvement (McGinnis & Vallopra, 1999b), or the influ- tionship. It is still not clear whether or not the purchasing department
ence on organizational financial performance (Carr & Pearson, 2002). significantly contributes to the innovation outcomes (Mendez &
Table 1 summarizes the (chrono)logical trend in the literature described Pearson, 1994); more specifically, we wonder whether or not purchas-
above that leads to emphasize our perspective about NPD. ing professionals' knowledge facilitate the process of supplier involve-
Complementary to the majority of existing research, this study ment and therefore the firm capability to innovate.
investigates the antecedents of purchased product and service innova- CAPS research (2011) emphasizes the relevance of supply network
tion considering both supplier and purchasing related factors as well relationships as a mean to speed up innovation ideas to commercializa-
as their mutual relations. We consider the supplier's role by including tion. The proposed set of main supply strategies contains the crucial as-
supplier collaboration as a key variable to achieve innovation, whereas pects addressed by this study: robust category strategy development
the purchasing's role is modeled through strategic sourcing. We also and execution; early supplier involvement in new product develop-
ment; supplier relationship management with a focus on trust build-
ing and communication to develop preferred customer status and
Table 1 first access to supplier innovations; supply base management to as-
Selected literature on collaborative NPD. sure access to a “bookshelf” of key suppliers with leading innovation
capabilities; equitable contracting and risk/reward approaches; sys-
Stream Content Authors
tems and processes to acquire, evaluate and implement supplier
Open and Innovation is the outcome of a Chesbrough and Crowther innovations.
collaborative collective effort rather than the (2006), Edquist (1997),
innovation product of single person or Freeman and Soete (1997),
Our theoretical framework grounds on the Resource Based View of
firm. Parker (2000), Tether (2002) the firm (RBV) and some related perspectives such as the extended
Role of Among the possible sources of Anderson and Weitz (1992), RBV, Dynamic Capabilities, and the Knowledge Base View (KBV). RBV
suppliers in innovation outside the firm's Bozdogan et al. (1998), Clark suggests that possessing resources that are rare, inimitable and non-
innovation boundaries, suppliers are one (1989), Das et al. (2006),
substitutable can lead to competitive advantage and better performance
of the most valuable. Suppliers' Dowlatshahi (1998), Frohlich
engagement might have and Westbrook (2001), (Barney, 1986, 1991). This kind of resources is commonly owned by a
different forms, such as: Handfield et al. (1999), Henke firm but can also be acquired from suppliers. Furthermore, they might
and Zhang (2010), Jayaram be physical assets but also knowledge and capabilities of people work-
and Tan (2010), Johnsen ing inside the firm. However, according to Day and Wensley (1988),
• Supplier involvement into
(2009), Koufteros et al.
NPD;
(2007), Krause and Wagner
not only does a firm need to attain superior resources but it also needs
• Supplier development; to convert those resources into positional advantages (such as cost re-
(2008), Lindner et al. (2003),
• Supplier integration.
Nellore (2001), Petersen et al. duction, faster delivery, or higher innovation). Positional advantages
(2003), Ragatz et al. (1997), offer value added benefits that customers would pay a price premium
Wagner and Hoegl (2006),
to obtain, and thus enable a firm to achieve superior performance
Wynstra et al. (2003)
Role of The purchasing department is Carr and Pearson (2002), (Song, Song, & Di Benedetto, 2011).
purchasing in the natural Lakemond et al. (2001), Innovation can be considered a positional advantage and is precur-
innovation interface/coordinator of the McGinnis and Vallopra (2001), sor of success (Chen, Damanpour, & Reilly, 2010; Henard & Szymanski,
supply base, therefore it must Schiele (2010), van Echtelt 2001; Song & Parry, 1999; Song et al., 2011; Swink & Song, 2007). We
be capable to take part into et al. (2008), Wagner (2003),
NPD activities. Wynstra et al. (1999, 2003),
therefore focus on two possible antecedents (i.e., sources of advantage):
Wynstra and Ten Pierick supplier collaboration and strategic sourcing, which are in line with the
(2000), Wynstra et al. (2001) RBV and the abovementioned derivatives (e.g. Ramsey, 2001). Also, we
Role of supplier Supplier and purchasing Carr and Pearson (2002), argue that possessing compelling purchasing knowledge is an impor-
and involvement together are McGinnis and Vallopra (1999a,
tant enabler of both sources of advantage. In our view, the skills and
purchasing understood as a strategic 1999b)
involvement instrument taking effect on the competences of purchasing managers only influence innovation out-
financial performance, comes in an indirect way through the collaboration with suppliers and
organizational settings or strategic sourcing related to NPD. Finally, we include innovation strate-
production process gy as the factor leading to look for specific sources of advantage. The
improvements.
resulting theoretical model is shown in Fig. 1.
D. Luzzini et al. / Industrial Marketing Management xxx (2015) xxx–xxx 3
Context Drivers Sources Positional

of advantage advantage
Supplier
Collaboration
H1b H2 H4
Technological Innovation Purchasing Innovation

Uncertainty Strategy Knowledge Performance
H1a H3 H5
Strategic
Sourcing
Fig. 1. Theoretical model.
2.1. Effect of innovation strategy on supplier collaboration and strategic processes and capabilities should be considered by firms willing to fos-
sourcing ter innovation (Carr & Pearson, 2002; Lakemond, Echtelt, & Wynstra,
2001; van Echtelt et al., 2008; Wynstra, Weele, & Axelsson, 1999). This
When innovation is considered as a competitive priority, it is expect- view is also backed up by the increasing attention to strategic purchas-
ed to be transferred from business to purchasing and ultimately to the ing as a powerful determinant of the firm overall performance (e.g.
category level, leading to emphasize supply management in order to Chen, Paulraj, & Lado, 2004; Hartmann, Kerkfeld, & Henke, 2012).
improve component innovation rate and time-to-market (Bidault, Therefore, we expect that:
Butler, & Despres, 1998). The design of this strategic fit is a key element
of dynamic capabilities in terms of sensing, seizing and reconfiguring H1a. A higher emphasis on innovation strategy positively influences the
supply resources in dependence to specific business environments effort on strategic sourcing.
(Teece, 2010). As for supplier collaboration, a wide body of literature acknowledge
As for the practices that follow an innovation strategy, van Echtelt, the need to collaborate with suppliers when innovation is at stake (see
Wynstra, van Weele, and Duysters (2008) suggest that “the process of Table 1). Indeed, suppliers own relevant and complementary knowl-
selecting the suppliers and determining their extent of involvement edge to the buying firm's; they know the customer's internal processes
are critical in anticipating and addressing the technical and organiza- and products, especially in the case of long-term relationships; they
tional risks associated with particular choices about suppliers and work- possess specific assets and resources. Through this, during the NPD
load outsourcing”. phase, suppliers are able to anticipate constraints that might cause
The authors propose to distinguish between an operational, project- problems during the production phase, to speed up the development
related, short-term setting and a strategic, long-term-oriented setting. activities, to reduce development costs, and to improve the output qual-
The former setting represents the engine to effectively set up and man- ity, for the benefit of both parties. Therefore, we expect that:
age joint buyer–supplier development projects and include several pro-
cesses, such as coordinating development activities with suppliers, H1b. A higher emphasis on innovation strategy positively influences the
feeding back supplier performance, or designing communication inter- effort on supplier collaboration.
face with suppliers. The latter setting reflects the planning, execution,
and evaluative stages in developing policies and the desired supplier
base. Activities included are, for instance, monitoring supply markets, 2.2. Effect of purchasing knowledge on supplier collaboration
pre-selecting suppliers for NPD, and periodically evaluating guidelines
and supply base performance. Both sets of processes, implemented as Scholars representing the extended RBV argue that competitive
permanent activities, can contribute to improved collaboration results. advantage is derived from both internal and external assets (Squire,
We might therefore link the company orientation to innovation to two Cousins, Lawson, & Brown, 2009). More specifically, authors suggest
main processes characterizing the purchasing activity (i.e., strategic that external integration requires specific internal capabilities
sourcing and supplier collaboration) as they are determinants of NPD (Koufteros, Vonderembse, & Jayaram, 2005). In particular, some studies
outcomes. Strategic sourcing includes processes associated with the shed light on the role of the purchasing department in managing
strategic setting, whereas supplier collaboration reflects the operational supplier involvement and the conditions enabling its effective in-
setting. volvement in product development (Anklesaria & Burt, 1987;
Most of the literature is consistent with this view. As for strategic Atuahene-Gima, 1995; Dowlatshahi, 1992; van Echtelt et al., 2008).
sourcing, authors generally consider purchasing integration in product Among other organizational units, the purchasing department
development as equivalent to managing supplier involvement in new often takes the role of relationship manager (Dowlatshahi, 1992)
product development projects. However, further attention should be and participates to supplier involvement in NPD (Bonaccorsi, 1992;
paid to long-term strategic issues, such as supply market analysis, Hakansson & Eriksson, 1993; Wognum, Fisscher, & Weenink, 2002).
definition of the sourcing strategy, and supplier selection (Wynstra, On the one hand, Lakemond et al. (2001) define different configura-
Weggeman, & Van Weele, 2003). So, a wider set of purchasing-related tions for purchasing integration into NPD. On the other hand, some
authors investigate the role of purchasing for effective supplier inte- 2.4. Effect of supplier collaboration on innovation performance
gration (McGinnis & Vallopra, 2001; Schiele, 2010; Wagner, 2003;
Wynstra et al., 2003). The literature largely confirms that companies increasingly rely on
Few authors (e.g., Atuahene-Gima, 1995; Nijssen, Biemans, & De their supply base to achieve innovation (Chen et al., 2010; Inemek &
Kort, 2002) study driving factors such as the skills of buyers and Matthyssens, 2012; Koufteros & Marcoulides, 2006; Petersen,
top management commitment. As suppliers are increasing their impor- Handfield, & Ragatz, 2005; Primo & Amundson, 2002). These studies,
tance for manufacturers due to the increasing incidence of purchases however, mainly regard large firms and provide mixed results. It is
(Roberts, 2001), purchasing capabilities become crucial (Gadde & known, for instance, that failure rates in NPD might even approach
Håkansson, 1994; Macbeth, 1994), especially in the context of NPD 80% (Cooper, 1999). This is worrisome, given that a large share of firm
collaborations (Anderson & Dekker, 2005). According to Wynstra et al. value comes from newly developed products or services (Birou &
(1999) and Wynstra, Van Weele, and Weggemann (2001), successful Fawcett, 1994; Dowlatshahi, 1998; Mahajan & Wind, 1991). Consider-
supplier integration is ensured by the organization of the purchasing ing the increasing outsourcing rate (Quinn & Hilmer, 1994), it is not sur-
department and adequately skilled human resources. Similarly, other prising that research on supplier collaboration has greatly expanded
authors conclude that the likelihood of supplier involved at early stages during the last 30 years. In particular, scholars have been focusing on
of NPD increases when purchasing professionals have a good recogni- different facets of collaborations, including supplier involvement in
tion by top management (Hillebrand & Biemans, 2004), are part of NPD, supplier development, and supplier integration.
the development team (Tracey, 2006), and participate to strategic plan- Supplier involvement in NPD concerns the integration of suppliers'
ning processes (Schiele, 2010). However, a function's role is strictly capabilities into NPD projects (Dowlatshahi, 1998), the tasks they are
connected to the level of knowledge and skills owned by its human re- able to carry out on behalf of the customer, and the responsibilities
sources which is again in line with the KBV (Grant, 1996; Jackson, Hitt, & they assume for the development of a part, process or service (van
DeNisi, 2003). Echtelt et al., 2008). On the one hand, supplier involvement potentially
In summary, we expect that the more buyers are competent, special- results in lower costs, higher quality, faster NPD time, and so on (see for
ized, and skilful, the more they will contribute to the NPD process by instance Clark, 1989; Petersen, Handfield, & Ragatz, 2003; Ragatz et al.,
helping firms to successfully involve suppliers (Schiele, 2006; Wynstra 2002; Wagner & Hoegl, 2006). On the other hand, longer development
et al., 2001, 1999). Although NPD projects have unique outputs, NPD ac- times and increased costs (Ragatz, Handfield, & Scannell, 1997) as
tivities represent an iterative process and firms can build capabilities in well as dissatisfaction with NPD outcomes (Handfield et al., 1999)
this regard. In particular, a connection between supplier involvement might occur.
and purchasing human resource's skills and know-how should be plau- Supplier development involves a short-term sacrifice by the buying
sible: skilled purchasing professionals are more likely to be involved in firm and the supplier; both firms must allocate resources and personnel
the development team and to support coordination with other partners. time to the effort. Supplier development is defined as the set of activities
Therefore we state the following hypothesis: undertaken by the buying firms in their efforts to measure and improve
the products or services they receive from their suppliers and is associat-
H2. A higher level of purchasing knowledge positively influences the effort ed with supplier performance improvement (Prahinski & Benton, 2004).
on supplier collaboration. Finally, we know that the NPD process can benefit from supplier in-
tegration, that is the extent to which a firm is strategically interconnect-
2.3. Effect of purchasing knowledge on strategic sourcing ed and aligned with its supply chain partners (Das, Narasimhan, &
Talluri, 2006; Jayaram & Tan, 2010). Multiple studies associate the sup-
Since the early definitions of strategic purchasing (e.g. Carr & plier integration with increased performance (e.g., Braunscheidel &
Smeltzer, 1997; Ellram & Carr, 1994), the literature clearly suggests Suresh, 2009; Flynn, Huo, & Zhao, 2010; Frohlich & Westbrook, 2001;
the possibility for the purchasing department to improve the firm's suc- Ragatz et al., 2002; Wong, Boon-itt, & Wong, 2011; Zhao, Huo, Selen, &
cess by actively managing the supply base and by acting as an equal Yeung, 2011). In general, scholars argue that benefits of integration out-
partner with other peer departments. However, this is not the case for weigh its associated costs, leading to greater operational performance
any firm. The chance to leverage purchasing as a strategic weapon sig- (Koufteros, Edwin Cheng, & Lai, 2007; Primo & Amundson, 2002; Song
nificantly rests on the capabilities of the purchasing department person- & Di Benedetto, 2008).
nel (Reck & Long, 1988). Indeed, purchasing knowledge and skills are All in all, we assume that supplier collaboration enhances the firm's
required for purchasing to effectively perform as a strategic function innovation performance. Indeed, the literature reports several potential
(Rajagopal & Bernard, 1993). For example, strategic purchasing func- advantages related to supplier collaboration, including: improved effi-
tions are expected to have knowledge of their external supplier envi- ciency and effectiveness of future project collaboration (Dyer & Ouchi,
ronment, knowledge of their internal customer's environment, and 1993), alignment of technological strategies with suppliers (Bonaccorsi,
knowledge of the firm's strategic goals. Necessary skills include analyt- 1992), better and faster access to technological resources and knowledge
ical skills, communication skills, and general management skills (Bonaccorsi, 1997; Ragatz et al., 1997), lead time reduction (Clark, 1989;
(Keough, 1994; Van Weele, 1984). Ragatz et al., 1997; Wasti & Liker, 1997), reduced development costs and
As a consequence, in our study, we assume that knowledgeable and time (Clark, 1989; Hartley, 1997), better product performance and de-
mature purchasing professionals are likely to invest a greater portion of sign (Bonaccorsi & Lipparini, 1994; Kamath & Liker, 1994; Ragatz et al.,
their time in strategic activities (such as market scouting and 1997), and better product quality (Dowlatshahi, 1992). In particular,
contracting) rather than operational and administrative ones (such as we ground on studies showing that supplier collaboration could shorten
order emission and payment) (Chen et al., 2004). Monitoring the supply development cycle time (Chen et al., 2010; Millson, Raj, & Wilemon,
market and constantly scouting for new sources of innovation are strict- 1992; Song & Parry, 1999). Failure to involve supplier in production de-
ly dependent upon the availability of suitable knowledge and skills cisions may lead to high costs and low production capacity (Chen et al.,
within the purchasing department. As a matter of fact, inexperienced 2010). Further, supplier collaboration enables product differentiation
and unskilled buyers are expected to take care of clerical rather than by obtaining information and expertise regarding new ideas and tech-
highly value adding activities (Cousins & Spekman, 2003). We are there- nologies that can help developing a highly innovative product (Song &
fore expecting that: Di Benedetto, 2008). In other words:
H3. A higher level of purchasing knowledge positively influences the effort H4. A greater effort on supplier collaboration positively influences innova-
on strategic sourcing. tion performance.
2.5. Effect of strategic sourcing on innovation performance database. The overall sample is made of 681 usable responses corre-
sponding to an average response rate of 10%, which is reasonable
As noted previously, van Echtelt et al. (2008) distinguish between considering the length of the survey. However, only 498 companies
operational and strategic processes for supplier involvement: not only provided sufficient information to test the hypotheses stated above
NPD requires to jointly perform operational activities with suppliers; (we excluded answers provided by companies that are not performing
strategic sourcing as an antecedents of NPD performance should also supplier collaboration and strategic sourcing processes as related to
be considered. items in Table 3). The targeted companies are of various sizes and are
Strategic sourcing refers to activities like reverse marketing and sup- mostly from the manufacturing sector, even if other industries are
plier selection. Monitoring the supply market let the firm access innova- well represented. Non-respondent bias was tested by identifying the
tion by establishing a set of suppliers aligned to the technology roadmap differences between the first wave of respondents and later returns
and, at the same time, maintain the appropriate range of bookshelf tech- (Scott & Overton, 1977). The ANOVA shows no significant differences
nologies that might affect the market (Monczka et al., 2000). Johnsen in terms of company size and sectors distribution. In addition, the ten
(2009) shows that the latest research about collaborative NPD empha- country-specific subsamples were also proved to be appropriate in
sizes the need for supplier selection (e.g., Schiele, 2006; Song & Di terms of pooling (Knoppen et al., 2015). See Appendix A for further de-
Benedetto, 2008) as well as relationship development and adaptation tails on the sample.
(e.g., Petersen et al., 2003; Primo & Amundson, 2002; Ragatz et al., The core part of the survey focuses on a single purchasing category,
2002). Petersen et al. (2005) note that selecting the “right” supplier autonomously selected by the respondent. This choice is due to the fact
(good match of capabilities and culture) leads to improved perfor- that companies frequently buy differently by category (i.e., a specific
mance. We therefore expect that: group of items, also known as a “purchasing group” or “commodity”).
For instance, differences are noted between direct and indirect goods
H5. A greater effort on strategic sourcing positively influences innovation and among categories that are positioned differently within the Kraljic
performance. matrix (Kraljic, 1983). Yet, this is a quite rare approach in Purchasing
and Supply Management research, which generally refers to the overall
activity of the function. In our sample, respondents mainly address
3. Methodology direct expenditures (about 80% of cases), whereas indirect (15%) and
capital (5%) expenditures are less represented. Moreover, categories
3.1. Sample and data collection are homogeneously spread across different types in terms of strategic
importance and supply risk, with a prevalence of strategic items.
The hypotheses were tested using data collected in winter 2009/2010 Our focus on the category level is also original in respect the NPD lit-
in ten countries in Europe and North America (Canada, Finland, France, erature, which often investigates single one-shot projects aimed at de-
Germany, Italy, the Netherlands, Spain, Sweden, United Kingdom, and veloping specific products or services. Even though this perspective is
the United States of America) through an online survey questionnaire consistent with the idea that different categories should be studied sep-
about purchasing priorities, purchasing practices, and purchasing perfor- arately, it does not allow to generalize conclusions beyond the horizon
mance, using constructs derived from the literature. of the specific project. In other words, if a firm successfully manages
The English version of the questionnaire was translated into differ- the redesign of a specific component together with its supplier, nothing
ent languages using the TRAPD (Translation, Review, Adjudication, can be said about the next change of specifications, as one project is dif-
Pre-testing and Documentation) procedure (Harkness, Pennell, & ferent from the other. Instead, by focusing on the category level we as-
Schoua-Glusberg, 2004) and subsequently tested by submitting it to a sess which practices the firms put in place and which results are
couple of purchasing executives in each country to check the clarity of obtained each time a given category is subject to NPD.
the questions. Before and during the pre-testing phase a special empha- Given that we relied on a single respondent design, we controlled for
sis was laid on the quality of the construction of questions in order to re- common method bias in two ways: through the design of the study and
duce potential bias resulting from respondents' misleading cognition through statistical control (Podsakoff, MacKenzie, Lee, & Podsakoff,
(Poggie, 1972; Schwarz & Oyserman, 2001). In particular, we tried to 2003). Regarding the survey, the research project was labeled as a
concentrate our questions on observable data and to exclude every pos- broad overview of purchasing management and purchasing practices
sible scope of interpretation. The final version of the survey tool was adoption. Therefore no explicit reference to the intention to test ante-
uploaded onto the project web-site and made visible only to respon- cedents of innovation performance was evident. Thus, respondents'
dents selected in the sampling procedure. The Internet survey offers attention was not drawn to the relationships being targeted in this
higher levels of accuracy and reduces missing values due to either the study. Questions including items and constructs related to each other
respondent or some data entry mistakes (Boyer et al., 2002). Firms in the general model were also separated in the questionnaire in order
were sampled from the membership lists of the corresponding national to prevent respondents from developing their own theories about pos-
purchasing associations. Sampling criteria were pre-agreed among the sible cause–effect relationships. Furthermore, the questionnaire was
participating researchers. 65.7% of the companies in the sample are carefully created and pretested and respondents were assured of strict
from the manufacturing sector, even though other industries are repre- confidentiality. Finally, we used different scales and formats for the in-
sented (see Appendix A). The corresponding firms were first contacted dependent and the criterion measures (Podsakoff et al., 2003). As a sec-
and asked for participation. Reminder e-mails and telephone calls were ond mean to ensure against common method bias, we examined the
conducted after four weeks to those who had not responded. Following unrotated factor solution (Podsakoff & Organ, 1986). We were able to
other similar key informant-based research studies (Cini, Moreland, & determine four factors that account within a range of 6 to 28% for the
Levine, 1993; Cousins, 2005), the goal was to find the right person with- variance in the measures. Consequently, neither a single nor a general
in the organization who was able to respond to all of the questions factor is likely to account for the majority of the covariance among the
about the purchasing strategy, the buyer–supplier relation, purchasing measures.
practices and performance. For this reason, mostly CPOs, VPs of Purchas-
ing, Purchasing Directors and Purchasing Managers were involved. The 3.2. Measures and their analysis
respondents consisted of highly qualified purchasing professionals who
had played important roles in the purchasing functions of their firms. Hypotheses were tested using structural equation modeling (SEM)
After the data collection process, each country cleaned its own data in with the maximum likelihood (ML) estimation method. Most SEM appli-
accordance with a common agreement to build a shared international cations described in the literature are analyzed with this methodology.
The hypothesized model was tested statistically in a simultaneous anal- order fulfillment process”. This reflects the intention to assess the qual-
ysis of the entire system of variables to determine the extent to which it ity of the buyer–supplier relation in processes that can typically affect
was consistent with the data. Where goodness-of-fit is adequate, the innovation performance (e.g. Chen et al., 2010; van Echtelt et al.,
model can be seen as a plausible explanation of postulated interactions 2008; Zhao et al., 2011). Similarly, strategic sourcing has been measured
between constructs. The research model is analyzed and interpreted se- by asking the “level of formalization of the process (i.e., to what degree
quentially: first the assessment of the reliability and validity of the mea- the process is guided by written rules and procedures) for the chosen
surement model and secondly the assessment of the structural model category” for: “Supply market analysis: the process of analyzing the sup-
(Hulland & Lam, 1996). Amos version 18 was used to estimate both the ply market for the chosen category (e.g. searching for new suppliers,
measurement model and the structural model. The ML algorithm was supply market structure, technological developments, price develop-
used to obtain the paths, the loadings, the weights, and the quality ments)”, “Spend analysis: the process of analyzing the purchasing
criteria. The operationalization of the constructs is based on existing spend of the chosen category (e.g., current spend, spend developments,
measures, using six and seven point semantic differential scales. Con- contract compliance)”, “Sourcing strategy: the process of formulating a
structs validity and reliability are detailed in Tables 3 and 4. sourcing strategy for the chosen category”, “Supplier selection and
In addition to the main variables in the model, we believe that tech- contracting: the process of sending out request for quotations, tender-
nological uncertainty is a powerful control variable that must be consid- ing/negotiating, and selecting suppliers for the chosen category”. This
ered. Several studies emphasize the role technological uncertainty plays reflects how much is the firm serious about strategic sourcing, provided
in stressing innovation as a critical success factor to compete, as well as that the level of formalization is a good proxy of the firm's effort in these
the need to access other partners' know-how and complementary processes (Juha & Pentti, 2008; Kim, 2007; McCabe, 1987; Miller, 1982).
technologies (e.g. Lancioni & Chandran, 2009; Martín-de-Castro, The measurement of purchasing professionals' knowledge is based
Delgado-Verde, López-Sáez, & Navas-López, 2010). For example, involv- on the approach of Tu, Vonderembse, Ragunathan, and Sharkey
ing key suppliers early in NPD allows organizations to hedge its (2006), who understand manager knowledge as a vital element of
exposure against technological risk by improving the integration capa- absorptive capacity. According to this, respondents were asked to rank
bility of new technologies into final products (Bozdogan, Deyst, & “The knowledge of purchasing manager(s) when making business deci-
Hoult, 1998; Ettlie & Pavlou, 2006), and creating a bookshelf of embry- sions”, “The knowledge of purchasing manager(s) when dealing with
onic technological innovations that may result useful in the future new technologies”, “The knowledge of purchasing manager(s) when
(Schilling, 2008, chap. 8). Similarly, Ragatz et al. (2002) along with managing daily operations”, and “The knowledge of purchasing
Powell, Koput, and Smith-Doerr (1996) conclude that NPD collabora- manager(s) when dealing with human issues (e.g. human resource
tion is particularly important in a context characterized by rapid techno- management, internal and external communications)” each from 1
logical change as it allows leveraging on suppliers knowledge and (“Totally inadequate”) to 6 (“Totally adequate”).
expertise. In the context of this study, we expect that different levels Finally, in order to test the innovation outcomes of supplier involve-
of technological uncertainty (meant as novelty and rate of change of ment we referred to the established literature, which suggests that sup-
the technology involved in the category for the buying firm) might in- pliers' contribution is expected to speed-up the development process
fluence both the category strategy and practices. Consequently, we and to improve products/services (either in term of costs or quality)
use technological uncertainty as a control variable in order to validate (Clark, 1989; Koufteros et al., 2007; Primo & Amundson, 2002). In
the explanatory power of our research framework, for instance in order to limit the number of items considered without neglecting con-
terms of the scientifically confirmed effect of technological uncertainty structs reliability we condensed some of the measures used by scholars:
on supplier collaboration. respondent have been asked to what extent category performance im-
The operationalization of category technological uncertainty is proved compared to management targets on a Likert-like scale form 1
based on the approach of Ragatz et al. (2002) and Powell et al. (1996). (“Much worse than target”) to 7 (“Much better than target”).
According to this, each respondent had to rate “The extent to which After the data collection we verified the measures by assessing reli-
technologies in this category are new” to his firm, “The extent to ability and unidimensionality of each of the five constructs, i.e. item-to-
which technologies change in this category” and “The extent to which total correlations within each construct were examined (Churchill,
products/services are new” to his firm from 1 (“Extremely low”) to 6 1979). In terms of structural equation modeling we followed the two
(“Extremely high”). steps of Anderson and Gerbin (1988). Our measurement model was
In order to measure the category innovation strategy we followed tested with AMOS 18.0 using the maximum likelihood method
the approach proposed by Hayes and Wheelwright (1984), who consid- (Arbuckle, 2009) and is able to provide to a great extent discriminant
er strategy as a mix of competitive priorities. Innovation as a category validity as well as convergent validity (Anderson & Gerbin, 1988;
priority can therefore be measured by looking at the rate of introduction Bagozzi & Yi, 1988; Fornell & Larcker, 1981). Only the composite reli-
of new product/services and time to market (Lagacé & Bourgault, 2003; ability (CR) of one construct measured is slightly below .70, but still ac-
Ward et al., 1998). Respondents were asked to provide answers on a ceptable following Nunnally (1994). CR values of the remaining
Likert-like scale ranging from 1 (“Not at all”) to 6 (“Completely”) re- constructs attest to a great extent internal consistency of the measure-
garding to what extent the management had emphasized the need to ment. The average variance extracted for innovation performance is
“improve time-to-market with suppliers” and “improve introduction below the threshold of .50 (Bagozzi & Yi, 1988; Fornell & Larcker,
rates of new/improved products/services” during the previous two
years for the chosen category. Supplier collaboration has been measured
Table 2
by asking respondents to use a Likert-like scale to rate from 1 (“Ex-
Correlation matrix.
tremely low”) to 6 (“Extremely high”) the “level of proficiency of the
process (i.e., the level of quality in executing the process)” for the fol- Variables 1 2 3 4 5 6
lowing processes: “Supplier development: the process of selecting sup- 1. Technological uncertainty .721
pliers for the chosen category as candidates for supplier development, 2. Innovation strategy .424** .854
3. Supplier collaboration .174 ns .355*** .775
and assisting suppliers in quality and cost improvement projects”, “Sup-
4. Strategic sourcing .259** .226* .424*** .825
plier involvement into NPD: the process of managing the involvement of 5. Purchasing knowledge .047 ns .146 ns .362** .303** .739
suppliers in the development of (new) products/services/processes/ 6. Innovation performance .146 ns .225** .426*** .303*** .260 ns .676
technologies for the chosen category”, “Supplier integration in order ful- The square root of the average variance extracted (AVE) is shown in boldface on the diag-
fillment: the process of integrating suppliers for the chosen category in onal. Correlations are in the lower triangle of the matrix.
operations (e.g. joint production or inventory planning) and/or in the The significance level of correlation is show as follows: ***p b .001, **p b .01, *p b .05.
Table 3
Results of confirmatory factor analysis.
First-order construct Indicator Loading Mean Std dev. CR AVE
Technological uncertainty Technologies in this category are new to your firm 0.696 2.86 0.89 0.765 0.520
Technologies change in this category 0.728
Products/services are new to your firm 0.739
Innovation strategy Time-to-market with suppliers 0.715 3.47 1.16 0.840 0.729
Introduction rates of new/improved products/services 0.973
Supplier collaboration Supplier development 0.725 4.02 0.88 0.818 0.601
Supplier involvement into NPD 0.851
Supplier integration in order fulfillment 0.744
Strategic sourcing Supply market analysis 0.863 3.77 1.08 0.894 0.681
Spend analysis 0.861
Sourcing strategy 0.865
Supplier selection and contracting 0.699
Purchasing knowledge When making business decisions 0.721 4.61 0.75 0.823 0.547
When dealing with new technologies 0.911
When managing daily operations 0.505
When dealing with human issues 0.763
Innovation performance Supplier time-to-market for new or improved prod./serv. 0.643 4.61 1.00 0.627 0.457
Level of innovation in products/service from suppliers 0.708
Fit indexes: chi-square = 146.1; p-value = 0.027; chi/d.f. = 1.27; CFI = .992; RMSEA = .023.
1981), but none of the constructs violates the Fornell–Larcker criterion. higher emphasis on innovation strategy has a positive impact on strate-
Descriptive statistics and inter-correlations are shown in Table 2. gic sourcing. Our results also provide support for H1a (β = .128, p b .05).
Following the recommendations of Bagozzi and Yi (1988) as well as In regard to the hypotheses H2 and H3 we postulate that a higher
Bagozzi and Baumgartner (1994) the quality of our model can be judged level purchasing knowledge has a positive effect on the supplier collab-
as sufficient. Table 3 comprises further results of the confirmatory factor oration and on strategic sourcing. Our findings indicate that H2 is
analysis (CFA). All items were affirmed through confirmatory factor supported with a parameter estimate of .340 (p b .001) as well as
analysis (Table 3). The model consists of six multi-item constructs hypothesis H3 (β = .296, p b .001). Finally, the hypotheses H4 and H5
with a total of 18 indicators (see Fig. 1). Two possible ways of evaluating follow the argumentation that a higher level of innovation performance
model fit are the use of the chi-square goodness-of-fit statistic and the can be achieved through more emphasis on supplier collaboration and
use of other absolute or relative fit indices (Hu & Bentler, 1998). It is strategic sourcing. Our findings support both H4 (β = .336, p b .001)
quite common in management literature to avoid using the chi-square and H5 (β = .156, p b .014).
p-value as this measure is particularly sensitive to sample size and as- As for technological uncertainty, which we used as a control variable,
sumptions of normality (Hu & Bentler, 1995). As a consequence other we found that a higher level of technological uncertainty has a positive
fit indices are preferred to the p-value. Some authors suggest to check effect on the innovation strategy at the purchasing category level (β =
for the ratio between chi-square value and degrees of freedom in the .435, p b .001). Also, technological uncertainty positively affects strate-
model, where cutoff values range from b 2 to b 5 depending on the in- gic sourcing (β = .197, p b .01), yet not supplier collaboration (β =
vestigator (e.g., Byrne, 1989; Kelloway, 1998). Another way to evaluate .044, p = .476).
the fit of a model is to use fit indices that have been offered to supple- All path significances and coefficients of determination are illustrat-
ment the chi-square. Fit indices range from 0 to 1, with values closer ed in Table 4.
to 1 indicating good fit. Hu and Bentler (1998) recommend MLE-
based fit indices and also suggest a two-index presentation strategy 5. Discussion
with, among others, the comparative fit index (CFI), and Gamma hat
or root mean square error of approximation (RMSEA). An acceptable The study examines innovation outcomes in a business-to-business
threshold for CFI is N 0.95 whereas RMSEA is supposed to be lower context. We consider the perspective of the buying firm that is leveraging
than 0.05. The CFA reveals a sufficient model fit attested through such on its supply base to achieve innovation. In particular, we show that firms
fit indices for the measurement model (Bollen, 1989; Shah & dedicating to innovation not only invest in strategic sourcing (i.e. actively
Goldstein, 2006): χ2 = 146.1; χ2/d.f. = 1.27; RMSEA = .023; CFI = .992. scout and maintain the supply base) but also promote supplier collabora-
tion (i.e. supplier development as well as involvement into the buying
firm's processes). This result is in line with previously separated streams
4. Results of literature. Industrial marketing and purchasing scholars have focused
increased attention on buyer–supplier relationships in industrial markets
The postulated path model produced a sufficient fit to the data during the past decades. On the one hand, suppliers have been conceived
(χ2 = 185.27; χ2/d.f. = 1.557; RMSEA = .033; CFI = .982). Table 4 as main contributors to the new product development process, for the
shows the results of the hypothesis testing.6 benefit of their customers' innovation capabilities. On the other hand,
According to hypothesis H1b, more emphasis on innovation strategy the purchasing function has clearly emerged as a pivotal interface and
leads to a higher effort on supplier collaboration. H1b is supported process owner of collaborative buyer–supplier relationships.
through our results (β = .321, p b .001). Similarly, H1a assumes that a In this regard, our paper contributes to the understanding and man-
agement of business interrelations on both sides, by considering both
outward and inward oriented activities. Not only external suppliers
6
As part of the review process, in order to ensure the reliability of our model, we are an important cornerstone of the buying firm's innovation strategy,
completely re-run all statistical tests through both partial least square regression using but also internal sourcing processes managed by the purchasing depart-
the Smart PLS software and OLS regression using the SPSS software, including control var-
iables on innovation performance related to size and industry of the firm (which we found
ment are at stake.
not significant). Results obtained confirm the validity both of the measures and the struc- The evidence provided about purchasing knowledge further con-
tural model. firms the role played by the purchasing department. Purchasing
Table 4
Path analysis parameter estimates.
Path Standard estimate p-Value Conclusion
Innovation strategy b--- Technological uncertainty .435 ***

Strategic sourcing b--- Innovation strategy .128 .021 Fail to reject H1a
Supplier collaboration b--- Innovation strategy .321 *** Fail to reject H1b
Supplier collaboration b--- Technological uncertainty .044 .476
Strategic sourcing b--- Technological uncertainty .197 .002
Supplier collaboration b--- Purchasing knowledge .340 *** Fail to reject H2
Strategic sourcing b--- Purchasing knowledge .296 *** Fail to reject H3
Innovation performance b--- Supplier collaboration .336 *** Fail to reject H4
Innovation performance b--- Strategic sourcing .156 .014 Fail to reject H5
Fit indexes: chi-square = 185.27; p-value = 0.000; chi/d.f. = 1.557; CFI = .982; RMSEA = .033.
managers possessing a thorough preparation (beyond technical knowl- importance of strategic sourcing as one key process to effectively le-
edge related to their tasks) are able to foster the adoption of both afore- verage the supply base (Lindner, Jarvenpaa, & Davenport, 2003). In
mentioned practices (i.e. supplier collaboration and strategic sourcing), turn, the study also supports the existence of a substantial and posi-
thus ultimately contributing to the innovation outcomes. tive link between purchasing knowledge and both supplier collabo-
Indeed, we clearly assess the beneficial effect of such practices on in- ration (H2) and strategic sourcing (H3). Purchasing managers'
novation outcomes: strategic sourcing and supplier collaboration signif- knowledge emerges as an intangible asset for an effective buyer–
icantly improve the innovation performance the buying firm can get supplier interface. Competent buyers can significantly contribute to
from suppliers. NPD by identifying and selecting valuable supplier knowledge and
Finally, as an important corollary to our results, we also demonstrate consequently fostering promising supplier collaboration (Johnston,
that the firm dedication to innovation and therefore to invest in buyer– 2004; Knudsen, 2007). Therefore, purchasing knowledge should be
supplier collaborative processes is particularly critical in the presence of considered as an important catalyst of buyer–supplier collaborative
high technological uncertainty characterizing the input provided by innovation.
suppliers. Furthermore, our findings support the definition of the aforemen-
These results have important implications for managers and re- tioned practices as good (if not best) practices. Firstly, we are able to
searchers. They can be interpreted both from the perspective of the buy- show that a stronger dedication to supplier collaboration has a positive
ing firm willing to increase the innovation effort and from the impact on innovation performance (H4). Our findings comply with ex-
perspective of suppliers that would like to contribute such effort. Ac- tant literature about supplier collaboration, which might lead to,
cordingly, we discuss theoretical and managerial implications from e.g., better product quality and product performance (Bonaccorsi &
our findings. Lipparini, 1994; Dowlatshahi, 1992; or Ragatz et al., 1997) or better
and faster access to resources/knowledge (Bonaccorsi, 1997). Certainly,
5.1. Theoretical implications successful collaboration with vendors must take various factors into ac-
count, such as tier structure, inter-company communication, intellectu-
Aggregating several empirical studies, Chen et al. (2010) provide al property agreements and degrees of responsibilities for specific tasks
theoretical support to prominent models of new product performance. or the alignment of supplier's capabilities with regard to the degree of
The model we propose (see Fig. 1) is consistent with the strategic orien- supplier involvement (Handfield et al., 1999).
tation and organizational capability model drawn by Kessler and Secondly, innovation performance is influenced through a greater
Chakrabarti (1996) as well as the centrifugal and centripetal model by dedication to strategic sourcing (H5). According to Petersen et al.
Sheremata (2000). Moreover, Chen et al. (2010) argue that it is impor- (2005), selecting the right supplier and integrating the supplier
tant to identify salient and cross-situational factors that facilitate or hin- early into NPD results in a better performance; our findings support
der fast development of new products. To this end, they identify four this causality. In the case of absorptive capacity Chen, Lin, and Chang
groups of NPD speed antecedents (i.e. project, process, strategy, and (2009) identify a positive impact on innovation performance. Refer-
team) that are consistent with the antecedents we are addressing in ring to the approach of Tu et al. (2006) who postulate that (purchas-
this study. Furthermore, instead of considering all antecedents at the ing) manager knowledge is as a vital element of absorptive capacity,
same conceptual level, we argue that a path can be identified among our results suggest an indirect impact of purchasing knowledge on
these antecedents: the latent exogenous variables of our postulated innovation, through supplier collaboration and strategic sourcing. Fi-
model are understood as drivers for the sources of competitive advan- nally and as a matter of fact, the importance of the purchasing
tages and ultimately the success in the field of innovation. Sources of ad- function's role in detecting and promoting innovation potentials
vantages and the positional advantage comprise latent endogenous from the supply market and its influence on NPD outcomes becomes
factors of our causal model, as shown in Fig. 1. evident.
We find largely support for our postulated research model. First- In addition, our analysis is able to identify a definite and positive re-
ly, more emphasis on innovation strategy has a positive effect on the lation between technological uncertainty and innovative strategy, sug-
dedication to supplier collaboration (H1b). When buying strategic gesting that the purchasing department should align its strategy to the
components or services, different collaborations within a develop- supply market and input category characteristics in order to cope with
ment project have to be set up and managed in order to achieve tech- such uncertainty (McIvor & Humphreys, 2004). Interestingly, our re-
nical performance targets and the targeted costs (van Echtelt et al., sults do not support a direct impact on supplier collaboration, but only
2008). As a matter of fact, the literature about business-to-business on strategic sourcing. Firms perceiving high technological uncertainty
relationship largely suggests that suppliers are a key stakeholder of are often facing a radical or disruptive innovation context. As a matter
new product development, even though previous empirical evidence of fact, disruptive technologies usually take place in remote or emerging
was not always straightforward. Similarly, strengthening innovation markets (Christensen & Bower, 1996). In contrast to sustaining techno-
strategy positively influences the dedication to strategic sourcing logical changes that are employed in established markets and where
(H1a). Companies that concentrate on innovation goals increasingly supplier collaboration is an appropriate instrument, disruptive innova-
have to look for help beyond their boundaries. This strengthens the tions often lead to a shift in the market place (Abernathy & Clark,
1985). According to this, sourcing has to consider different eventualities willing to improve innovation performance, the supplier should
for reducing risk and ensuring the required knowledge base in depen- evaluate the customer familiarity with integrated new product de-
dence to the degree of technological uncertainty. For instance, under velopment as well as the status and maturity of the purchasing
the condition of high technological uncertainty multiple sourcing allows function inside the firm. Inter-company processes are more com-
the buying firm to hedge its exposures against technological risk. It plex to manage and sometime backfire affecting performance out-
seems therefore reasonable to assume that — in the presence of high comes. Therefore the supplier should carefully evaluate whether
technological uncertainty — the buying firm will prefer to hedge against or not to commit for an integrated new product development ef-
possible disruptions through appropriate sourcing processes rather fort, making sure that the customer has proper policies and sys-
than through risky collaborations with suppliers. tems in place.
5.2. Managerial implications

6. Conclusion and limitations
From a managerial perspective our results have several implica-
tions for practitioners in industrial markets. The model described in The study examines the innovation related processes that are neces-
Fig. 1 shows a clear path leading to improve the innovation perfor- sary to effectively manage the collaboration with suppliers, monitor
mance that one buying firm can get from its suppliers. The path starts supply markets and leverage purchasing knowledge in order to increase
with the definition of an innovation strategy that is consistent with innovation outcomes.
the purchasing category considered. In order to fully integrate the in- Using structural equation modeling we empirically investigate the
novation strategy into the supply strategy, purchasing managers link between the firm innovation strategy and two purchasing-related
need to consider the individual and sometimes conflictive objectives practices (i.e. supplier collaboration and strategic sourcing) as well as
on the corresponding category level. To this regard, we expect that the purchasing (manager) knowledge. We also hypothesize a positive
categories relatively more subject to technological uncertainty will relationship between purchasing-related practices and innovation per-
require more formal innovation objectives than standard, non-criti- formance. Our findings largely suggest acceptance of the postulated
cal items. model. Previous research (McGinnis & Vallopra, 2001; Wagner, 2003;
Next, in order to translate strategic objectives into actual results, Wynstra et al., 2003) was clear about this possibility, yet largely case
strategic sourcing and supplier collaboration are key to a successful im- based. We instead provide empirical foundations to the positive effect
plementation. Previous research has already shown that companies can of supplier collaboration, strategic sourcing and purchasing professional
learn from their suppliers through close relationships (Chen et al., 2009; knowledge on innovation performance by analyzing a large data set of
García-Morales, Ruiz-Moreno, & Llorens-Montes, 2007). Our findings 498 entries. Based on our findings, purchasing senior managers are
supplement this insight by identifying the purchasing department as therefore advised to take several actions regarding — for instance — pur-
the catalyst of collaborative innovation. Overall, we demonstrate that chasing professionals training needs or adequate buyer-supplier collab-
supplier collaboration and purchasing involvement in NPD actually oration configuration. Further, we demonstrated the enabling role
leads to improved innovation performance. entrusted to purchasing professionals. We also show that technological
Important success factors are the early involvement of representa- uncertainty calls for specific actions from managers in terms of strategic
tives in NPD projects and an integrated evaluation of product design sourcing as well as for mechanisms to avoid negative effects on buyer–
(van Echtelt et al., 2008). If that can be done within co-design relation- supplier relations.
ships with partner suppliers that own complementary competences to This study has its limitations, some of which will serve as the stimu-
the firm's, we also show that a constant effort into strategic sourcing lus for future work. First of all, we focus on specific supplier and pur-
can benefit per se the firm innovation capability. For example, mature chasing contributions to innovation results. Further research might
purchasing departments typically apply portfolio models to cluster dif- investigate other factors that are able to affect the innovation outcomes
ferent types of purchased items and tailor sourcing strategies according- of the buying firm, such as the level of internal integration (i.e. the level
ly. Being able to distinguish between categories that require a joint NPD of integration between purchasing, R&D, and other functions involved
effort with suppliers and categories that can be totally entrusted to ca- in NPD), the level of technical expertise of suppliers and/or buyers, or
pable suppliers as well as to define appropriate contractual arrange- the collaboration with final customers.
ments with each supplier appear as powerful enablers of innovation The contribution of purchasing knowledge towards category in-
performance. novation performance is only indirectly considered within our
Furthermore, purchasing knowledge emerges as a prerequisite analysis. Since it is common sense that the purchasing skills are
for success in both supplier collaboration and strategic sourcing. able to provide access to supplier skills, it would be interesting to
Companies cannot identify capable suppliers or utilize sophisticated know to which degree the purchasing department is able to direct-
purchasing tools without having the corresponding knowledge to do ly influence innovation outcomes at the category level. Similarly,
so. Consequently, supply management can represent an innovation different types of category clusters might be taken into account,
function within companies since it is able to take responsibility for in order to test how contingent factors influence the model
the selection of promising suppliers and for the pursuance of new significance.
ideas in terms of NPD. Supply management as an innovation function Another open issue in the literature deals with possible drawbacks
is the impetus of modernization, which continuously focuses on new of supplier involvement in terms of development costs. Future research
business opportunities and communicates directly to members of might contribute to answer this question by considering performance
the executive board of a company. To achieve this goal, the innova- trade-offs in the context of collaborative NPD. Our study did not specif-
tion strategy at the corporate level should be communicated to pur- ically look at small- and medium-sized enterprises (SMEs) and their
chasing professionals, so that they can properly translate it into a specific innovation potential. Extending our work to examine SMEs' in-
compelling category strategy. Training and incentive schemes in novation potentials would shed further light on SME as innovation
the purchasing function can facilitate to achieve the strategic fit. Sup- catalysts.
ply managers should therefore be reassured regarding positive out- Finally, we only partially considered purchasing potential contribu-
comes out of collaborations with vendors when innovation is a tion to the firm innovation strategy by including purchasing profes-
crucial competitive priority. sionals' knowledge as a construct in our model. More in-depth analysis
Looking at our results from the supplier's perspective, one can might lead to isolate other factors explaining the buyer–supplier
gain further insights. When approaching an industrial customer relationship and the purchasing role in it.
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Supply Chain Management and Public Procurement.
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Stefano Ronchi is a Full Professor of Business Management & Organization and Purchas-
Innovation Management, 25(2), 180–201.
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Van Weele, A. J. (1984). A purchasing performance measurement and evaluation.
Education at MIP-Politecnico di Milano and Vice President Academic Partners at Unitech.
International Journal of Purchasing and Materials Management, 20(4), 16–22.
His research interest is in Purchasing and Supply Management with a particular focus on
Wagner, S. M. (2003). Intensity and managerial scope of supplier integration. The Journal
e-Procurement, Spend Management and Purchasing Organization.
of Supply Chain Management, 39(4), 4–15.
Wagner, S. M., & Hoegl, M. (2006). Involving suppliers in product development: Insights
from R&D directors and project managers. Industrial Marketing Management, 35(8),
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IMM-07139; No of Pages 12

Industrial Marketing Management xxx (2015) xxx–xxx

Contents lists available at ScienceDirect

Industrial Marketing Management

The path of innovation: purchasing and supplier involvement into new

1. Introduction a crucial role in improving ﬁrms' innovation performance (e.g., Clark,

Context Drivers Sources Positional

Technological Innovation Purchasing Innovation

Fig. 1. Theoretical model.

First-order construct Indicator Loading Mean Std dev. CR AVE

Path Standard estimate p-Value Conclusion

Innovation strategy b--- Technological uncertainty .435 ***

5.2. Managerial implications

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