The importance of key supplier relationship management in supply chains

Abstract

Purpose – The purpose of this paper is to investigate the impact of key supplier relationship management (KSRM) – understood as an aggregated supply chain management (SCM) process in the upstream direction – on the overall level of the execution of SCM within organizations. Design/methodology/approach – A conceptual model is developed from a theoretical framework and proposes the capability to do KSRM as a mediator between internal and external SCM resources and SCM execution. A survey of 174 managers representing different supply chain stages is used to test the model through variance-based structural equation modelling. Findings – The findings reveal that external SCM resources directly affect the capability to do KSRM. Nevertheless, internal resources show a considerable indirect impact through external resources and can thus be considered an indirect determinant. The capability to do KSRM in turn impacts upon the level of SCM execution, measured in terms of the integration of business processes, directly and substantially, as well as mediating the effect between SCM resources and the level of SCM execution. Originality/value – The main contribution of this paper is to empirically demonstrate the potential of KSRM for enhancing the level of SCM execution within organizations and consequently the level of integration in supply chains, leading to higher customer and shareholder value.