The evolution of buyer-supplier relationships: an historical industry approach

Purpose - This paper aims to evaluate the evolution of buyer-supplier relationships from adversarial toward relational, or service-centered, emphasis for large-scale organizations. Design/methodology/approach - This paper uses the historical method to review historical changes through synthesized qualitative (i.e. field notes and industry interviews) and quantitative (i.e. company reports, Compustat queries, trade reports, and survey) research. Findings - Technology and information sharing in B2B relationships engender integrated value chains. Within these value chains, service-centered view of B2C relationships have been adopted in B2B relationships, resulting in changes in supplier roles and how they are measured. Research limitations/implications - By focusing on large scale buyer-supplier relationships within supply chains (e.g. Wal-Mart, Royal Phillips, ElecSound, China Minmetals, The People's Republic of China), which may affect the generalizability to small-business applications, this paper provides some guidance on which customer levels (in a value chain) an organization should focus. The evolution of buyer-supplier relationships towards more cooperative relationships results in changing roles such as co-managed inventory, where suppliers are authorized to write themselves orders. Practical implications - This paper is a very useful source of information for practitioners and educators about recent trends in large-scale buyer-supplier relationships, including slotting allowances, co-managed inventory practices, and selling teams. It also provides a buyer-seller trust matrix that can be used for teaching or developing relational strategy in organizations and classrooms. Originality/value - This paper provides description of changes in sales force roles and measures, including the roles of responsiveness, empowerment, trust (both supplier and supplier representative), and information sharing not previously found in the literature. Survey research establishes the external validity of the qualitative research.