Embracing supply base complexity: the contingency role of strategic purchasing

Official URL: https://dx.doi.org/10.1108/IJOPM-09-2020-0662

Purpose: This paper aims to empirically examine the moderating role of strategic purchasing on the relationship between supply base complexity (SBC) and purchasing performance. Design/methodology/approach: Survey data were collected from 209 firms listed in the Capital Top 500 Firms of Turkey. Measurement properties were assessed via confirmatory factor analysis, and the conceptual model was tested via hierarchical regression analysis. A supplementary analysis based on 14 semi-structured interviews was conducted to provide further insights on the survey findings. Findings: Regarding structural SBC, the results suggest that horizontal complexity and supplier interaction improve purchasing performance, but only in firms with high strategic purchasing. By contrast, spatial complexity reduces purchasing performance in firms with high strategic purchasing, while supplier differentiation does not have any effect. Regarding dynamic SBC, the results show that both delivery complexity and supplier instability reduce purchasing performance when firms have low strategic purchasing. Interviews further suggest that firms with high strategic purchasing leverage the positive effects and mitigate the negative effects of SBC by having a long-term focus, considering multiple performance criteria and adopting advanced purchasing practices. Practical implications: In contrast to what is widely posited in the existing literature, the nuanced findings of this study reveal that complexity is not always detrimental. The results suggest that practitioners should aim for high levels of strategic purchasing to suppress the negative effects of SBC while leveraging its benefits. Originality/value: By investigating the contingency role of strategic purchasing, this study provides novel insights into the under-investigated issue of how to best “manage” SBC.