Schulich Supply Chain Paper Recognized As Best Paper Finalist
“Historical Supplier Performance and Strategic Relationship Dissolution: Unintentional but Serious Supplier Error as a Moderator” was co-authored by Yi-Su Chen from the University of Michigan and Susan Meyer Goldstein from the University of Minnesota.
The paper raises two main points. The first is that a ‘good’ strategic supplier has to be careful in managing its relationship with the sourcing firm because favourable past supply performance does not help buffer against a recent unintentional but serious supply error.
“In fact, past excellence in supply performance in such a case is more detrimental and increases the likelihood that the sourcing firm will terminate the relationship,” said Professor Rungtusanatham, who is a Canada Research Chair in Supply Chain Management and a professor in the Master of Supply Chain Management program.
The second point is that the sourcing firm must avoid falling into the trap of escalating supply performance expectations. Otherwise it sets the strategic supplier up for failure and subjects the sourcing firm to major disappointment when an unintentional but serious error is committed by the strategic supplier.
As an empirical test for the paper, the researchers collected and analyzed data from 256 sourcing professionals participating in a scenario‐based role‐playing experiment. The results revealed implications for how manufacturers should evaluate critical‐component suppliers and how critical‐component suppliers should manage ongoing strategic relationships with manufacturers.