Does supplier involvement enhance financial performance? The encapsulation effects of product modularity and smartness

Abstract

Purpose This study aims to explore the conditional relationships between supplier involvement and financial performance. From a problem-solving perspective, this study takes the focal firm as a problem-solving system. It is postulated that supplier involvement enhances financial performance by helping solve complex problems of new product development. Furthermore, product modularity and smartness are considered contingent factors to clarify the boundary conditions. Design/methodology/approach The ordinary least squares regression was conducted to test the hypotheses based on survey data from 136 high-tech firms in China. Findings Supplier involvement is positively related to financial performance. Product modularity weakens the impact of supplier involvement on financial performance. Furthermore, product smartness strengthens the negative influence of product modularity on the relationship between supplier involvement and financial performance. Originality/value This study combines supplier involvement with product attributes. It takes a problem-solving perspective to rethink suppliers’ roles in new product development as problem-solvers rather than resource holders. Furthermore, this study advances the encapsulation effects of product modularity and smartness to influence the supplier involvement–financial performance link.

Strategic Sustainability and Operational Initiatives in Small- and Medium-Sized Manufacturers: An Empirical Analysis

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Investigating the quality of the relationship, supply risk mitigation on medium and large-sized manufacturing firms' supply chain performance in the developing countries: the moderating effect of supplier involvement

“…In the last two decades, there has been an increasing trend in the number of original manufactured products (OMPs), which have outsourced multi activities by their suppliers (Suurmond et al, 2020). Supplier involvement (SI) concept is defined as the extent to how much the suppliers have several resources, capabilities, information knowledge and investments that can provide their partners with tasks, processes and developments, as a part or whole service in order to develop their customers' current products and future needs (Azadegan et al, 2020;Wang et al, 2021c). In SCM literature, there are many studies mentioned to the field of SI that have different areas, such as level of SI in radical innovation (Zhao et al, 2015;Bao et al, 2017;Johansson et al, 2021), advantages and drawbacks of SI (Chae et al, 2017;Aghazadeh et al, 2022;Al-Shboul, 2023), timing of SI (Huntley, 2006;Ye et al, 2018), and the supplier interfaces in technological advancements (Ju et al, 2020;Flankegard et al, 2021).…”