Characteristics of supplier performance measurement systems in collaborative innovation projects: the role of the purchasing department

Abstract

Purpose In the wake of the growing popularity of the open innovation approach, leveraging suppliers as external sources of innovation has attracted increasing interest from scholars and practitioners. Successful supplier involvement largely depends on an effective performance measurement process, but both supply chain management and innovation management literature have paid limited attention to this aspect. This paper aims to fill this gap by illustrating how companies measure the performance of the suppliers involved in their innovation projects and what role is played by the purchasing department. Design/methodology/approach This study interviews project stakeholders from nine different organizations acting as focal companies in the supply chains of various industries. This paper complements this on-field information with a vast amount of data collected from secondary project documents. Structured data coding and analysis allow us to discuss how companies redesign their performance measurement systems to ease the collaboration with suppliers in innovation and what factors underly these decisions. Findings The findings show that, in many cases, supplier performance measurement systems deviate from their typical characteristics to support collaboration in innovation projects. They integrate quantitative and qualitative measures, include contributions from different project stakeholders and are oriented toward high visibility and transparency with suppliers. A more substantial redesign of these systems is favored when purchasing is assigned to strategic project responsibilities and possesses higher absorptive capacity. Originality/value The results complement the knowledge for the supply chain management field, where supplier performance measurement systems have been discussed in the context of traditional buyer-supplier relationships, but not comprehensively in innovation projects and not considering the role of purchasing. Findings also contribute to the innovation management literature, which has mostly focused on what aspects need to be measured for innovation partners, rather than how to manage the performance measurement process in practice.