Responding to Supply Chain Disruptions: Buffering or Bridging?

This study investigates the interplay between value creation and value capture of learning effects in buyer-supplier relationships. It focuses on how interproject learning effects affect supplier profitability. We analysed key performance indicators (e.g., profit, past turnover with focal buyer, past turnover with other buyers, R&D ratio, general turnover) of around 3,000 projects from a large automotive supplier. Our findings indicate that suppliers learn from repeated projects. However, the extent to which this results in higher profitability depends on whether these repeated projects are with the same buyer or with another buyer. We find that past turnover with a focal buyer in a given product group reduces the supplier’s profitability. However, past turnover with other buyers shows a positive effect on the supplier’s profitability. Supplier dependence shows to moderate these effects, and generally reduces the supplier’s value capturing leverage. These findings provide new insights into the dynamics of value creation and value capture of learning effects in buyer-supplier relationships.