Supply base flexibility
The characteristics of a firm’s key suppliers impacts the potential scope of returns from strategic purchasing. Supplier resources must be aligned with those of the buyer in order to attain collaborative and competitive advantage. Specific investments in the supplier relationship led to greater supplier responsiveness, and in turn, improved supplier performance. Thus, organizations with more responsive supply bases are more likely to extract gains from the relationship with these key suppliers, including lead time reductions, quality improvements and increased sales.