Formation of manufacturers' supply management capability: The knowledge‐based view

AbstractAcknowledging the pivotal strategic importance of external suppliers in obtaining competitive advantages underscores the necessity for manufacturers to bolster their supply management capabilities. This involves meticulously structuring, developing, and efficiently managing the supply base to ensure alignment of suppliers with the manufacturing processes and business objectives, consequently generating value and enhancing market competitiveness. The processes of acquiring, assimilating, transforming, and exploiting pertinent supply chain knowledge are vital for continuously bridging the gap between the current knowledge and the complex requirements of supply management, consequently strengthening the purchasing department's supply management capabilities. Strategic purchasing orientation commits more strategic resources to the purchasing department, allowing manufacturers to access and assimilate a broader spectrum of knowledge within the supply network. Grounded in the knowledge‐based view, our research delves into the development process of supply management capabilities, examining the influence of strategic purchasing orientation and absorptive capacity. Through hierarchical regression analysis of data from 395 manufacturers, our findings reveal that a pronounced strategic purchasing orientation significantly enhances absorptive capacity, thereby facilitating the development of supply management capabilities. Additionally, our study identifies distinct mediating roles of potential and realized absorptive capacities in the relationship between strategic purchasing orientation and supply management capability. This research offers a novel perspective on the development of supply management capabilities, providing valuable insights for manufacturers to address the complexities of supply management by narrowing the knowledge gap. Key words: supply management capability; absorptive capacity; strategic purchasing orientation.