Selecting resilient suppliers: Supplier complexity and buyer disruption

The selection of suppliers has a long-term impact on the performance of the buying firm. This is true in stable situations as well as in times of uncertainty, such as during the COVID-19 pandemic. Building on the literature on supplier selection criteria that would help identify suppliers that support the success of the buying firm, we identify a previously unnoticed criterion: a supplier's complexity. In this study, we examine the relationship between supplier complexity and buyer disruptions. Normal accident theory suggests that complex firms are more prone to disruption, while social systems theory views firm-level complexity as essential in avoiding disruption. Given these two opposing theoretical viewpoints, this study examines whether and how supplier complexity affects numbers of disruptions experienced by the buyers. Our data collection entails 59 buyersupplier dyads, extended to a triadic context (i.e., buyer-supplier-supplier), through a survey taken from 118 German manufacturing firms. The results show that both the internal complexity of a supplier and the complexity of the collaboration with other suppliers increases the number of disruptions experienced by the buyer. A high degree of supplier dependence can dampen this effect. These results introduce a supplier's complexity as a relevant criterion for supplier selection and shed light on the moderating influence of supplier dependency.

Automated summary

The selection of suppliers has a long-term impact on the performance of the buying firm. This study explores the previously unnoticed criterion of supplier complexity and its relationship with buyer disruptions. The results suggest that complex suppliers, both internally and in collaboration with other suppliers, increase the number of disruptions experienced by the buyer, although a high degree of supplier dependence can dampen this effect.