SUPPLY CHAIN CAPITAL: THE IMPACT OF STRUCTURAL AND RELATIONAL LINKAGES ON FIRM EXECUTION AND INNOVATION

TLDR

Firms invest millions annually to develop supply chains for performance gains, yet the contribution of supply‑chain relationships to success remains unclear. This article develops a conceptual framework to value firm‑to‑firm supply‑chain connections from the focal firm’s perspective. Drawing on social‑network and economic theory, the authors define supply‑chain capital as the combined value of a firm’s network structure and relationship content. The paper proposes multiple propositions on how supply‑chain capital can be accrued and leveraged for firm benefit, and offers managerial investment recommendations and future research directions.

Abstract

Firms invest millions of dollars annually in developing their supply chains, with the broad goal of increasing their own performance. However, despite the significant resources deployed for supply chain development, the extent to which initiating, maintaining, and managing supply chain relationships contributes to firm success remains unclear. The current article provides conceptual development supporting the valuation of firm‐to‐firm supply chain connections from the perspective of the focal firm. Based on the social network and economics literatures, the article introduces the concept of supply chain capital , which comprises the value of both the structural configuration and relationship content of the firm's supply chain network. Following theoretical development, a non‐exhaustive set of propositions are constructed illustrating multiple ways that supply chain capital can be accrued and exploited for firm‐level benefit. Managerial recommendations for investment in supply chain capital are included, as are future directions for research in the area of supply chain networks.