The conceptual locus and functionality of key supplier management: A multi-dyadic qualitative study

In response to a growing interest in key supplier management (KSM) among business practitioners and academics, this study aims to identify the conceptual locus and the functionality of KSM with reference to the components of a business relationship. A multi-dyadic case study was carried out focusing on KSM in relationships between a multinational electricity-distribution company and its nine key suppliers. The KSM system turned out to be a component of the technical setting of the relationship structuring the interaction, but also more widely guided the joint developmental means for improving value creation. It acts as a channel through which the buyer's and the supplier's goals are implemented in building an infrastructure for effective performance within and outside the key supplier relationship. Further qualitative research would enhance understanding of KSM in its organizational and inter-organizational contexts in terms of defining constructs and their interrelations to be tested in quantitative research.

► The study contributes in defining the conceptual locus of the KSM phenomenon with reference to a key supplier relationship.
► KSM activity could be conceptualized as interplay between a formal KSM system and an interaction process.
► The KSM system functions as a forum that facilitates organized consideration of the managerial aspects of the relationship.
► KSM is not only a buyer's tool, but also a joint developmental means for improving value creation in the relationship.
► Open communication and a fair division of the benefits and risks forms a solid basis for KSM activity in the long term.