Supplier capabilities in large shipbuilding projects

Project-based firms concentrate on their core capabilities outsourcing non-core activities. As project contractors increasingly use external suppliers to complement their own capability base, the importance of supplier selection is emphasized. Supplier choices should rely on accurate knowledge of the suppliers' capabilities. We examine the literature related TO supplier capabilities in collaborative, discontinuous project business. We use a qualitative, embedded single-case strategy in shipbuilding industry to explore the importance of supplier capabilities in one shipyard and examine how consistently the shipyard and its 20 suppliers assess the capabilities of the suppliers. Our results show that the buyer prioritizes technical, operational and business capabilities over relational and developmental capabilities, and that the buyer and its suppliers diverge in their assessments of the suppliers' capabilities, creating potential misunderstandings and false expectations in the buyer–supplier relationships. We complement prior research by adding a new dimension of business capabilities into the supplier's capability base in the field of project business.

► Buyer values technical and business capabilities in shipbuilding projects.
► Buyer and suppliers differ in their assessments of the suppliers' capabilities.
► Inconsistency of views has implications on the procurement decision.
► Inconsistency in evaluation may lead to false expectations in the relationships.