Redesigning the supply chain: reengineering, outsourcing, and relational capabilities

Abstract

Purpose: The purpose of this paper is to analyze the competitive advantages of the networks of firms forming the supply chain and distribution channels through process integration, outsourcing, and creation of relational capabilities. Design/methodology/approach: A four-stage methodology is created to redesign the supply chain depending on the creation of relational capabilities: internal analysis to determine the focal company's competence; relational analysis in the outsourcing of activities; process integration; and development of relational capabilities. Findings: The development of relational capabilities is based on two dimensions: company level of competence in performing activities, and strategic contribution of the activities to competitive advantage. Four cases are analyzed from those two dimensions: high competence/low strategic contribution; low competence/high strategic contribution; low competence/low strategic value; and relational and internal capabilities, where relational capabilities strengthen internal capabilities. Finally, it is established what actions are necessary for the activities analyzed from those dimensions to be a source of competitive advantage by means of relational capabilities created through process integration and outsourcing to highly competent firms. Practical implications: The development of a short self-evaluation questionnaire that helps firms implement the methodology and creates the basis for its empirical application by researchers. Originality/value: The paper studies relational capabilities, an aspect omitted from the internal perspective of the resource and capability theory. It also determines four ways in which relational capabilities influence the strengthening of internal capabilities. The theoretical approach is developed in the redesign of the supply chain.