Learning how to learn

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Learning How to Learn

Companies must keep innovating in order to remain competitive, and an important source of new ideas involves exchanges with suppliers. While identifying and capturing these ideas requires a relationship between the buyer and seller that fosters innovation, many companies fail to establish this kind of rapport. Research under way at the Zaragoza Logistics Center (ZLC), in Zaragoza, Spain, is providing insights into supply chain relationships that will help trading partners to harness mutually beneficial ideas.

A key element of inter-organizational learning is a concept called “Absorptive Capacity” (AC), which is defined as: “the ability of a firm to recognize the value of new external knowledge, assimilate it, and apply it to commercial ends.” AC has been studied extensively, but mainly in relation to single firms and R&D capabilities. “There is an opportunity to understand the implications of fostering AC in the supply chain management context, and that is one of our goals,” says Dr. María Jesús Sáenz, a professor at the MIT-Zaragoza International Logistics Program at ZLC and director of the scmLAB, where the AC project is being developed.

Sáenz explains that AC has three primary stages:

  1. Exploration. A company has to be aware of, recognize, and understand external knowledge. One supply chain example is the implementation of a new logistics procedure for shipments between two companies.
  2. Assimilation. The detected external knowledge is combined with the internal know-how within each company. In the above example, both companies should verify that the supply chain software used is capable of providing and accepting the corresponding information.
  3. Exploitation. The third step is to make decisions based on the assimilated knowledge and implement change that yields benefits for the supply chain relationship. In the example cited above, the new logistics procedure is implemented.

This three-step framework has a number of facets that organizations need to take into account if they want to maximize their capacity to learn with – and from – their supply chain partners. Structural facets include the roles, functions, and responsibilities of the parties involved, and the cultural norms of respective trading partners also influence their interactions. These norms include the extent to which individuals take responsibility for implementing the lessons learned, as well as the importance of rank in the process. Other important considerations are the comfort levels of participants when making mistakes in the working group and how prepared they are to engage in frank discussions. Policies such as each organization’s commitment to learning represent another facet of the framework.

The empirical research includes specific supply chain relationships analysis between a main buyer and several supplier organizations. In-depth assessments of relational innovation projects, as well as interviews with senior managers from the two sides of the supply chain dyad, are also part of the research. Companies that have participated in the project thus far have benefited by improving their dynamic a