Learning from suppliers: a framework for operation innovation in small and medium sized enterprises

Inter-firm learning though partnering with suppliers is often considered as a relatively cheap way to develop the knowledge necessary for innovating operations procedures. SMEs may benefit, especially from the inflow of information, as they face multiple restrictions on innovating manufacturing or delivery processes due to their small size and limited resources. Based on the two studies – a logistic regression analysis and a configuration analysis – evidence was found that small- and medium-sized enterprises (SME) need to integrate knowledge sources in distinct knowledge configurations. In particular, it is shown that an operation process innovation (OPI) strategy for SME is incomplete if it does not find a way to combine internal and external knowledge to innovate operation procedures. The main contribution of this paper is to uncover the precise composition of effective knowledge configurations, which leads to innovation.