Showing papers in "Journal of Purchasing and Supply Management in 2017"
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TL;DR: In this article, a content-based literature review provides the base for the identification of the key motives for offshoring and backshoring, which are then organised using a theory-grounded framework.
Abstract: Motivations underscoring offshoring and backshoring are typically investigated as separate entities in the academic literature. This separation undermines a deeper comprehension of the two phenomena, and implicitly denies the conceptualization of backshoring as a possible step of the firm internationalization process. Our paper seeks to fill this gap by (1) understanding the relations (if any) among offshoring and backshoring motivations at firm level; (2) exploring whether backshoring is a “failure” of the offshoring initiative, or rather the evolution of the firm's competitive and location strategies. A content-based literature review provides the base for the identification of the key motives for offshoring and backshoring, which are then organised using a theory-grounded framework. Next, we conduct a multiple case study analysis based on four companies, searching for common patterns in offshoring and subsequent backshoring initiatives. Cases allow understanding how the motivations (Why) connect with the governance modes (How), and the location choice (Where). Building on the case findings, the paper presents some propositions for future empirical research.
87 citations
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TL;DR: In this article, the authors proposed a proactive planning in supply chain risk management to reduce the supply side risks in an international automotive company, based on a linear programming model, considering the cost criterion as the first priority.
Abstract: Globalization, e-trade, advanced technologies and emerging production techniques have increased supply chains’ efficiency and added value. However, despite numerous advantages, these factors make supply chains more fragile and vulnerable to risks. For this reason, companies that perform supply chain risk management gain competitive advantage. In the past, supply chain managers mainly focused on reducing costs; but recently, they have begun to give importance to supply chain continuity and resiliency which have significant impacts on costs as well. Hence, conventional reactive planning has given way to proactive planning in supply chain risk management. In this study, the supply chain risk management process is investigated and a procedure is proposed in the risk mitigation phase. In the first stage of the proposed procedure, an initial procurement plan is obtained via a linear programming model, considering the cost criterion as the first priority. In the second stage, this plan is revised by including the risk criterion into the planning as the second priority. The aim of this procedure that enables proactive planning is to reduce the supply side risks. The model is tested with a hypothetical data set and the cost analysis is performed to evaluate the performance of the procedure. Finally, the whole supply chain risk management process including the proposed procedure is applied to an international automotive company.
79 citations
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TL;DR: Wang et al. as mentioned in this paper identified enablers for sub-suppliers' environmental performance improvement, and applied a Decision-Making Trial and Evaluation Laboratory (DEMATEL)-based case study method to evaluate inter-relationships among these enabler and improve the focal company's GMSM practices, by using action research (AR) method principles.
Abstract: Stakeholder pressure, from actors including regulators, consumers and non-governmental organizations, has made organizations more responsible for poor environmental performance of their direct and sub-suppliers. Thus, green multi-tier supplier management (GMSM) has become an emergent topic. Yet it is still unclear how to enable GMSM practices effectively, i.e. how to enable sub-suppliers' environmental performance improvement. To help address the gap in the literature, this paper aims to identify enablers for sub-suppliers' environmental performance improvement, and it further applies a Decision-Making Trial and Evaluation Laboratory (DEMATEL)-based case study method to evaluate inter-relationships among these enablers and improve the focal company's GMSM practices, by using action research (AR) method principles. The data analysis and discussion with a follow-up evaluation after two years provided insights for the successful implementation of GMSM. The results show that top managers’ support from the organizations is a prominent and necessary foundational enabler. An interesting observation is that close proximity of supply chain members is regarded as a very prominent enabler. Evaluation and feedback on these enablers two years later found that the enabler mapping was beneficial, allowing them to address the most influential enablers, and thus the GMSM practices of the focal company has been highly improved. This paper concludes with directions for further research.
59 citations
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TL;DR: In this article, the authors analyze empirical differences and patterns in applied sustainable sourcing and supply management (SustSSM) strategies and find that companies employ individual SSSM practices in reoccurring configurations.
Abstract: This paper seeks to analyze empirical differences and patterns in applied sustainable sourcing and supply management (SustSSM) strategies. The question is whether companies employ individual SustSSM practices in reoccurring configurations. The study aims to identify such typical corporate SustSSM approaches and how they vary across contingency factors such as industry or region. We employed a two-step methodology. First, a literature review derives scoring scales for six categories of how companies can integrate sustainability into sourcing. Second, using these scales for a content analysis of sustainability reports from 99 corporations spread across different regions, a taxonomy is derived by means of a cluster analysis. Identifying five corporate types of how firms configure their SustSSM strategy, the analysis suggests that companies do not combine SustSSM practices randomly. Rather, individual SustSSM practices are combined to alternative configurations that follow different logics to form sustainable sourcing strategies. Addressing a cross-regional and cross-industry sample, the results encourage further investigating the interplay of different SustSSM practices. In doing so, we show the need to align SustSSM configurations with a firm's specific operative supply chain structures and strategic goals.
44 citations
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TL;DR: In this paper, the authors investigated the negative effects of one category of deep-level diversity (e.g., affective trait diversity) on sourcing team performance and how such negative effects might be mitigated through team members' emotional intelligence.
Abstract: In cross-functional sourcing teams, differences in goals and personality traits can lead to tensions and reduced effectiveness. Diversity in teams can be conceptualized as surface-level diversity (e.g., gender, nationality) or as deep-level diversity (e.g., personality, attitudes). This study investigates the potentially negative effects of one category of deep-level diversity – namely, affective trait diversity – on sourcing team performance and how such negative effects might be mitigated through team members' emotional intelligence. The study analyzes a sample of 88 sourcing teams (234 team members) using moderated regression analyses. Sourcing team cohesion is found to fully mediate the relationship between affective diversity and team performance, while the collective emotional intelligence of the sourcing team positively moderates the diversity-cohesion relationship (moderated mediation). Thus, this study provides insights into both the mechanics of team diversity and the critical role of collective emotional intelligence in sourcing teams and thereby enables supply managers to better understand cross-functional team setups and effectiveness.
42 citations
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TL;DR: This study first investigates the relationship between individual decision modes and the financial and non-financial performance of the selected supplier, then applies a configuration approach and develops a taxonomy of decision-making modes surrounding supplier selection.
Abstract: This study extends the literature on decision modes in purchasing. While decision modes have traditionally been divided broadly into rational and intuitive processing modes (dual-process approach), following the tenet of recent psychology research, we further differentiate the latter into experience-based and emotional processing (multiple systems approach). Previous decision-making research has been inconsistent in its findings about the relationship between decision modes and performance. Using the purchasing manager's supplier selection decision process as our unit of analysis, we first investigate the relationship between individual decision modes and the financial and non-financial performance of the selected supplier. Hierarchical regression analyses indicate that rational processing is positively related to both financial and non-financial performance, while emotional processing is negatively related to financial performance, and the interaction of rational and emotional processing is positively related to both performance outcomes. Because recent cognitive psychology assumes that some combination of rationality and intuition is commonly used, we then apply a configuration approach and develop a taxonomy of decision-making modes surrounding supplier selection. Cluster analysis results show five decision-making patterns that are related to the performance of the selected supplier.
39 citations
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TL;DR: Evidence is provided to show that the impact of supplier and customer integration on operational performance varies across production systems, such as one-of-a-kind production, batch production and mass production systems.
Abstract: The boundary conditions of supply chain integration (SCI) have been widely studied in order to find out when SCI is applicable and effective. However, prior studies have mainly focused on external contextual factors, such as supply complexity, environmental uncertainty and country-level infrastructure. This study contributes to the SCI literature by examining the contingency effects of internal production systems on the relationship between supplier integration, customer integration and operational performance. Based on organizational information processing theory, we provide evidence to show that the impact of supplier and customer integration on operational performance varies across production systems, such as one-of-a-kind production, batch production and mass production systems. The empirical results also reveal how supplier and customer integration can be matched with different configurations of production systems in order to achieve the desired quality, flexibility, delivery or cost performance.
38 citations
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TL;DR: In this article, a case study of purchasing groups in the healthcare sector is presented, which sheds light on performance measurement in a purchasing group, on the dynamics between the group and its members, and on the interaction between performance measurement and interorganizational dynamics.
Abstract: Purchasing groups were first created in the healthcare sector, which has faced unprecedented challenges in terms of cost control for over two decades. Purchasing groups are indeed supposed to generate additional savings and more efficient purchasing processes. However, although various aspects of purchasing groups have been studied since the early 2000s, both their performance measurement and the influence that this measurement has on inter-organizational dynamics have been neglected. In purchasing groups, the dynamics between the group itself and its members often results in tensions between both parties. Performance measurement within purchasing groups could alleviate those tensions, since “objective” data could then be used to improve communication. Based on a case study, this research sheds light on performance measurement in a purchasing group, on the dynamics between the group and its members, and on the interaction between performance measurement and inter-organizational dynamics. Results indicate that measuring performance impacts the dynamics between both parties, but that the relationship is also the other way around, and that the inter-organizational dynamics is quite complex. In addition, this paper proposes a framework summarizing the research findings.
35 citations
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TL;DR: In this article, the authors examined the relationship between green supply chain practices, relational bonding, and green innovation performance and found that relational bonding is positively related to the green innovation performances.
Abstract: Previous research has paid attention to the effect of green supply chain practices on green innovation performance. However, little has been done to examine the substantive role of relational bonding in green supply chain management context. This study attempts to identify relational bonding as a potential moderator and examines the relationships between green supply chain practices, relational bonding, and green innovation performance. The results indicate that green supply chain practices and relational bonding are positively related to green innovation performance. Relational bonding moderates the relationship between green supply chain practices and green innovation performance. This study makes a contribution by integrating relationship marketing literature and green management literature. This study also provides practical implication for the essential role of relational bonding in green supply chain management.
34 citations
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TL;DR: In this paper, the authors identify firms' green purchasing capabilities, classified into operational capabilities and dynamic capabilities, and measure their effects on the environmental and economic performance of a firm, and investigate the moderating effect of firm size on the relationship between green purchasing capability and firm performance.
Abstract: This study identifies firms’ green purchasing capabilities, classified into operational capabilities and dynamic capabilities, and measures their effects on the environmental and economic performance of a firm. We developed instruments to measure operational green purchasing capabilities and dynamic green purchasing capabilities. This study also investigates the moderating effect of firm size on the relationship between green purchasing capabilities and firm performance. The structural equation model (SEM) is used to analyse 239 responses from Japanese manufacturing companies. The results indicate that their green purchasing capabilities positively affect environmental and economic performance. Operational capabilities and dynamic capabilities have different levels of effects on green purchasing performance. A further analysis of the moderating effect of firm size shows that the high economic performance of green purchasing relies on the level of dynamic capabilities rather than firm size.
34 citations
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TL;DR: In this paper, the authors developed a theory of supplier network-based innovation value, which explains how a supplier's upstream and downstream value network can be a source of competitive advantage for a buying company.
Abstract: To understand how a supplier helps a buying company create value through innovations, studies have focused on a supplier's internal resources or its relationship with a buying company. Building upon this body of literature, we develop a theory of supplier network-based innovation value in this conceptual paper. This theory explains how a supplier's upstream and downstream value network can be a source of competitive advantage for a buying company. Specifically, it proposes that the levels and types of supplier innovation value is contingent on the configuration of a dual-ego value network, characterized by the locus and degree of buyer-supplier structural equivalence. This theory also explains how a supplier's ties with a buying firm's competitors can pose both opportunity and risk to buying company innovation. This theory contributes to the literature by showing when “seemingly undesirable” suppliers, due to a lack of technical capability or strong relationship with a buying company, might still be valuable to a buying company's innovation.
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TL;DR: In this paper, the authors introduce supply management scholars to family business, including its prominence and unique characteristics, and develop a research agenda from existing supply management and family business literature by offering propositions for future research where family business influences may permeate contemporary supply management topics.
Abstract: Family-owned enterprises dominate global business, generating 70–90% of the world's gross domestic product. Existing management research has validated that family businesses often behave differently than non-family businesses, primarily by focusing on idiosyncratic non-economic goals that are not typically assessed in traditional business research. Extant supply management literature has yet to investigate the influences of family business, thus overlooking a potential significant source of variation in our research as well as limiting our managerial relevance. The objective of this paper is to introduce supply management scholars to family business, including its prominence and unique characteristics. Applying socioemotional wealth as a theoretical lens, we develop a research agenda from existing supply management and family business literature by offering propositions for future research where family business influences may permeate contemporary supply management topics including strategic supply management, sourcing strategy, supplier relationships, sustainability, risk, and e-procurement. In doing so, we provide an initial foundation for supply management scholars to both incorporate family business effects into research and launch new research streams. This is one of the first papers to our knowledge that introduces the field of family business to supply management scholars.
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TL;DR: In this paper, the authors take an organization design view to outsourcing in the purchasing and supply management (PSM) context, and elaborate how the organizational design of the PSM function relates to outsourcing opportunities in order to increase efficiency and effectiveness by allocating internal resources to more value-addressing activities.
Abstract: As a function with a strategic role, Purchasing and Supply Management (PSM) needs to continuously find ways to improve its efficiency and effectiveness. One potential way to specifically addressing efficiency targets is to outsource parts of the purchasing process. While outsourcing remains one of the most prevalent business practices in various areas, many businesses fail to realize the benefits anticipated from their outsourcing initiatives. Research reports that one major reason for these outsourcing challenges lies in the design of the focal organization. In this paper, we take an organization design view to outsourcing in the PSM context. Based on a multi-year case study from 2010 to 2013 at a global chemical and pharmaceutical company, we elaborate how the organizational design of the PSM function relates to outsourcing opportunities in order to increase efficiency and effectiveness by allocating internal resources to more value-adding activities. The case illustrates how an activity-based organizational design of PSM can support outsourcing of some parts of the purchasing process.
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TL;DR: In this article, the authors adopt the resource-based view (RBV) as a lens to explore the extent to which NHS resources support the strategic adoption of value-based approaches.
Abstract: Procurement in the UKs National Health Service (NHS) is facing its most significant financial challenge Despite the sheer scale and complexities of the public healthcare sector, the Government's solutions are all too often packaged as "collaborate more", "standardise products" and "leverage spend" Unfortunately, these over simplistic solutions take a myopic view of market drivers, conflate spend with potential savings and fail to deliver value Many contracts have already been commercially optimised yet the funding crisis continues to deepen New value-based procurement approaches are needed to drive longer-term innovation and cost reduction and to move debates from efficiencies to embrace effectiveness in integrated supply chains In this research, we adopt the resource-based view (RBV) as a lens to explore the extent to which NHS resources support the strategic adoption of value-based approaches An empirical case study on a regional cluster of six NHS Trusts in England, confirms the dominance of narrow price-based approaches that create barriers to moving towards longer-term, valuebased procurement The antecedent roots of price-based approaches are unpicked through a hermeneutic analysis of recent Government commissioned reports to show how these have set the tone, culture and priorities for healthcare procurement in the UK The analysis provides explanatory power to the case study by illustrating how Government reports have led to, and legitimised the dominance of price-based approaches and caused relational and resource-based barriers to adopting value-based procurement, despite stakeholder enthusiasm The findings provide unique insights into why public procurement has struggled to reach beyond its traditional cost orientated scope We contribute to an extended consideration of the RBV in public organisations through identifying the role of the policy environment in determining and legitimatising an organisation's strategic direction
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TL;DR: In this paper, the authors re-examined the link between fairness and commitment in supply chain relationships and proposed that commitment can also precede perceived fairness, thus redefining the relationship between the concepts as bidirectional in buyer-supplier relationships.
Abstract: By re-examining the link between fairness and commitment in supply chain relationships, this study elaborates on the existing theory that views fairness only as an antecedent. It proposes that commitment can also precede perceived fairness, thus redefining the link between the concepts as bidirectional in buyer–supplier relationships. The study examines both the buyer and supplier perspectives. Based on interviews at 24 technology industry firms in Finland, this empirical study demonstrates that buyer commitment has a positive impact on how suppliers perceive distributive fairness in the relationship. In turn, this effect is reciprocated by the suppliers through a commitment in the form of relationship-specific investments and continuous improvements that are perceived as fair by the buyer. As a managerial implication the study emphasizes the importance of fairness evaluation to the relationship parties.
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TL;DR: In this paper, the authors assess antecedents of manufacturing flexibility that stem from the upstream relationships with strategic suppliers and explore the contingent effect of product dynamism on the relationship between manufacturing flexibility and customer satisfaction.
Abstract: A critical capability sought by an increasing number of firms is manufacturing flexibility, because it allows to effectively respond to dynamic markets. Grounded upon a supply chain perspective, this paper aims to assess antecedents of manufacturing flexibility that stem from the upstream relationships with strategic suppliers. Additionally, it is one of the first to analyze the contingent effect of product dynamism on the impact of manufacturing flexibility on downstream customer satisfaction. We apply structural equation modeling to a sample of 155 companies in order to analyze our hypotheses. Results strongly indicate that buyer-supplier collaboration facilitates inter-organizational learning that in turn allows organizations to develop manufacturing flexibility and increase customer satisfaction. Approaching manufacturing flexibility from a broader supply chain view thus pays off. Moreover, we apply multi-group confirmatory factor analysis to explore the contingent effect of product dynamism on the relationship between manufacturing flexibility and customer satisfaction. Results suggest a stronger impact of manufacturing flexibility on performance in the context of higher product dynamism in companies’ customer markets, confirming the importance of a contingency view to flexibility.
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TL;DR: In this paper, the authors proposed an objective, quantitative decision analysis approach to position products and services within the Kraljic Portfolio Matrix (KPM) to help overcome the qualitative nature of the model, which results in a subjective method for weighting and positioning suppliers or commodities in the various quadrants.
Abstract: Since its inception, the Kraljic Portfolio Matrix (KPM) has been widely used as a diagnostic and prescriptive purchasing tool. One of the primary weaknesses of the KPM is the qualitative nature of the model, which results in a subjective method for weighting and positioning suppliers or commodities in the various quadrants. In an effort to help overcome this widely cited weakness, this research proposes an objective, quantitative decision analysis approach to position products and services within the KPM. Single attribute value functions are used to quantify the strategic purchasing attributes of the KPM. A multi attribute value function is then used to quantify and rank-order products and services within the KPM based on the two strategic purchasing objectives. We empirically demonstrate this approach using data from an organization with a $10 billion purchasing portfolio. Furthermore, we illustrate how a cost-benefit view of the results help decision makers quickly and easily identify the products and services most conducive to the implementation of commercial best practice purchasing strategies. A sensitivity analysis advocates the robustness of our approach.
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TL;DR: In this paper, a systematic literature review of the last 30 years and by performing a content analysis of 131 selected articles, the authors made a differentiation between the levels of strategic contribution made by supply and the contribution types in category II and III.
Abstract: Since the mid-1970s, authors from academia and from business have recognized that the strategic contribution made by supply is multi-faceted, although their work does not distinguish among the levels of strategic contribution. This study makes this differentiation by using a systematic literature review of the last 30 years and by performing a content analysis of 131 selected articles. The analysis of the increasing sophistication of supply's strategic contributions leads to three main observations: 1) the different types of contributions can indeed be classified into categories: category I ( support to corporate improvement targets ), category II ( support to the organizational competitive advantage ), and category III ( source of sustainable competitive advantage ); 2) contribution types in category I have been recognized since at least the early 1980s, while recognition has progressively taken place mostly in the 1990s for categories II and III; and 3) the contribution types in category I are perceived both as contributions that the supply function must master before it can take on those in categories II and III, and as contributions expected even when the supply function already contributes well to categories II and III. Therefore, supply professionals should develop their ability to better utilize the currently acknowledged strategic contributions, while being ready to take advantage of the new types of contributions.
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TL;DR: In this article, the authors adopt the absorptive capacity perspective while investigating the cases and focus on four distinct sub-capabilities: acquisition, assimilation, transformation, and exploitation, and find that the substitution approach consists of short-term research on new technological areas in order to gain the ability to identify and evaluate alternative technologies.
Abstract: Prior literature suggests that significant internal R&D resources are needed to leverage suppliers for innovation and that external knowledge sources can be used to complement the internal knowledge base. Based on the analysis of four inbound open innovation projects at Fortum, a multinational energy utility company, we argue that companies with low R&D intensity may adopt an alternative approach which aims at substituting – not merely complementing – internal R&D with external innovations. We adopt the absorptive capacity perspective while investigating the cases and focus on four distinct sub-capabilities: acquisition, assimilation, transformation, and exploitation. We find that the substitution approach consists of short-term research on new technological areas in order to gain the ability to identify and evaluate alternative technologies, as well as joint business models and operations based on complementary capabilities between the parties. The cases also reveal that the innovation process requires significant collaboration and the buying company’s supplier management capabilities improve the success of inbound open innovation projects of this type.
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TL;DR: In this article, the authors examined whether asymmetric relationships can also lead to supplier satisfaction, arguing that traditional analysis methods are unsuitable for thoroughly analyzing this issue, and they test the relationship between (1) balanced dependence (i.e., the buyer and supplier are equally dependent on each other) and supplier satisfaction and (2) asymmetric dependence (either the supplier or buyer is the dominant party) on supplier satisfaction.
Abstract: Studies argue that balance in dependence is critical to supplier satisfaction in buyer-supplier relationships. We examine whether asymmetric relationships can also lead to supplier satisfaction, arguing that traditional analysis methods are unsuitable for thoroughly analyzing this issue. With polynomial regression and response surface analysis combined with dyadic data, we test the relationship between (1) balanced dependence (i.e., the buyer and supplier are equally dependent on each other) and supplier satisfaction and (2) asymmetric dependence (i.e., either the supplier or buyer is the dominant party) on supplier satisfaction. The results indicate that mutual dependence is positively related to supplier satisfaction, but surprisingly, asymmetric dependence can be related to higher levels of supplier satisfaction.
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TL;DR: In this paper, the role of procurement professionals in new product design is examined and the authors evaluate which factors play an important role in driving design for procurement (DFP) environmental and economic results, including early supplier involvement, standardization, lead time reduction, environmental sourcing, supply base maintenance and core competence focused sourcing.
Abstract: This study examines the role of procurement professionals in new product design. Specifically, it evaluates which factors play an important role in driving design for procurement (DFP) environmental and economic results. The factors early supplier involvement, standardization, lead time reduction, environmental sourcing, supply base maintenance, and core competence focused sourcing are regressed on diverse DFP performance outcomes. Data were collected via survey for a series of procurement focused items capturing the activities and characteristics for new product design and performance. Several major findings were supported through the analysis that enhance academic and managerial knowledge. Standardization positively impacted economic performance measures that focused on new product development and operational outcomes. Supply based maintenance was the strongest DFP initiative driving operational performance. Environmental sourcing positively affected all environmental performance measures, but was not related to economic performance.
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TL;DR: In this paper, a weighted additive fuzzy multi-objective model is proposed to simultaneously consider the imprecision of information and the relative importance of objectives for determining the allocation of order quantity and emergency capacity to each supplier.
Abstract: The main contribution of this paper is to develop a new decision tool that interprets strategies for determination of resilient supply portfolio under supply failure risks. The strategic decisions include the allocation of emergency capacities to be pre-positioned at backup suppliers, the output of which can be increased in the event of mitigating a shortage caused by another supplier's failure. The model contains three objective functions – minimising the total cost, minimising the net rejected items and minimising the net late deliveries – while satisfying capacity and minimum order quantity requirement constraints. A weighted additive fuzzy multi-objective model is proposed to simultaneously consider the imprecision of information and the relative importance of objectives for determining the allocation of order quantity and emergency capacity to each supplier. The application of the proposed model is illustrated using an example case of global supply chains with different supplier characteristics.
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TL;DR: In this paper, the authors investigate the relationship between transaction characteristics and social embeddedness, and ex ante cost and ex post problems, and explore whether the same relationships hold across transactions that involve only goods versus transactions that also involve services.
Abstract: Several studies suggest that, in practice, service procurement is more challenging than goods procurement. The underlying but largely implicit argument is that the procurement process for services involves higher buyer uncertainty and therefore requires extra efforts to mitigate this uncertainty. Drawing on Transaction Cost Economics, we use a database of information technology transactions to investigate the relationship between transaction characteristics and social embeddedness, and ex ante cost and ex post problems. We explore whether the same relationships hold across transactions that involve only goods versus transactions that also involve services. Our findings support conventional wisdom that managing the procurement process for transactions involving services is more challenging than for transactions involving goods. However, when controlling for typical transaction characteristics, there is no difference between transactions involving goods and transactions that also involve services.
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TL;DR: In this article, a taxonomy of commodity price risk mitigation strategies and factors that may influence the adoption of these strategies is provided, based on case studies of companies with home operations in Italy, Germany, and the US.
Abstract: Most firms are exposed to price volatility associated with commodities, which can significantly affect the price paid for raw materials, energy, packaging, shipping, and component purchases. Commodity price risk represents the financial, operational and informational effects of commodity price volatility (CPV). The purpose of this paper is to contribute to the supply chain risk management literature by providing a taxonomy of commodity price risk mitigation strategies and factors that may influence the adoption of these strategies. A qualitative study was conducted using a grounded theory approach, based on case studies of companies with home operations in Italy, Germany, and the US. The paper provides some initial evidence for theory and practice as to: 1) how firms can mitigate the risk from CPV by implementing various sourcing, contracting, and financing strategies; and 2) the influence of commodity/product factors, buying organization factors, supply chain factors, and external environment factors on strategy capability and choice.
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TL;DR: In this article, the role of network connectedness in new equity based joint venture formations was investigated from a power perspective, and it was shown that structural network based power is a significant explanatory mechanism in new joint venture formation.
Abstract: In the supply chain management (SCM) domain, research has been advanced to understand the role of network structure in buyer-supplier relations. Yet, while there has been a substantial body of work investigating supply chain networks, little research has paid attention to how the network structure affects the power balance between manufacturers and suppliers. This study investigates, from a power perspective, the role that network connectedness plays in new equity based joint venture formations. As such, we further the understanding of supply chain networks by examining network structure as a mechanism from which firms derive power. We articulate several hypotheses rooted in both network and power theories by specifically examining, from a power perspective, factors such as eigenvector centrality, closeness centrality, and weak components centrality. Further, we differentiate between horizontal and vertical joint venture configurations and elucidate the moderating effect it has in engendering new manufacturing joint venture formations. Empirical results show that structural network based power is a significant explanatory mechanism in new joint venture formation, and specifically, that power is, and should be a primary consideration in supply chain partnership decisions.
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TL;DR: In this article, a case study based on exploratory case study research involving a single case from the manufacturing sector featuring a large multinational buyer and its supplier is presented, which shows that organizational buying behavior in co-operation develops through interrelated activities on the individual, the organizational and the relational level.
Abstract: This article offers a new and interesting perspective on organizational buying behavior by focusing on the simultaneous existence of both cooperation and competition, that is, coopetition. Coopetition may bring undesired knowledge leaks, opportunism, and weakened competitive advantage, and it is therefore important to understand how coopetition develops over time through interrelated activities on multiple levels. The article aims to improve our understanding of the development of organizational buying behavior through adopting a multilevel perspective on coopetition. The empirical study is based on exploratory case study research involving a single case from the manufacturing sector featuring a large multinational buyer and its supplier. The findings of the study show that organizational buying behavior in coopetition develops through interrelated activities on the individual, the organizational, and the relational level. Over time, dominating activities evolve from being ambivalent on an individual level to become authoritative on a company level and finally to being opportunistic on a relational level. Theoretically, this study contributes to organizational buying behavior literature by examining coopetition from a multilevel perspective. From a managerial perspective, the findings establish the importance of recognizing individual-, and organizational-level activities.
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TL;DR: In this paper, the authors draw on the knowledge-based view and develop a hypothesized model in which supply knowledge acquisition drives PSM exploration and exploitation orientations which in turn mediate the organizational status of PSM function in terms of supply performance.
Abstract: Given the increasingly strategic role of external resources, acquiring knowledge about current suppliers and the broader supply market is an important and demanding task for the purchasing and supply management (PSM) function of a firm. Performance-improvement-oriented application of external supply knowledge present further challenges for the function. To examine this, we draw on the knowledge-based view and develop a hypothesized model in which supply knowledge acquisition drives PSM exploration and exploitation orientations which in turn mediate the organizational status of PSM function in terms of supply performance. We test the model on an SME-focused and survey-based dataset, using structural equation modelling. Our results indicate that an exploitative orientation is associated with knowledge gained from the supply base, whereas an explorative orientation is predominantly associated with supply market knowledge and less with supply base knowledge, suggesting natural pairings. The findings also show how an exploitative development orientation mediates the positive association of the PSM function's organizational status with supply performance. Driven by supply base knowledge, a status-empowered exploitative PSM orientation may suppress supply market based explorative orientation in resource-scarce SMEs, thus appearing to serve as the sole path to supply performance. Our research contributes by pointing out the significance of the knowledge-resource, and the knowledge-based view, in understanding performance in PSM.
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TL;DR: In this paper, a case study of a company in the international marine industry, which intended to switch one of its key suppliers for a new one as a result of cost-cutting strategies and dissatisfaction with the old supplier, was presented.
Abstract: This paper employs a practice perspective to study and conceptualize supplier-switching processes in business relationships. It is based on case study research of a company in the international marine industry, which intended to switch one of its key suppliers for a new one as a result of cost-cutting strategies and dissatisfaction with the old supplier. The case study describes the process, which ended with the old supplier being only partially switched. The findings show how (partial) switching from one supplier to another happened via three key sub-processes and associated practices, which the involved actors in the case drew upon in the switching process: (1) initiation – a process enabled by legitimizing and search practices; (2) substitution – a process enabled by transfer, translation, and transformation practices; and (3a) stabilization – a process enabled by institutionalizing practices; and (3b) restoration – a process whereby the old supplier is retained as a result of new conditions, this retention being enabled by certain repair practices. By identifying the processes and practices that enable switching to happen, the findings offer an initial conceptualization of supplier-switching processes, which comprises an important and heretofore underexplored aspect of supplier switching. The research highlights the importance of recognizing how relationships embedded in interorganizational routines are produced and reproduced in the switching process through the actions and interactions of the actors involved.
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TL;DR: In this paper, a case study using healthcare purchasing data from eight Department of Veterans Affairs medical centers is presented to determine the buy characteristics that are most likely to generate mandated savings within the medical centers, in conjunction with achieving sustainability goals.
Abstract: Strategic sourcing has long been utilized by organizations to maximize budget efficiency. The process includes a spend analysis, which historically has been performed by identifying the commodities and services purchased that resulted in the greatest spend, and establishing contracts with suppliers for these items in an effort to decrease the overall price through quantity discounts. This process restricts the data used in the spend analysis process to basic transactional information, and has not considered corporate social responsibility objectives as part of the strategic sourcing process. This paper modifies an existing spend analysis process framework, and applies the framework in a case study that uses additional data points to identify opportunities that allow an organization to simultaneously achieve both strategic purchasing and social responsibility objectives. The case study uses healthcare purchasing data from eight Department of Veterans Affairs medical centers. The goal of the model generated using regression analysis in the case study is to determine the buy characteristics that are most likely to generate mandated savings within the medical centers, in conjunction with achieving sustainability goals. The extensions of the regression model were examined to determine how collaborative buyer/supplier relationships can achieve organizational strategic objectives.