Showing papers in "Journal of Supply Chain Management in 2001"

Purchasing's Role in Environmental Management: Cross-Functional Development of Grounded Theory

Abstract: SUMMARY Are government regulations a driver or barrier to environmental activities? Does greater functional involvement within a firm help to ensure the success of environmental projects? Do environmental projects improve or harm financial performance? This research finds that none of these questions can be answered with a simple “yes” or “no.” Instead, this article distinguishes between successful and unsuccessful environmental projects, through an examination of not only their consequences but also their drivers and barriers and the functional interplay that occurs during their implementation. The findings result from an inductive study leading to theory grounded in the data but related to extant findings, and are based on case studies that tap the perspectives of purchasing managers and the managers in multiple, additional functional areas with whom they interact when initiating environmental projects.

A Taxonomy of Supply Networks

Abstract: SUMMARY There has been limited research into how different types of supply networks can be created and operated. This article develops a taxonomy of supply networks with a particular focus on managing network creation and operation. The taxonomy is based on a review of network literature from various academic perspectives and extensive empirical data across a variety of industry sectors including automotive, fast-moving consumer goods, electronics, pharmaceuticals, and communications technologies. The main differentiating factors for classifying a matrix of four types of supply network are found to be the degree of supply network dynamics and the degree of focal company supply network influence. Network characteristics and different patterns ofnetworking activities are identified for each type of supply network.

Supplier Evaluation and Rationalization via Data Envelopment Analysis: An Empirical Examination

Abstract: SUMMARY Strategic evaluation of supplier performance assists firms in improving their operations across a variety of dimensions. Specifically, it aids in supplier process improvement, which in turn enhances firm performance, allows for optimal allocation of resources for supplier development programs, and assists managers in restructuring their supplier network based on performance. In order to address these issues, this article proposes a methodology for effective supplier performance evaluation based on data envelopment analysis (DEA), a multi-factor productivity analysis technique. The efficiencies derived from the DEA model are utilized in conjunction with managerial performance ratings in identifying supplier clusters, which are categorized into high performers and efficient (HE), high performers and inefficient (HI), low performers and efficient (LE), and low performers and inefficient (LI). Effective benchmarks from the HE cluster are identified for improving the operations of suppliers in the HI, LE, and LI clusters. Finally, managerial insights and implications from the study are discussed.

Transparency in Supply Relationships: Concept and Practice

Abstract: SUMMARY The problems associated with transparency in supply relationships — the two-way exchange of information and knowledge between customer and supplier — represent chronic difficulty for managers. The sensitivity of such exchanges appears to interfere with — even to negate — their effectiveness and value. This may be because of insufficient consideration of types of transparency and a propensity for customer domination in the relationship. This research is aimed at exploring these difficulties in order to understand the dynamics and varying nature of transparency in this context (including a proposed state of value transparency) and to suggest ways in which it might be approached in practice. In addition to the social and technology-led drivers identified for transparency, the research approach to the concept in supply has been driven by the observation that many of the traditional routines and activities occurring between industrial or commercial purchasers and their suppliers can be unnecessary and wasteful. This article presents the background to this hypothesis and records the development of a framework for discussion of the concept.

Electronic Procurement in Supply Chain Management: An Information Economics‐Based Analysis of Electronic Markets

Abstract: SUMMARY Electronic procurement is currently one of the most discussed topics in supply management. Without doubt, it will dramatically change the way purchasing is done in the near future. Telgen (1998) calls it a “revolution through electronic purchasing.” This article analyzes the possibilities of electronic marketplaces for buyers, primarily from a theoretical perspective. The article develops an analytical framework that is based on information economics theory, which may be the most important theory to analyz market problems in general. It is combined with a systematic approach for procurement transactions based on Williamson's (1985a) transaction theory. An e-procurement matrix is developed that could help to systematize different e-procurement instruments. Various data types available from electronic marketplaces are analyzed with a business model for electronic marketplaces. These business models show the real value added by e-procurement.

The Resource Based Perspective, Rents, and Purchasing's Contribution to Sustainable Competitive Advantage

Abstract: SUMMARY The resource based perspective (RBP) within the field of strategy seeks to understand the relationship between a firm's resources and its competitive advantage. Some RBP authors have concluded that it is logically impossible for organizations to generate sustainable competitive advantage from purchasing activities. One of this article's central objectives is to test the validity of that conclusion. It is hoped that the completion of that task may make it possible to assist in the process of raising the purchasing function's strategic profile in the modern firm.

Business‐to‐Business Online Purchasing: Suppliers' Impact on Buyers' Adoption and Usage Intent

Abstract: SUMMARY Experts predict that the Internet will become the primary low-cost network for business-to-business commerce transactions. Both buying and selling firms can benefit from the cost savings and productivity improvements associated with online purchasing. Although more organizational buyers are turning to the Internet for purchasing activities, challenges exist as some buying firms harbor concerns. To assist suppliers in the development of effective strategies aimed at increasing online purchasing among professional buyers, a study was designed to investigate the impact of supplier support on buyers' adoption of the Internet for corporate-related purchasing activities. Path analysis was used to examine the relationships among four variables: supplier support, communication convenience, buyer adoption behavior, and Internet usage intent. The results suggest that suppliers play a critical role in the adoption of this new innovation. By offering encouragement, guidance (e.g., training), and incentives (e.g., price discounts) and by stressing convenience of use, suppliers can increase the likelihood that buyers will adopt and use this new method for purchasing.

A configuration typology for involving purchasing specialists in product development

Abstract: SUMMARY This article develops a configuration typology for purchasing's involvement in product development projects. Six configurations are identified and analyzed, varying in degree of coordination and level of purchaser integration. The configurations are illustrated by five case studies performed in different companies operating in different industries. Enabling factors, such as the purchasing organization and the competencies and skills of the purchasers, can facilitate the involvement of purchasers in a development project. Project size and project complexity can be identified as driving factors influencing the appropriateness of the purchaser involvement configurations. Dedicated, full-time purchasing specialists in combination with a purchasing coordinator provide the strongest degree of involvement necessary for managing large and complex projects, whereas indirect, ad hoc purchasinginvolvement provides the lowest degree of involvement sufficient for small and relatively simple projects.

The Supply Organizational Structure Dilemma

Abstract: SUMMARY This article presents the findings of research into how and why large, multiunit firms make major changes to the organizational structure of the supply function. The research used case-based methodology to investigate 10 large companies that had recently made a major supply structure change. A total of 15 major supply organizational changes were studied at the 10 sites. The research found that these major changes were a result of changes in the overall corporate structure, challenging the conventional view found in standard purchasing texts that supply executives have flexibility in matters of organizational design. The research identified that a common driver for corporate organizational change in each of the sites studied involved an attempt by the company to improve its cost structure. Chief financial officers (CPOs), business unit managers, consultants, and chief purchasing officers (CPOs) were all identified as having involvement in the supply organizational structure change process at some sites. A principal challenge for CPOs is to understand how to provide supply improvement opportunities under any organizational structure.

Benchmarking Internal Supply Chain Performance: Development of a Framework

Abstract: SUMMARY This article develops performance measures that can be computed through publicly available information. The article describes an approach for benchmarking using these performance measures and demonstrates how meaningful results may be derived from this exercise. By following this framework, a firm can identify areas of opportunity for improvement in its internal supply chain. Further, the framework can help to identify specific reasons behind the performance levels in the internal supply chain and stimulate performance improvement. To illustrate the framework, it is applied to the paint industry. The framework provides meaningful results for the firms in the industry.

Vertical Cooperation in the Construction Industry: Size Does Matter. (Summary)

Abstract: SUMMARY The construction industry is characterized by opportunistic behavior and the lack of vertical cooperation. This article shows how game theory explains this phenomenon and helps to solve it. When the same individuals have to deal with each other in a series of projects, cooperation is more likely to occur than when they deal with a different individual in each project. Supported by an experiment with managers in a construction firm, it was found that particularly in large construction companies, individuals rarely deal with the same individuals at subcontractors. The business recommendation following from this is to adopt an explicit policy of appointing account managers both at the purchasing side of the contractor and the marketing side of the subcontractor to deal with the mutual contacts between the organizations involved.

The Use of Intermediate Sourcing Strategies

Abstract: SUMMARY Much of the existing literature discusses vertical integration and competitive spot bidding as sourcing strategy choices, but often neglects intermediate sourcing strategies, such as taper integration and long-term supplier relationships. This exploratory study examines the extent to which firms use intermediate sourcing strategies, as opposed to the polar strategies, and attempts to improve our understanding of the sourcing choices available to manufacturing firms. Results from a sample of 209 plant managers indicate that firms use taper integration and long-term supplier relationships more frequently than vertical integration and competitive spot bidding. Further, the choice of a sourcing strategy was found to be dependent on the industry.

Vertical Cooperation in the Construction Industry: Size Does Matter

Abstract: SUMMARY The construction industry is characterized by opportunistic behavior and the lack of vertical cooperation. This article shows how game theory explains this phenomenon and helps to solve it. When the same individuals have to deal with each other in a series of projects, cooperation is more likely to occur than when they deal with a different individual in each project. Supported by an experiment with managers in a construction firm, it was found that particularly in large construction companies, individuals rarely deal with the same individuals at subcontractors. The business recommendation following from this is to adopt an explicit policy of appointing account managers both at the purchasing side of the contractor and the marketing side of the subcontractor to deal with the mutual contacts between the organizations involved.

Managing Supplier Involvement in Process Improvement in Manufacturing

Abstract: SUMMARY This research examines strategies for maximizing supplier contributions to process development/improvement in manufacturing organizations. One hundred and sixty-nine senior purchasing managers who are employed by manufacturing firms responded to a mail questionnaire regarding purchasing and supplier involvement in process development/improvement. “Process” was defined as “any production/operations process that used materials and supplies, capital equipment, labor, and information to convert inputs into products/services.” One hundred and thirty-five respondents indicated that suppliers are involved in process development/improvement in their organizations. Stepwise multiple regression was used to identify variables that affect supplier effectiveness when they are involved. The results indicate that supplier contributions to process development/improvement are facilitated when the firm processes are a source of competitive advantage, there is comprehensive involvement by purchasing, and decisions regarding supplier involvement are not overly structured. Implications of this research for supply chain practitioners, teachers, and researchers are discussed.

Inter‐Firm Linkages and Profitability in the Automobile Industry: The Implications for Supply Chain Management

Abstract: SUMMARY The current studies on supply chain management are limited in their analysis of the linkages between firms in related industries. This study estimates the degree of linkages between automotive parts suppliers and automobile manufacturers. Significant linkages are demonstrated by the high correlation coefficients of the P/E ratio of auto parts suppliers and auto manufacturers and by the results of regression analysis. Demand uncertainty in the automobile manufacturing industry, resulting from business cycles and unexpected labor disputes, is one of the major risks facing auto parts suppliers. Risk assessment, utilizing information on linkages, is important for demand management and developing profit-maximizing strategies.

The Purchase of Information Technology Products by Dutch SM Es: Problem Resolution

Abstract: SUMMARY This research focuses on the purchase of information technology (IT) products by small and medium-sized enterprises (SMEs) in the Netherlands. Based on nationwide representative survey data (a total of 1,252 IT transactions), the research considers the problems that Dutch SMEs are faced with and the way in which these problems are dealt with. On average, 28 percent of transaction are completed without problems. If problems are encountered, they mostly involve inadequate documentation (45 percent of all transactions). Frequently mentioned problems, such as incompatibility with other IT products and being over budget, occur much less frequently (about 25 percent of all transactions). Moreover, strong support was found for the existence of a specific sequence in dealing with ex-post problems. Nearly all SMEs at least communicate the problem to the supplier; if that does not solve the issue, it is almost always followed by active deliberation with the supplier about a solution. If that does not help, about half of the SMEs impose some kind of sanction (most of the time delaying the payment). If that still does not settle the issue, virtually all SMEs give up on it. Third parties, such as arbitration committees or the courts, are rarely invoked.

The Impact of Supplier Visions on Product Development

Abstract: SUMMARY This article explores the impact of visions for suppliers in outsourcedproduct development, the creation of visions for suppliers, and finally, the interplay between visions for suppliers and core capabilities of originalequipment manufacturers (OEMs). Developing visions for suppliers can help OEMs to create clear expectations and thus better utilize the core capabilities of the buyer and supplier firms. Data for this research were collected in one automotive OEM and two of its first-tier suppliers, all based in Europe. The results of the study suggest that the creation of visions for suppliers impacts the development process positively. Further, the presence of visions for suppliers affects the core capabilities of the OEMs.