Guest Editorial: A purchasing and supply management view of supply resilience for better crisis response

Purchasing and supply management (PSM) has been under great pressure since the COVID-19 pandemic first shook the world. Companies and public organizations faced new kinds of supply disruptions, and at a scale never seen before. New response abilities were required from PSM to address these challenges and disruptions. This Editorial introduces four articles in the Special Issue on “PSM learning from the pandemic: transforming for better crisis management.” These empirical contributions show how companies could build resilience to survive and be competitive during the COVID-19 pandemic. This Editorial discusses how supply resilience should be conceptualized in post-pandemic supply chains adopting a PSM perspective. We suggest that supply resilience practices should be developed and planned according to whether they strengthen existing supply chain relationships (bridging) or establish new ones (buffering) and whether they are short-term (temporary) or long-term (permanent) orientated. Furthermore, three supply resilience capabilities, absorbing, responding and capitalizing, should be prioritized in supply chains for responding to and recovering from global crises and disruptions. Supply resilience is key to crisis response and recovery, and PSM has an essential role in building and sustaining that resilience.     

Where we are heading and the research that can help us get there – Executive perspectives on the anniversary of the Journal of Purchasing and Supply Management

Procurement is a young field with much potential for further business impact in industry and insight generation through research. In this article four executives from different industries and continents offer their perspective on procurement, purchasing and supply management (PSM) capability development potential and research that can support this. These executives each addressed one of the following important themes and provided candid comment regarding the nexus between academia and practice. (1) Emerging industry 4.0 technologies that can enable new PSM capability development. These technologies should be evaluated in terms of what PSM challenges they can help resolve, not just in terms of how technically promising they may be. (2) PSM talent is key to the realization of new PSM capability and the development of this talent will require executive engagement in creating lifelong learning opportunities for PSM professionals to ensure new competencies and capabilities. (3) Sustainability efforts that are often housed in PSM organizations have much potential to expand these efforts more comprehensively throughout the supply chain and to expand the scope of the efforts. (4) Supplier enabled innovation (SEI) offers a pathway for PSM to meet current business needs with suppliers but also to collaborate with suppliers to create new revenue and customer value. The successful achievement of future PSM capability will require leadership in industry and research to help close the gap between known opportunity areas and actual real-world accomplishment. These executive perspective help us to realize that simplified roadmaps and maturity models underestimate interrelations between these four areas of opportunity and no “single path” currently exists.     

Covid-19 attacks the body of purchasing and supply management: A medical check of the immune system

Much like the immune system of the body, the ‘immune system’ of purchasing and supply management (PSM) is also affected by the Covid-19 virus. Medicine must hinder the spread of the virus and outbreak of disease, just as PSM must prevent risk events and handle supply disruptions. The existing debate on supply resilience and robustness can be demonstrated using this medical analogy. The purpose of this article was to perform a medical check of the ‘PSM immune system’ to identify lessons and research gaps when confronted with a low-frequency-high-impact event such as the pandemic. As a provocative note, this article identifies research gaps in elements of the immune system of PSM (e.g., helper cells – consultancy support or memory cells – feedback loops). The results call for a more holistic debate on the immune system of PSM. Two approaches for research on ‘conventional’ or ‘alternative’ risk management schools of thought are presented as a basis for future discourse on how to improve the PSM immune system.     

Larger,counter-intuitive and lasting – The PSM role in responding to the COVID-19 pandemic,exploring opportunities for theoretical and actionable advances

PSM has played an important role in the initial mitigation of risks caused by the COVID-19 pandemic. We explore the nature and scope of this role and develop a roadmap for PSM contributions towards greater supply chain resilience. We find that the role of PSM is (1) multidimensional; responding to supply risks but also to demand and logistics risks, (2) counter to game theory; collaboration increased instead of decrease, (3) multi-stage; beyond the initial response the hardest change efforts are still ahead. The pandemic is accelerating the journey towards future-proof PSM but not necessarily revolutionizing the future of PSM.     

Researching the future of purchasing and supply management: The purpose and potential of scenarios

Drawing on prior research, the value of scenario planning as a methodology for researching the future of purchasing and supply management (PSM) is explored. Using three criteria of research quality – rigour, originality and significance – it is shown how developing scenarios and analysing their implications present new, important research opportunities for PSM academics, practitioners, and leaders of the profession. Researching the future of PSM supports the identification of uncertainties and anticipates change across many units and levels of analysis of interest to PSM scholars and practitioners, such as the profession/discipline, markets/sectors, or organisations. Scenarios are particularly effective for: considering how the complex interaction of macro-environmental factors affects the PSM context; avoiding incremental thinking; surfacing assumptions and revealing significant blind spots. PSM research using scenarios aligns with Corley and Gioia's (2011) call for prescience-oriented research in which academics aim for more impactful research, enhancing sense-giving potential and theoretical relevance to practice, to better perform their adaptive role in society.     

Supply chain finance: Historical foundations,current research,future developments

It is widely agreed that supply chains encompass and integrate material, information, and financial flows across organizations. There is a robust history and continually expanding research agenda investigating supply chain management practice and theory associated with material and information flows and processes. However, the management of financial flows from a supply chain perspective and in combination with the other flows, usually referred to as supply chain finance (SCF), has been under-investigated. Our understanding of SCF approaches and solutions in purchasing and supply management (PSM) is only starting to form. The purpose of this editorial is to provide some grounding of initial studies and concepts of SCF, illustrate new and emerging thought in this discourse with articles published in this special issue, and speculate how the SCF domain may evolve in theory and practice with the advent of new digital technologies and big data analytics.     

Getting back into the swing of things: The adaptive path of purchasing and supply management in enhancing supply chain resilience

The COVID-19 crisis posed significant challenges to global supply chains (SCs) and exposed their vulnerability to disruption. As SCs have evolved into complex structures comprising a multitude of globally dispersed companies that collaborate closely with one another, purchasing and supply management (PSM) have played a key role in addressing the crisis. The existing PSM measures for increasing supply chain resilience (SCRES) were stress tested and it became evident that these methods are applicable only to a limited extent due to their static perspective and their lack of a network character. Thus, this paper examines the role of PSM by identifying implemented response measures. By conducting 40 semi-structured interviews with experts from original equipment manufacturers and first-tier suppliers in the German automotive industry, a comprehensive overview of the industry was obtained. To reflect the network nature of the industry and the adaptive path of PSM, the data analysis is framed by resource dependence theory and the adaptive cycle approach. The results of the study are 25 response measures of PSM to enhance SCRES, categorized into three waves of measures: initial measures upon the occurrence of the disruption, temporary measures during the disruption, and post-disruption measures. In this way, the study contributes to the existing literature by demonstrating that PSM takes on a major role in increasing resilience by implementing diverse response measures. In addition, the study shows that PSM follows the path of an adaptive cycle, and that after the disruption and the initial and temporary measures, PSM adapts, which is reflected in the post-disruption measures. For practitioners, the study provides a list of response measures to increase resilience that can be used to review existing measures or implement new ones.     

A processual analysis of the purchasing and supply organization in transition: the impact of offshoring

Many companies have resorted to offshoring in order to reduce costs and grow their global market presence. Yet it remains unclear what impact the offshoring strategy has on the purchasing and supply organization (PSO) of these companies. In this paper the nature and type of changes offshoring organizations make within the PSO are examined, i.e. how new purchasing and supply management (PSM) structures and practices emerge, are maintained or are discarded as production operations are relocated. The processual perspective is used to analyze empirical data from a rich, in-depth case study within a global engineering company. Results suggest that in line with the law of requisite variety the PSO changes thoroughly when the company relocates its production activities through the captive offshoring mode, but does so in a more disjointed and non-linear manner than the current stage models would suggest. The offshoring process provides momentum for PSO change and influences where and how the change happens. We present five propositions for further research and conclude that offshoring provides managers with opportunities to: (i) change and influence the strategic direction of PSM in their organizations, and (ii) build viable strategies of retaining and managing knowledge and PSM competencies in global operations.     

Future business and the role of purchasing and supply management: Opportunities for ‘business-not-as-usual’ PSM research

The raison d'être for this article is simple: traditional ways of researching, theorizing, and practicing purchasing and supply management (PSM) are no longer sufficient to ‘meet the moment’. Scholars need to advance a “business-not-as-usual” footing approach to their work, if they are to make a meaningful contribution to addressing the current and future emergencies, as highlighted by recent extreme weather and the COVID-19 pandemic. Yet, what can this, or should this, mean for a field rooted in traditional business thinking? This article builds on the Journal of Purchasing and Supply Management's (JPSM) 25th Anniversary Special Issue editorial (2019); members of the JPSM's editorial team advance their unique perspectives on what “business-not-as-usual” means for PSM. Specifically, we advocate both thinking much more widely, in scope and ambition, than we currently do, and simultaneously building our ability to comprehend supply chains in a more nuanced and granular way. We explore whether the bias toward positivist work has omitted potentially interesting findings, and viewpoints. This leads to a call to re-think how we approach our work: should the key criteria always be to focus on theory development or testing? Should academics “think bigger”? Turning to specific research themes, illustrations of how our current thinking can be challenged or broadened by addressing the circular economy, and role of purchasing and innovation. Specifically, the focus on the PSM function as an intrapreneur within the larger organization, and the role of innovation and technology in PSM work. Taken together, we hope the ideas and arguments presented here will inform and inspire ambitious and novel approaches to PSM research with significant and enduring impact on the transformation of business.     

The status of purchasing and supply management in Finland and Russia

Previous studies have shown that long-term planning, collaborative supplier relationships and supply management capabilities reflect the strategic role and importance of purchasing and supply management (PSM) in firms, regardless of the nature of the business. This study examines how these elements behave in different business environments, such as in Western countries and emerging economies. Finland and Russia were chosen to represent two extremes in terms of international economic competitiveness and the business environment. A survey was conducted in both countries. Regression analyses were run from both samples to examine the effects of long-term planning, collaborative supplier relationships and supply management capabilities on the status of PSM by using data from 100 Finnish firms and 208 Russian firms. The results showed that these elements positively influence the status of PSM in both countries.     

New ways of working (NWW): Workplace transformation in the digital age

In the introductory paper of this special issue on new ways of working (NWW) the editors first reflect on the meaning of the ‘new’, finding inspiration in Hannes Meyer's essay “The New World” (1926). The ‘new’ is always relative, of course, closely associated with technological innovation, in our case digitalization, and integrates spatiotemporal, technological and socio-cultural dimensions of life and organizing. This SI seeks to offer a reflection on and contribution to deeper understanding of ongoing flexibilization, virtualization and mediation of work practices. The authors go on to contextualize and discuss the contributions of the papers included in this special issue, focussing on significant technological, spatiotemporal, organizational and individual developments associated with new ways of working. Finally, they reflect on the possible relevance of the recent Covid-19 pandemic for the future of work, arguing that this pandemic accelerated NWW in many ways and – given the many paradoxical NWW dynamics and developments – that there could very well be unexpected and adverse consequences, including a turn away from formal ways of working.     

The impact of the COVID-19 pandemic on business expectations

We document and evaluate how businesses are reacting to the COVID-19 crisis through August 2020. First, on net, firms see the shock (thus far) largely as a demand rather than supply shock. A greater share of firms report significant or severe disruptions to sales activity than to supply chains. We compare these measures of disruption to their expected changes in selling prices and find that, even for firms that report supply chain disruptions, they expect to lower near-term selling prices on average. We also show that firms are engaging in wage cuts and expect to trim wages further before the end of 2020. These cuts stem from firms that have been disproportionally negatively impacted by the pandemic. Second, firms (like professional forecasters) have responded to the COVID-19 pandemic by lowering their one-year-ahead inflation expectations. These responses stand in stark contrast to that of household inflation expectations (as measured by the University of Michigan or the New York Fed). Indeed, firms’ one-year-ahead inflation expectations fell precipitously (to a series low) following the onset of the pandemic, while household measures of inflation expectations jumped markedly. Third, despite the dramatic decline in firms’ near-term inflation expectations, their longer-run inflation expectations have remained relatively stable.     

Fed Credit Policy: What is a Lender of Last Resort?

Discussions of the Fed׳s financial crisis lending – and its role as “Lender of Last Resort” more generally – often overlook the distinction between monetary policy and credit policy. Central bank actions constitute monetary policy if they alter the quantity of the bank׳s monetary liabilities, but constitute credit policy if they alter the composition of the bank׳s portfolio without affecting the outstanding amount of monetary liabilities. In the 19th century, Henry Thornton and Walter Bagehot advocated Lender of Last Resort policies as a means of expanding the money supply when the demand for money surged in a crisis. In contrast, the Fed׳s recent crisis lending for the most part left its outstanding monetary liabilities unaffected, and thus represented credit policy, not Lender of Last Resort activity. Credit allocation in a crisis is potentially costly because it affects market participants׳ beliefs about the likelihood of future central bank rescues, which in turn reduces their incentive to protect themselves against financial distress and thus exacerbates financial instability. Credible limits on credit policy thus are critical to central banks׳ core policy mission. One path to establishing such limits is to create “living wills” that detail how to resolve large, complex financial firms without government support.     

One crisis,different paths to supply resilience: The case of ventilator procurement for the COVID-19 pandemic

This research explores supply resilience through an equifinality lens to establish how buying organizations impacted differently by the same extreme event can strategize and all successfully secure supply. We conduct case study research and use secondary data to investigate how three European governments sourced for ventilators during the first wave of COVID-19. The pandemic had an unprecedented impact on the ventilator market. It disrupted already limited supply and triggered a demand surge. We find multiple paths to supply resilience contingent on redundant capacity and local sourcing options at the pandemic's onset. Low redundancy combined with limited local sourcing options is associated with more diverse strategies and flexibility. The most notable strategy is spurring supplier innovation by fostering collaboration among actors in disparate industries. High redundancy combined with multiple local sourcing options is associated with more focused strategies and agility. One (counter-intuitive) strategy is the rationalization of the supply base.     

Reshaping healthcare supply chain using chain-of-things technology and key lessons experienced from COVID-19 pandemic

The COVID-19 (Corona virus disease 2019) pandemic continues to slash through the entire humanity on the earth causing an international health crisis and financial uncertainty. The pandemic has formed a colossal disruption in supply chain networks. It has caused piling higher mortality in patients with comorbidities and generated a surging demand for critical care equipment, vaccines, pharmaceuticals, and cutting-edge technologies. Personal protective equipment, masks, ventilators, testing kits, and even commodities required for daily care have been scarce as lockdown and social distancing guidelines have kicked in. Amidst COVID-19, implementing and executing key processes of the healthcare supply chain (HSC) in a secured, trusted, effective, universally manageable, and the traceable way is perplexing owing to the fragile nature of the HSC, which is susceptible to redundant efforts and systemic risks that can lead to adverse impacts on consumer health and safety. Though the crisis shone a harsh light on the cracks and weaknesses of the HSC, it brings some significant insights into how HSC can be made more resilient and how healthcare industries figure out solutions to mitigate disruptions. While there are innumerable experiences learned from the disruption of this crisis, in this paper, five important areas to analyze the most vital and immediate HSC enhancements including building a resilient supply chain, thinking localization, implementing reliable reverse logistics, breaking down extant silos to achieve end-to-end visibility, and redesigning HSC using digitalization are emphasized. This work identifies important features related to CoT and HSC. Also, this study links these lessons to a potential solution through Chain of Things (CoT) technology. CoT technology provides a better way to monitor HSC products by integrating the Internet of Things (IoT) with blockchain networks. However, such an integrated solution should not only focus on the required features and aspects but also on the correlation among different features. The major objective of this study is to reveal the influence path of CoT on smart HSC development. Hence, this study exploits (i) fuzzy set theory to eliminate redundant and unrelated features; (ii) the Decision-Making and Experimental Evaluation Laboratory (DEMATEL) method to handle the intricate correlation among different features. This fuzzy-DEMATEL (F-DEMATEL) model attempts to direct CoT technology towards smart HSC by identifying the most influencing factors and investors are recommended to contribute to the development of application systems. This work also demonstrates how CoT can act a vital role in handling the HSC issues triggered by the pandemic now and in the post-COVID-19 world. Also, this work proposes different CoT design patterns for increasing opportunities in the HSC network and applied them as imperative solutions for major challenges related to traditional HSC networks.     

Managing supplier sustainability risks in a dynamically changing environment—Sustainable supplier management in the chemical industry

Varying definitions and interpretations of sustainability standards have become a major concern for purchasing and supply management (PSM). As the foremost interface to an increasingly global supply base, PSM plays an important role in the mitigation of sustainability-related risks. By conducting responsible purchasing and supplier management, the risk of corporate reputational damage to the buying firm, caused by supplier misconduct, can be avoided. However, resources for effective risk-mitigation are limited and the applicability of supply risk assessment and supplier assessment methods have not been evaluated for sustainability. In this paper, we explore how leading PSM functions identify, assess, and treat supplier sustainability risks and elaborate on the integration of sustainability risk management in supplier management processes. Based on the findings from a multiple case study in the chemical industry and by drawing on the dynamic capabilities view (DCV), we propose that mature and sustainable supplier management capabilities are a source of competitive advantage in terms of lower exposure to reputational risks and enhanced operational performance.     

An empirical analysis: Did green supply chain management alleviate the effects of COVID-19?

Supply chain management played a central role during the COVID-19 crisis, as the outbreak of the pandemic disrupted the majority of all global supply chains. This paper tests whether companies that use green supply chain management (GSCM) practices benefited from a buffer effect in the context of COVID-19. Our empirical analysis, conducted on a sample of U.S. companies, shows that GSCM companies experienced less negative abnormal stock returns during the crisis. This result contributes to the literature on financial impact of GSCM, finding that GSCM is perceived as an effective risk management tool and can serve as an effective drug against COVID-19 crisis. Our paper also contributes to the business debate on the role of green supply chains in the post-COVID19 world.     

Fluidity,Identity, and Organizationality: The Communicative Constitution of Anonymous

This paper examines how fluid social collectives, where membership is latent, contested, or unclear, achieve ‘organizationality’, that is, how they achieve organizational identity and actorhood. Drawing on the “communicative constitution of organizations” perspective, we argue that the organizationality of a social collective is accomplished through ‘identity claims’ – i.e., speech acts that concern what the social collective is or does – and negotiations on whether or not these claims have been made on the collective's behalf. We empirically examine the case of the hacker collective Anonymous and analyse relevant identity claims to investigate two critical episodes in which the organizationality of Anonymous was contested. Our study contributes to organization studies by showing that fluid social collectives are able to temporarily reinstate organizational actorhood through the performance of carefully prepared and staged identity claims.     

Purchasing and supply management as a multidisciplinary research field: Unity in diversity?

Since the 1960s, research on Purchasing and Supply Management (PSM) has grown substantially, but in recent times various scholars have challenged the actual progress and coherence of the field. In delivering such critiques, the underlying, dominant view of PSM research is that it constitutes an academic discipline. In contrast, we offer an alternative perspective that views PSM as a multi-disciplinary field of research, drawing from Operations Management, Marketing and Strategy & Organization as reference disciplines. Adopting this perspective, we conduct a review of 2522 purchasing and supply management publications in a multi-disciplinary set of 18 high-impact management journals, published in the period 1995–2014. We analyse how PSM research has developed over time; quantitatively and content-wise, in terms of the topics and theories being addressed. We find that across the three reference disciplines and the specialist PSM journals, there is diversity, with distinct features of each journal group in terms of the one or two most popular topics or theories. Still, considering the full base of PSM publications in each journal group, there is considerable overlap. Supplier Relationship Management is a popular topic throughout, and the top-5 of topics for each of the journal groups demonstrates a high degree of overlap, in any given lustrum period. With one exception, TCE is the most popular for all journal groups for all periods and of the 17 different theories identified, only four have been applied by just one journal group. Thus, we conclude that PSM research is characterised by ‘unity in diversity’: “E Pluribus Unum”, and offer recommendations how this multi-disciplinary composition of the field can be leveraged in future research.