Supply management's involvement in the target costing process

This article investigates the role of purchasing/supply management in the target costing process. It is based on case studies of eleven firms that use target costing. In addition to exploring the role of purchasing, purchasing's interface with suppliers was investigated.Research results indicate that supply management plays a substantial role throughout the target costing process. Its contribution is particularly critical at the initial stages, when developing component level target costs, and when activities/modifications are occurring to achieve target costs. Supply management also plays a lead role in managing, monitoring and improving costs.Importantly, there is no single function that is more important than others in target costing. A cross-functional team approach, including suppliers, is critical to the long-term success of target costing efforts.     

供应商数量对公司经营绩效的影响

如何对供应库进行优化日益成为企业的重大战略问题之一,而最常见的供应库优化的实践则集中于供应商数量。本文从交易成本、供应商响应度、供应风险和供应商创新等四个方面分析了供应商数量对公司经营绩效的影响,认为供应商数量与原材料存货管理的效率和公司总体经营绩效之间均成倒U形关系。当公司对大量供应商逐渐进行缩减时,交易成本和供应风险降低,同时,供应商的响应度和创新提高,由此导致其经营绩效的改善;但是,当供应商数量缩减到某一个点后,供应商数量的继续缩减则导致供应风险的增大和供应商创新的下降,从而导致其整体经营绩效的下降。     

Do Firms Spend More on Suppliers That Have Environmental Expertise? An Empirical Study of U.S. Manufacturers’ Procurement Spend

Stakeholders expect focal firms to improve their environmental performance. While firms may be able to accumulate the environmental expertise needed to achieve this goal internally, doing so may require significant time and resource commitments. Alternatively, buyer firms can leverage their suppliers’ existing environmental expertise and gain access to such expertise when they purchase products and services from these suppliers. The purpose of this study was to develop and test theory regarding under what conditions suppliers’ environmental expertise influences a buying firms’ procurement spend with these suppliers. We ground our study in transaction cost economics and agency theories and empirically test our hypotheses using a unique buyer–supplier dyadic data set. We find that buyer firms are willing to increase their overall business spend with suppliers that have strong environmental expertise, particularly when the buyer firms are more profitable and have higher levels of absorptive capacity. However, we find the opposite effect when the buyer firm’s executive compensation is linked to the firm’s environmental, social, and governance (ESG) performance. Likewise, we also find that the buyer firm’s environmental concern ratings negatively moderate the relationship between the supplier’s environmental expertise and the buyer’s procurement spend with the supplier.     

Cooperation versus competition: do buyers and suppliers really see eye-to-eye?

Purchasers have used a variety of tools to help improve the performance of their suppliers’ processes and products. Results of two large-scale surveys that compare buyer and supplier perceptions of a common customer firm's supplier development and its supply base's adoption of total quality management are reported here. One customer, known for its cooperative (partnership-like) approach to supplier relations, is contrasted with another firm that uses supplier switching to meet its procurement needs. Analysis of the survey data indicates that buyers and suppliers have a better “shared understanding” (smaller satisfaction gap) within the “competitive” relationship than within the “cooperative” relationship.     

“Do frogs jump as a result of privatisation?” Impact of privatisation on buyer–supplier relationships

As the cornerstone of the Conservative Government between 1979 and 1996, privatisation has undoubtedly had an enormous impact on the UK economy. On the whole, privatised companies have improved their performance in an ever increasing competitive environment by focusing on, among other things, a drive to reduce costs through bought-out goods and services. Research into Japanese companies, meanwhile, has highlighted the key role that supplier relationships play in their success. It has stressed the advantages of co-operative over adversarial relationships with suppliers, and evidence shows that an increasing number of Western companies are adopting this practice. This has raised the profile of purchasing in these companies with a change towards `better practice’ and improved management of the supplier base. From this new research a model of Feature and Construct Evaluation and Aggregation (FCEA) has been developed, in the search for a link to support the proposition that privatisation has an influence on purchasing strategies concerning supplier relationships. The research has shown that only a very limited link exists. Whilst Purchasing as an activity has increased in its importance and control, it has not become strategic. Purchasing strategies have not evolved or supported the business strategy as a result of privatisation, nor does privatisation encourage the development of purchasing strategies towards closer relationships with suppliers. This is compounded by the EC Directives that reflect an `open tender’ model of procurement, particularly evident in the emphasis on formal competitive tendering procedures and maintaining an `arms-length’ relationship with suppliers.     

Knowledge based resources, property based resources and supplier bargaining power in Hollywood motion picture projects

Supplier bargaining power is a factor that must be considered in resource based theories of dynamic capability. As competitors develop capabilities for dynamically changing resource configurations, they become more reliant on suppliers and allies. Because different types of supplier will have more or less bargaining power, some resource configurations will be more attractive to buyers. Hypotheses are developed and tested using data on star power, intellectual property, knowledge based resource quality, costs and revenues for 278 motion pictures released in the United States in 2000 and 2001. Suppliers appear to fully appropriate returns to knowledge and property based services, while buyers benefit from control of intellectual property and from the combination of intellectual property and talent behind the camera.     

LINKING EXCHANGE GOVERNANCE WITH SUPPLIER COOPERATION AND COMMITMENT: A CASE OF CONTAINER TERMINAL OPERATIONS

Studying the suppliers of a global buyer, we find that relationship stability is positively associated with the use of explicit and implicit contracts in their buyer‐supplier relationship (BSR). We also find positive association of implicit contract with supplier cooperation and commitment as well as the influence of business volume in the BSR. Grounded in transaction cost economics and social exchange theory, these findings highlight the need to develop mutual understanding, beyond designing specific contracts, for developing cooperative and committed suppliers in a BSR.     

The Impact of Key Retail Accounts on Supplier Performance: A Collaborative Perspective of Resource Dependency Theory

Existing literature suggests that the increasing concentration in the retail industry is allowing powerful retailers to exploit their weaker suppliers, which causes the suppliers’ performance to suffer. This study takes a collaborative perspective of resource dependency theory and suggests that when suppliers engage in supply chain relationships with key retail account (KRA) customers, their performance may improve, depending on the varying levels of the supplier's and KRAs’ market shares. The empirical analysis of data from two large retailers, Wal-Mart and Target, and a broad cross-section of their suppliers provides ample support for most of the hypotheses set forth in this paper: Suppliers that depend on KRAs for a significant share of their total revenues relinquish some of their leverage in the marketplace, but as the KRAs gain market share, their suppliers’ performance tends to increase. Cumulatively, these results provide evidence of collaborative supplier–KRA relationships, such that a supplier's dependency on KRAs may positively affect supplier performance. This finding supports a more positive, symbiotic view of dependency, resulting in important implications for key account management, supply chain management, and retail research and practice.     

Supplier diversity and supply chain management: A strategic approach

Although purchasing trends are moving toward consolidation, a strong economic argument can be made for supplier diversity. In fact, most Fortune 500 companies currently employ supplier diversity initiatives. If integrated into the overall corporate strategy, supplier diversity can become a source of competitive advantage for corporations. In order for such integration to successfully occur, however, the initiative must have top management commitment, a supportive culture, and the availability of champions to promote the proposal. Minority suppliers, in turn, need to realize that their failure or success in this highly competitive environment depends on their ability to continually develop overall competences, to be learning organizations, and to become increasingly attuned to and adept at building strategic alliances amongst themselves and with their corporate customers. In these respects, they can make use of intermediary organizations (such as local supplier councils) to improve their competences and competitive edge.     

Supply base rationalisation: myth or reality?

Companies throughout the UK have been claiming for some time that in order to become more competitive and flexible, and to reduce costs, they must reduce the size of their supplier bases. In recent years, extensive supply base reduction strategies have been witnessed in a wide range of firms in differing sectors. This article seeks to explore whether these strategies are truly being followed, how they have been implemented, and how successful they have been. The author finds that whilst companies have significantly reduced the number of their suppliers, such strategies have not led to the rewards that were first envisaged. It appears that this is mainly due to a haphazard approach to rationalisation, a focus on transaction cost information, and poor management of highly dependent relationships. In addition, there is now evidence that some firms are actually increasing the size of their supply bases once more, to mitigate these problems. The research found that whilst companies claimed that they had reduced their supply bases, the reality was that they still had the same numbers of suppliers — they had delegated control to `first-tier’ suppliers as opposed to reducing the supply base. This article concludes that supply base delegation may be a useful strategy; it allows firms to focus on fewer suppliers, build high-dependency relationships, share technological advantages and spend time and effort on improving fewer relationships, thus leading to more efficient resource utilisation and consequent cost reduction. However, this process needs to be conducted within a strategic framework.     

Implementing reverse e-auctions: A learning process

Reverse e-auctions, which enable suppliers to compete on-line in real-time, are changing the way organizations select their suppliers. We explore how five large firms in different industries learned to use e-auctions, and how e-auctions were integrated into their purchasing processes. To successfully implement e-auctions, organizations should: (1) build e-auction competencies; (2) organize for knowledge management; (3) create a holistic sourcing process; (4) focus on the total cost of ownership; and (5) experiment with e-auction designs. Key observations are drawn from the case studies, and implications for supply managers are presented.     

供应管理目标与供应商关系定位研究

供应商关系的定位是供应管理的重要内容 ,也是影响供应链绩效的重要因素。本文通过对供应管理目标与供应商关系进行分析 ,提出了供应商关系必须与供应管理目标相匹配的结论。同时阐述了供需之间的信任对供应商关系的影响。     

现代企业成本管理的途径与方法

目前,现代企业成本管理主要采用四种方法:作业量成本管理法、经营流程再造法、目标成本法、生命周期法,每种技术方法独立运用都能达到降低成本的目的,可以实现成本节约,有助于提高企业的经济效益。     

Supply chain consortia: the rise of transcendental buyer–supplier relationships

A theoretical, cross-disciplinary model for cooperative buyer–supplier relationships is proposed which integrates information obtained from prior research on organizational culture and transaction cost analysis (TCA). The authors describe key elements of TCA and review the three types of transaction governance structures commonly used to explain relationships within an organization. The authors extend this by applying structure type to buyer–supplier relationships. The researchers propose several types of interorganizational relationships and conclude with an in-depth discussion of a successful supply chain consortium used by Boeing Aircraft Company and several key suppliers.     

Green supplier development: What’s in it for you,the buyer?

Greening suppliers, or cultivating environmental responsibility throughout the supply chain, has become an important strategic issue for firms. While various approaches exist, green supplier development—that is, helping and collaborating with your suppliers to reduce their negative environmental impact—is a key method that can produce significant gains for both parties at multiple levels. Yet the benefits have not been sufficiently discussed and may therefore appear nebulous for managers. Focusing particularly on “What’s in it for you, the buyer?” this article describes benefits at the intrafirm, interfirm, and market levels. Barriers to the realization of the benefits are also discussed, providing managerial guidance on supplier prioritization for green supplier development.     

Sustainable Supply Chains: Governance Mechanisms to Greening Suppliers

One of the key challenges for firms is to manage sustainability along the supply chain. To extend sustainability to suppliers, organizations have developed different governance mechanisms. The aim of this paper is to analyze the effectiveness of two different mechanisms (i.e., supplier assessment and collaboration with suppliers) to improve one dimension of sustainability: environmental performance. Structural Equation Modeling and cluster analysis were used to analyze the relationships between supplier assessment, collaboration with suppliers, and environmental performance. The results suggest that (1) both mechanisms, supplier assessment and collaboration with suppliers, have a positive and synergistic effect on environmental performance, and (2) assessment acts as an enabler of collaboration. Finally, the paper also contributes to the literature by providing a framework of sustainability governance mechanisms.     

Justice in triad: Revisiting supplier involvement in new product development

Recognizing the importance of involving suppliers in the new product development (NPD) process, extensive studies have examined this issue at a buyer–supplier dyadic level. However, how supplier involvement leads to better NPD performance is not clearly explained. Additionally, extending the dyadic relationships to triadic relationships and addressing how to manage the two competing suppliers with fair conduct remains unexplored. To answer these questions, this study developed a conceptual model theorizing the role of supplier involvement, information sharing, and justice in the NPD process within a buyer–supplier–supplier triadic relationship. Based on survey data collected from 200 U.S. firms, Structural Equation Modeling is used to test the hypothesis. The results first confirmed the criticality of involving both primary and secondary suppliers during NPD. Second, the positive effect of triadic supplier involvement on innovation performance is fully mediated by information sharing. Finally, this study explored the different roles of procedural justice and distributive justice; the results confirmed that procedural justice acts as a moderator for the relationship between triadic supplier involvement and information sharing, whereas distributive justice moderates the effect between information sharing and innovation performance. Our findings contribute to the literature of triadic supplier involvement-new product development and relationship management. Accordingly, these findings highlight key implications for managers and policymakers.     

Economic analysis of injury prevention – applying results and methodologies from cost-of-injury studies

Injuries pose an economic problem of immense proportion to communities in every society. The economic burden from injuries can be quantified through cost-of-injury studies, using techniques adopted from cost-of-illness research. This study explores the feasibility of applying results and methodologies from existing cost-of-injury studies in economic analyses of injury prevention interventions and programmes.

The literature on cost-of-injury studies and economic appraisals of injury prevention efforts was examined to elicit studies that calculated injury costs. Studies were accepted for inclusion if they included an analysis of the costs of all injuries occurring in a geographical area (community, region or country) during a specific time period, employed a societal perspective and an incidence-based costing approach and were conducted in industrialized countries. There were 12 studies that met the inclusion criteria.

The average total cost per injury case was US$3536, while the average share of indirect to total cost per injury case was 71%. However, the cost figures showed wide variation across the studies. Based on the limited similarity of findings from the studies, it was concluded that it is not feasible to apply results and methodologies from existing cost-of-injury studies. The cost estimators described in this study could possibly be adapted for use as reference points in economic analyses of existing programmes, but any other uses should be approached with caution. Locally obtained data are needed for reliable economic analyses of injury prevention interventions and programmes.     

Unintended Consequences: How Suppliers Compensate for Price Concessions and the Role of Organizational Justice in Buyer‐Supplier Relations

“You get what you pay for” is one of life's lessons that predominates in purchasing decisions individuals make in their personal lives. The results of this study suggest this lesson should also prevail among management when price‐related purchasing decisions in businesses are being made. An evaluation of over 1,700 purchasing instances across seven years of a longitudinal panel data set collected from Tier 1 production suppliers to the six major North American automotive Original Equipment Manufacturers (OEMs), Chrysler, Ford, General Motors, Honda, Nissan, and Toyota, found that suppliers compensate for price concessions and price reduction pressure from the OEM in the year following the concession, by reducing product quality, service support, and R&D expenditures associated with goods provided to the OEM. This industry is particularly relevant because it is highly adversarial, yet at the same time reliant on interdependence. The results show that supplier price concessions granted to an OEM led to compensatory supplier behaviors of reduced quality and R&D expenditures toward that OEM. Further, the results suggest that the organizational justice dimensions of distributive justice, procedural justice, interpersonal justice, and informational justice can ameliorate negative supplier compensatory activities. A buyer–supplier relational environment that engenders organizational justice tactics such as open and honest communication with suppliers provides suppliers the expectation of an acceptable return on business over the long term, provides help to suppliers to reduce costs, and builds supplier trust of the OEM had generally positive effects on quality, service, and R&D expenditures. From a management perspective, these results indicate there is a very real risk versus reward issue associated with pressuring suppliers for price reductions.     

The dyadic capabilities concept: examining the processes of key supplier involvement in collaborative product development

The increased use of suppliers in the new product development process has important implications for the strategic performance of organisations. In this paper an analysis of supplier collaboration in the development process is deployed to support the development of a dyadic (or two-level) capabilities analysis of the strategic management of the innovation process. By setting an organisation's competencies within the context of their customer or supplier interactions this paper supports the view posited by Ford et al. (1986) that interaction defines the value of assets and resources. In a study of collaboration in the UK auto industry, it was found that both operational and relational competences are critical factors in the performance of the new product development process. Thus, the ability of customers and suppliers to develop both structured and ad hoc processes of interaction is shown to be important to the development process from early supplier selection process.