An empirical examination of strategic sourcing dominant logic: Strategic sourcing centricity

Recently, much of the thought in strategic sourcing, i.e., dominant logic, has shifted away from the exchange of tangible goods and toward the exchange of intangibles, specialized skills and knowledge, and processes. This study refers to strategic sourcing dominant logic as strategic sourcing centricity (SSC) and describes it as a sourcing management′s mindset based on learning, performance, planning, and relational orientations and manifests itself in the implementation of SS to meet supply management objectives and satisfy stakeholder requirements. Building on insights on intangibility derived from resource-based theory (RBV), the study proposes and empirically tests strategic sourcing centricity (SSC). The authors test the operational measures of SSC dimensions and its impact on performance on a sample of 174 supply management executives. The results indicate strong support for the theorized framework. Managerial implications and future research agenda are provided.     

Notes and debate paper: Should merchandising and sourcing be worlds apart? The opportunity for more integrated strategic sourcing research

Whereas retailers are some of the biggest buyers that have some of the highest percentages of external spend as a share of revenue, they are not typically included in strategic sourcing research. Strategic sourcing research originated with a focus on supplies for manufacturing. But the strategic sourcing of merchandise by retailers is not as commonly studied. Merchandise sourcing is often approached very differently from manufacturing sourcing and often different teams of buyers with different roles and responsibilities are involved. Leveraging author industry experience and interviews with strategic sourcing executives in manufacturing and merchandise sourcing this notes and debate paper compares strategic sourcing across these domains and identifies fruitful research opportunities for developing a more comprehensive supply chain approach to strategic sourcing research.     

Target-oriented use of strategic sourcing tools: A critical analysis creating process awareness for electronic reverse auctions

The success of an electronic reverse auction (eRA) does not manifest just in price reductions but also in the reduction of transaction costs and costs of the purchasing organization. A dynamic process view allows a better understanding of these dimensions. We illustrate that using the Total Cost of Ownership (TCO) concept. The goal of our study is to determine the impacts of eRAs on Total Cost of the Purchasing Function (TCPF). Therefore we analyze the impacts on three different levels: the process step, the transaction, and the tool integration level, enabling process awareness of firms using eRAs.     

An optimization approach to strategic sourcing: A case study of the United States Air Force

The DoD annually procures billions of dollars worth of systems, supplies, and services in support of the national military strategy. Faced with budget cuts and other resource constraints, the DoD must transform its procurement process to ensure cost-effective sourcing of critical supplies and services. One aspect of current transformation in the DoD is the use of a strategic sourcing approach for the procurement of services at military installations. Using the Air Force's strategic sourcing process as our context, we developed an optimization model for selecting a set of proposals from among multiple offerors for services to be performed at multiple installations. The selection achieves the most favorable objective by balancing the confidence level in an offeror's past performance with the cost of services to the Air Force. The research findings, which are based on a realistic scenario, demonstrate improvements over the current sourcing process in both overall performance and cost.     

Strategic sourcing and corporate social responsibility: Aligning a healthcare organization's strategic objectives

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.     

Analyzing the sourcing literature: Over two decades of research

Sourcing is an essential component of purchasing and supply chain management and has been extensively studied by academic researchers. A comprehensive scholarly literature review of sourcing was undertaken to provide guidance for future scholars through an in-depth review of past research. A total of twenty journals were selected, and 520 articles addressing sourcing topics were identified from 1995 to the present. The review process identified seven major sourcing categories within the literature. These included: strategic and relational, transactional/tactical, sourcing tools, global, sustainability, services, and new product development. Each of the seven sourcing categories is separately discussed by focusing on main themes, theories and methods. Findings indicated that strategic and transactional categories received the most attention from researchers. The area of sustainable sourcing has increased the most dramatically, while sourcing tools proved the most stable over the four time periods studied. Over 120 different theories were used to explain sourcing actions, with transaction cost economics being the most prominent. Surveys and quantitative modeling were the two most widely utilized research methods. Finally, conclusions to our findings are presented.     

The mediating role of speed in the global sourcing decision process

The principal aim of this study is to provide theory and testing to elucidate the role of decision-maker's decision process and speed during the global sourcing decision-making process (GSDP). In order to achieve this goal, we examine the behavior of a sample of 202 decision-makers belonging to Italian SMEs in the manufacturing sector. Our main finding suggests that faster decisions during the GSDP process lead to superior financial and non-financial performance of the selected supplier. Moreover, we find support for dual processing theory wherein rationality and intuition of the GSDP are associated with increased supplier performance both directly and through their effects on decision speed. Results are discussed in terms of the GSDP, SME and strategic decision-making literatures and practical implications for managers in SMEs.     

Information systems and technology sourcing strategies of e-Retailers for value chain enablement

In the e-Retail industry, a well-designed IT infrastructure is essential in creating a tightly integrated value chain and delivering high quality service. With intense competition for market share and profits, information systems and technology (IST) sourcing decisions are becoming increasingly important to e-Retail firms to support continued growth and market responsiveness. Drawing on the contingency theory, we examine organizational and environmental factors that influence an e-Retailer's IST sourcing strategy of make versus buy in enabling its value chain activities, and we also look at firm-level performance impacts of IST sourcing decisions that involve bundling across value chain activities. We test the proposed model and hypotheses using a panel data set of 307 firms over the period of 2006–2010. The results show that firms that make transformative IT investments tend to source a smaller portion of IST for their e-Retail value chain activities than firms that pursue automate or informate as their strategic role for IT investment. Capabilities are positively associated with IST sourcing. Firms experienced in e-Retail are more likely to build rather than buy their IST. In addition, we find mimicking behavior for IST sourcing among firms in the same merchandizer category. We find that IT strategic role is strongly associated with growth metric, whereas sourcing decisions predominantly impact operational performance measures. There is partial evidence that alignment between IT strategic role and IST sourcing decisions results in better performance effects. Moreover, complementary IST sourcing of synergistic marketing and sales activities positively impacts Web sales and conversion rate, but the sourcing combination of logistics, operations, and sales activities is associated with lower Web sales and conversion rate.     

Effects of strategic human resource management on strategic vision

It is pertinent for organizations that operate in a highly competitive environment to pursue a strategic vision. This study explores the effects of strategic human resource management (SHRM) on the implementation of a strategic vision. Other constructs of importance in the model include leadership, commitment and organizational structure. A total of 400 questionnaires were sent by mail to organizations of various industries and the total number of respondents was 104. Leadership was found to be significant in eight out of ten of the hypotheses, thereby indicating that the leadership of an organization plays an extremely important role in the achievement of a vision. Also, SHRM functions such that HR planning, recruitment and selection, rewards and compensation as well as training and development have significant effects in the achievement of different visions. For the vision of regional growth, leadership and organizational structure was found to be significant. Where market growth is pursued, leadership, reward system, commitment, training and staffing are significant. In the case of a strategic vision of mergers and ventures, only leadership was found to be significant. The only significant factor in the vision of low cost and productivity is planning. For a vision of customer focus and innovation, leadership and selection are the significant factors. Where innovation and product development are pursued, only planning is significant. For organizations that pursue cluster visions, the factors that are significant include leadership, commitment and selection.     

Internal and external suppliers in manufacturing networks—An empirical analysis

The purpose of the paper is to explore the way manufacturing firms use internal and external suppliers in the design and management of manufacturing networks. The main area of interest is to explore the similarities and differences between internal and external suppliers, with respect to their roles and the reasons for choosing a certain type of supplier. We base our analysis on data from 104 Swedish manufacturing plants and their corresponding manufacturing networks of internal and external suppliers. The results of the study show that there are significant differences between the criteria that are influential in choosing a certain type of supplier. The choice of an internal supplier is largely based on a single corporate decision, while an external supplier has to perform well on a number of criteria (primarily quality, cost, and delivery dependability). When comparing the selection criteria with competitive priorities and plant performance, we find that the criteria for selecting external suppliers has a better match than those for selecting internal suppliers. The sample contained plants having only external suppliers as well as plants having both internal and external suppliers, but the selection criteria for external suppliers are the same for both groups and not dependent upon the presence or absence of internal suppliers.     

A configuration of sustainable sourcing and supply management strategies

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.     

Supply's strategic contribution: An empirical reality

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.     

Global sourcing and quality recalls: An empirical study of outsourcing-supplier concentration-product recalls linkages

This study investigates how supply chain sourcing strategies are associated with product quality recalls. In particular, the research examines how make-or-buy decisions (i.e., outsourcing), the use of foreign suppliers (i.e., offshore outsourcing), the relocation of production to offshore markets (i.e., offshoring), and decisions to consolidate supply bases (i.e., the use of few vs. myriad suppliers) are related to product recalls. Product recalls are serious quality failures in supply chains with significant, negative impacts on firm performance. Product recalls are frequently connected to the globalization of supply chains. Globalization has, at times, promoted inconsistency in quality control and standards, leading to quality problems and failures. Data across multiple industries, with widely reported recalls, have been collected and analyzed using regression techniques. Our findings indicate that offshore outsourcing has a greater impact on recalls than offshoring without outsourcing; outsourcing domestically has the least influence. Outsourcing to a smaller supplier base may lead to fewer recalls at low levels of outsourcing. However, it may exacerbate the impact of outsourcing on recalls at high levels of outsourcing.     

Introducing the paradox theory in logistics and SCM research – examples from a global sourcing context

The purpose of this paper is to introduce and explore the use of paradox theory in a logistics and SCM research context. Although logistics and SCM scholars as well as practitioners have been aware about the existence of paradoxes, they have so far lacked a more formal theoretical framework for further identification and classification of these. Framed in the four general paradox classes of learning, belonging, organising and performing, the paper outlines paradoxes inherent in the global sourcing practices of two case companies. The findings demonstrate the paradox theory to be a useful tool for a systematic illumination and classification of paradoxes valuable for practitioners, researchers as well as teachers in the domain of logistics and SCM. The paradox theory may also help to identify and emphasise inconsistencies among different research fields. This is particularly valuable for research areas built upon multiple research disciplines such as global sourcing. In conclusion, the paper suggests that the paradox theory offers a new lens through which an organisation could be better explored, described and understood.     

The integration of forecasting and strategic planning

The paper analyzes the use of information in companies planning strategically versus those which are not. This contrast is used to build the case for developing strategic forecasting capability which focuses on a variety of environments, is proactive and interactive, and creates a need for different kinds of data bases and forecasting techniques.     

Technology sourcing and outward FDI: A study of IT industry in India

Dunning’s eclectic or the OLI framework suggests that MNCs exist and grow due to possession of ownership (O) advantages consisting of the tangible and intangible assets of the firm (including technology); location (L) advantages consisting of production factors such as transportation, infrastructure, and human and natural resources available in the host country; and internalisation (I) advantages owing to firm’s competitive advantage in producing internally rather than selling or licensing technologies to others. There are several studies that have analysed MNCs of developed country origin from the perspective of both developed (home) and other developed or developing (host) countries. Recently, however, MNCs from developing countries are also making their presence felt in the world. Yet, there are hardly any studies that analyse MNCs of developing country origin.Using data on 130 firms from the high-tech Information Technology (IT) industry of India, we investigate whether ownership advantages (O), as proposed in the eclectic theory, holds true for the presence of MNCs from developing countries. Specifically, we analyse whether firm-specific technological advantages generated through differential technology sourcing at home (India) are important in determining inter-firm differences in the decision to invest abroad. The technological sources considered are in-house R&D efforts, import of designs, drawing and blueprints, and import of capital goods. The study reveals that in-house R&D efforts are indeed important for the firms to invest abroad. Size and export intensity of the firm also influence the decision of the firm to invest abroad. The study recommends a proper innovation and resource management strategy for developing country firms for efficient allocation of resources, technology sourcing, and technology assimilation.     

Price experimentation with strategic buyers

A two-period model in which a monopolist endeavors to learn about the permanent demand parameter of a specific repeat buyer is investigated. The buyer may strategically reject the seller’s first-period offer for one of two reasons. First, in order to conceal information (i.e., to pool), a high-valuation buyer may reject high prices that would never be accepted by a low-valuation buyer. Second, in order to reveal information (i.e., to signal), a low-valuation buyer may reject low prices that would always be accepted by a high-valuation buyer. Given this, the seller often finds it optimal to post prices that reveal no useful information. Indeed, in the equilibrium where there is no signaling, the seller never charges an informative first-period price. Learning may occur in the equilibrium where there is maximal signaling, but the scope for learning is quite limited even in this case. Indeed, in order to preempt information transmission through signaling, the seller may be induced to set a first-period price strictly below the buyer’s lowest possible valuation.      

Mediated power and outsourcing relationships

Mediated power is often used by firms to control the behaviors or influence the decisions of other members of the value chain. Interestingly, significant contributions in the academic literature offer consistent evidence that the use of mediated power has a negative impact on the quality of inter-organizational relationships. Yet, there is a dearth of empirical research investigating the conditions under which the use of mediated power is more or less prevalent. Utilizing dyadic data collected on 102 outsourcing relationships, this study evaluates how the buying firm's dependence on the service provider, asserted importance of the outsourced activity, and difficulties with other inter-organizational control mechanisms are related to their reliance on mediated power. Results from our hierarchical regression analysis support the hypotheses that the use of mediated power is diminished when the buyer is currently more dependent on the service provider due to switching difficulties and the buyer has a higher expectation of future supply market consolidation. Similar hypotheses regarding the effect of the strategic importance of the outsourced activity and entry barriers to the service provider's market were not supported. The results also support the hypothesis that the use of mediated power is more pronounced when the buyer experiences contract management difficulties, but the same is not true when the buyer has difficulty in monitoring the provider. To our knowledge, these findings represent the first empirical explanation of conditions which either attenuate or exacerbate the use of mediated power by outsourcing organizations.     

建造企业功能性战略信息平台

信息平台低下成信息环境的不良是造成企业长期低起点经营的重要原因之一,新世纪企业新的活力和竞争力可来源于高效的战略信息平台.建造全面性、开放性和具有互动性的战略信息平台,可使企业在全新的基础上实现信息共享,并以此来实现企业高起点的战略性经营.而用价值工程的原理和方法指导每一阶段企业信息环境的建设,是摆脱高额投入、防止过多的功能过剩、有效地建造企业战略信息平台的重要途径.     

Evaluating the success in international sourcing of information technology projects: The need for a relational client‐vendor approach

This article investigates the differences across and the need to consider both the client and vendor perspective in evaluating international sourcing (offshoring) success and highlights the need for incorporating relational factors into the success assessment rather than focusing solely on financial or operational outcomes (e.g., projects delivered on time, within budgeted costs). We take an expanded view of project success (using relational/process dimensions) and provide insight into how client and vendor firms evaluate success differently across relational dimensions and how relational factors play a key role in achieving success. Based on the findings, propositions are presented to guide future offshoring success research.