Assessing supply chain risks with the analytic hierarchy process: Providing decision support for the offshoring decision by a US manufacturing company

This paper reports the process used by a US manufacturing company to assess supply chain risks within the context of an offshore sourcing decision. The case study company was faced with the objective of finding a new supplier for two of its major product lines. Five alternatives were considered: (1) sourcing finished goods from Mexico; (2) sourcing finished goods from China; (3) sourcing parts from China and assembly in the US; (4) sourcing parts from China, assembly in a Maquiladora in Mexico with investment; and (5) sourcing parts from China, assembly in a Maquiladora in Mexico with no investment in the venture. To find the best solution, action research methodology was combined with the application of the analytic hierarchy process (AHP). Through iterative and structured discussions, 17 risk factors were identified, which were subsequently grouped into main and sub objectives. AHP was then used to evaluate the importance of each risk factor, and to determine the best alternative. This study makes several contributions to the field of purchasing and supply management. First, it provides a comprehensive framework of empirically derived risk factors to be considered in an international sourcing context. Second, it shows how AHP can be used to assess these risk factors and alternatives as part of the framework to facilitate and support the final offshoring decision. And third, it illustrates the successful application of the approach by a US manufacturing company. As such, this paper contributes to the research streams of offshoring and risk management in purchasing and supply, as well as to decision-making under uncertainty and AHP. In addition, it serves as a practical methodology for firms in similar situations.     

Organizing IT purchases: Evidence from a global study

Information technology (IT) purchasing is covering an increasing part of companies’ expenditure. Scholars mainly investigated IT purchasing in terms of make or buy drivers from an IT perspective. Similarly, companies have been focusing on make or buy decisions and specifications definition in relation to technological characteristics. This often resulted in failures related to the goods/services purchased due to e.g. lack of negotiation skills, contracting, and suppliers’ relationship management. Accordingly, IT purchasing might require new structures and processes management.The purpose of the paper is to investigate what are the possible configurations for IT purchasing, and how these configurations are characterized in terms of purchasing process (i.e., strategic purchasing, sourcing and supply) and organization (i.e., roles involved, level of centralization, and span of control). Furthermore, the paper asks how IT relevance and purchasing maturity might affect these configurations. Through 12 case studies of leading international companies, four main configurations of the organization and the purchasing process for IT purchasing were identified, namely neutral (no specific approach is in place), IT oriented (the IT department takes the lead over the purchasing department), purchasing oriented (the purchasing department manages the whole IT sourcing process) and IT strategic (IT and purchasing departments jointly manage the IT purchasing process). The choice of the configuration is driven by IT strategic importance (low for neutral and purchasing oriented) and purchasing maturity of the company (low for neutral and IT oriented).     

大数据时代基于价值链分析的企业流程再造案例研究

选取美国Netflix公司大数据制作的电视剧《纸牌屋》进行案例研究,探讨在大数据时代,大型企业如何综合运用大数据技术与价值链分析技术,进行流程再造,以实现企业的战略目标。研究发现,基于大数据与企业价值链分析的流程再造是企业未来发展的重要趋势,并将长远影响企业战略目标。进而提出了大数据、价值链与企业流程再造的作用关系模型。     

战略导向与企业社会责任影响关系的实证研究 ——以在华韩资企业为例

以在华韩资企业为对象。探讨战略导向和企业社会责任的相关关系,以及企业社会责任对企业绩效的直接作用,并且在战略导向与企业绩效之间的关系上,对企业社会责任的中介效应进行了实证分析。研究进行了问卷调查,获得了302份有效问卷,并进行了回归分析。研究结果表明:市场导向和网络导向对企业社会责任产生直接影响,企业社会责任对企业绩效产生直接影响,并且在市场导向与企业绩效之间的关系上,企业社会责任具有中介效应。     

Managing the global supply base through purchasing portfolio management

‘How to source globally’ has become a critical strategic decision for companies competing on a global basis. Despite an increased focus on global sourcing and supply chain management, little is known about the challenges and solutions surrounding such sourcing practices. Extant literature points at the critical importance of developing and sharing knowledge in multinational companies (MNCs). However, little work has been undertaken to examine the organizational mechanisms used by MNC headquarters for knowledge leveraging across subsidiaries, especially in the area of purchasing and supply management. Based on an in-depth case study, focusing on a chemical company, the actual buying systems for managing the global supply base are explored. Kraljic's purchasing portfolio approach appears useful, both for developing effective purchasing strategies as well as for managing a global supply base.     

Exploring early purchasing involvement in discontinuous innovation: A dynamic capability perspective

This paper aims to address the gap concerning our knowledge about early purchasing's involvement (EPI) in new product development (NPD) projects in contexts characterized by discontinuous innovation. We adopt a dynamic capability perspective to explore how existing sourcing and supplier relationship management capabilities are adapted when purchasing agents become involved in discontinuous innovations projects. We use an embedded case-study approach to study four NPD projects in a heating, ventilation, and air conditioning (HVAC) company. The case studies are based on interviews with managers and staff from the research and development, purchasing, and marketing departments, as well as suppliers involved in the projects. Our empirical findings capture emerging purchasing practices including a “reversed” sourcing process, purchasing-marketing interaction, and the coordination of “a learning atmosphere” between the R&D department and suppliers through proactive innovation meetings and creativity workshops. We derive propositions to conduct further research into the role of the purchasing department in times of discontinuous innovation. We also provide a framework of sourcing and supplier-relationship practices that firms can use when embarking on discontinuous innovation.     

Low cost country sourcing and its effects on the total cost of ownership structure for a medical devices manufacturer

In this paper, we describe a total cost of ownership (TCO) method as an activity-based costing (ABC) application along the value chain to measure and analyse the costs of international sourcing activities. We further describe the method's implementation for a manufacturer of high-tech medical devices. For this case study, we analyse the effects of shifting purchasing volume from traditional procurement market suppliers to low cost country suppliers on the cost structure of purchasing projects. We find that particularly costs at component and supplier level gain importance over traditionally dominating unit level costs. Furthermore, we identify low cost country sourcing as a decision with extensive impact on value chain entities other than purchasing. Finally, a considerable part of costs in low cost country sourcing accrue at the beginning of a purchasing project due to problems stemming from unsatisfactory initial quality, language barriers and intercultural communication.     

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.     

Cause‐related events: fulfilling the objectives of social partnerships

• Cause‐related events are growing in frequency and popularity. These events enable corporates and not‐for‐profit organisations to collaborate for mutual benefit, within the strategic framework of a social partnership. However, while anecdotal evidence indicates that millions of dollars are invested in events, less is known about how the strategic objectives of social partnerships are achieved via cause‐related events. We present the findings of an ethnographic study of two social partnerships and contribute insights into how and why events help them achieve their strategic objectives. Case analysis data reveals that the fit between events and partnerships; the people, teams, and relationships; and collaboration of resources all contribute to generating competitive advantage and value. We discuss the managerial implications for those collaborating to organise a cause‐related event.

Copyright © 2016 John Wiley & Sons, Ltd.     

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.     

Setting the stage for successful electronic reverse auctions

Based on case survey data, this article provides a framework to help organizations evaluate if electronic reverse auctions (ERAs) are likely to be successful in terms of product cost reductions. The results of logistic regression and correlation analysis underline that it is vital that the product or service to be auctioned can be properly specified and that the companies must spend sufficient time and effort to carefully analyze, understand and, if possible, increase competition among suppliers participating in an ERA. Further recommendations how to instill competition are provided. Organizations should be aware of these conditions and focus purchasing measures prior to an auction accordingly.     

Taking Friedman Seriously: Maximizing Profits and Social Performance*

abstract This paper examines the situation of firms that have two objectives: profit maximization and social performance. By looking comparatively at the cases of altruism, coerced egoism, and strategy, this paper uses the tools of microeconomics to define the optimal level of social output that should be produced in each case. We show that it is wiser for the firm to act strategically than to be coerced into making investments in corporate social responsibility. In addition, we argue that greater overall social output will be achieved by the strategic approach, than by the altruistic approach.     

Levels of strategic purchasing: Impact on supply integration and performance

The growing importance of supply chain management has led to an increasing recognition of the strategic role of purchasing, which has recently evolved and expanded from “buying” to “procurement” and “supply management”. In this study, we chart our sample firms’ advance in strategic purchasing, characterized by the strategic focus, strategic involvement of the purchasing function and the status and visibility of the purchasing professionals, into three stages.This study provides strong empirical support for the importance of strategic purchasing by showing that, by moving towards the more advanced stages, firms at the nascent stage of strategic purchasing can achieve better supply integration, a second-order construct composed of four facets of relational, process, information, and cross-organizational team integration. Our analyses further reveal that strategic purchasing can have a profound impact on supply chain performance for both buyer and supplier firms.     

企业社会责任战略模式演进的案例研究——以中远集团为例

本研究构建了企业社会责任战略模式的演进模型,将演进过程划分为起步、参与、整合和可持续发展四个阶段,并从战略意图、目标承诺、责任主题确认、利益相关者关系、管理措施、透明度和绩效评价七个维度对企业社会责任战略模式的演进阶段进行界定。以中远集团为例,对其2006—2011年度企业社会责任战略模式的演进过程进行了分析和判定。研究认为,企业社会责任战略规划的制定要在企业社会责任工作推进之初提上日程,并配以相应的资源,推动企业社会责任工作系统、规范、持续地前进。本研究所探讨的企业社会责任战略模式演进问题,对促进企业社会责任与战略管理领域的融合具有重要意义。     

Implementing sustainable sourcing—Does purchasing need to change?

The implementation of corporate sustainability relies strongly on the purchasing function implementing sustainable sourcing. To advance understanding of this implementation, this paper offers a threefold contribution. First, it operationalises sustainable sourcing and addresses different possibilities of ways it can be implemented according to the company-specific emphasis on each of the three sustainability dimensions; i.e., economic, environmental, and social aspects. Second, this paper identifies, based upon stakeholder theory, internal and external stakeholders and their specific salience to drive the implementation of sustainable sourcing. Furthermore, the content of those salient stakeholders' claims is analysed concerning its impact on individual, company-specific sustainable sourcing profiles. Third, this paper explores how the purchasing function may need to change its internal and external relationships due to and in the course of implementing sustainable sourcing. Covering these three aspects, this conceptual paper concludes with a framework of testable propositions and offers several avenues for further research.     

How to achieve cost savings and strategic performance in purchasing simultaneously: A knowledge-based view

The competitive advantage purchasing provides has been debated for decades. For a novel perspective we derive a theoretical framework grounded in the knowledge-based view in order to examine how purchasing knowledge and purchasing integration impact cost and strategic performance. The derived hypotheses are tested based on extensive secondary data from a large European multinational utility company. The 179 studied ‘purchasing-internal client relationships’ contain real contracted savings data and internal client ratings of purchasing knowledge, purchasing integration and strategic purchasing performance. We show that purchasing knowledge is a major antecedent for both savings and strategic purchasing performance. This effect is further amplified by purchasing integration. With this study, we extend the understanding of the purchasing knowledge–performance link. We conclude that purchasing knowledge becomes particularly valuable when combined with other functions' processes through purchasing integration. This causal chain is also supported through general knowledge-based view theory. Moreover, we provide numerical evidence of the value of knowledge creation and integration processes to purchasing professionals in our managerial implications based on results obtained from actual purchasing savings data.     

Achieving purchasing competence through purchasing performance measurement system design—A multiple-case study analysis

Purchasing competence, the level of strategic integration and alignment, is a key determinant of the purchasing function's impact on overall corporate success. Previous research has revealed that the implementation of a mature purchasing performance measurement system (PPMS) can be a means to attain a high level of functional strategic integration. In this research, we develop five propositions on how PPMS should be designed to facilitate strategic integration. We challenge these propositions using data gathered from four case studies with German companies from different industrial sectors. While each of these companies pursues multiple strategic objectives within Purchasing, the PPMSs designs focus heavily on cost-related strategy and performance dimensions. Thus, our findings indicate the need to develop PPMS schemes allowing a direct linkage between financial performance and non-financial performance measures in order to incentivize the desired multiple strategic goals beyond periodical cost reduction. Moreover, such measurement systems need to be adapted at the category level of purchasing practices to obtain the desired level of pre-defined strategic performance dimensions. Hence, the level of purchasing competence is determined at category level and a PPMS must transform strategy into measurable goals at this level.     

Getting the best solution from a supplier – A social capital perspective

Due to the current shift towards solution provision in many industrial markets, buyers are under increasing pressure to develop sourcing strategies to procure custom solutions for their firm in order to achieve competitive advantage. The question arises as to how buyers can ensure they get the best solutions from their suppliers and whether social capital can be applied to improve solution provision processes and value creation. Existing empirical research, however, has paid only little attention to the antecedents of suppliers’ solution provision performance, i.e., their capability to diagnose buyer needs and to design and implement solutions to meet them. We tested how social capital dimensions (relational, cognitive, and structural) relate to solution provision. The study uses empirical data obtained from a survey of 475 suppliers representing both manufacturing and service industries. Partial least squares (PLS) structural equation modeling (SEM) and polynomial regression were used to analyze the data. The results demonstrate that the availability of social capital in a buyer-supplier relationship is a relevant antecedent to successful solution provision activities. However, the different dimensions of social capital are found to compensate for each other to some extent. Our study further demonstrates that solution provision is not a monolithic activity but can better be understood as a multi-phase process (diagnosis, solution design, and implementation). Different aspects of social capital may have a different impact depending on the phase of solution provision. The successful diagnosis of buyer needs mediates the effect of social capital on solution design and implementation. It is also found that production characteristics of a buyer and the type of a supplier solution affect the role of social capital in solution provision process.     

Limits to global sourcing?: Strategic consequences of dependency on international suppliers: Cluster theory,resource-based view and case studies

This paper argues for the inclusion of an analysis of industry clusters when making decisions about global or local sourcing. Suppliers are viewed as valuable resources that can contribute to a firm's competitive advantage. Two contrasting case studies illustrate that, contrary to common expectations, a high global sourcing quota does not necessarily improve a firm's competitiveness. Rather, there may be limits to global sourcing, if a firm is unable to become a preferred customer of its strategic suppliers. Achieving preferred customer status is easier for firms located in the same regional or national cluster than it is for foreign firms attempting to access a remote supplier. This paper contributes a new and more differentiated approach to global sourcing decisions by integrating the cluster concept. Furthermore, our findings enrich the discourse of strategic management by supporting the view that resources which enable a firm to achieve sustainable competitive advantages can be located beyond its legal boundaries.     

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.