Finding true north: Design and implementation of a strategic sourcing framework

Abstract

This study investigates the evolution of the design, development and implementation of a strategic sourcing framework able to support decision-makers in formulating differentiated, rather than generic supplier base strategies. These strategies are in turn implemented through specific action plans, assuring the coherence and alignment between the different strategic hierarchical levels, beginning with business strategy, through category strategy to specific tactical sourcing levers. The proposed framework is the result of a longitudinal study executed through two action research cycles engaging in a strategic sourcing project in a leading European specialty steels manufacturer. By integrating and refining in our framework three dominant purchasing portfolio models - i.e. Kraljic, Olsen & Ellram, and Scott & Westbrook - we highlight the importance of adopting multiple perspectives to manage the complexity of formulating a purchasing strategy and its related implementation decisions. The proposed framework has been designed to facilitate dynamic learning mechanisms through a feedback loop to continuously update the three integrated models and in turn allow managers to gain a strategic perspective of the evolution of buyer-supplier relationships, the influence of previous decisions and external factors. A critical discussion explores the proposed solution through the main theoretical lenses emerged throughout the research process.