Implementing a centralised procurement strategy for global supplier base management

Abstract

This research investigates how a global engineering firm can implement a centrally managed, globally integrated supplier base. Based on in-depth evidence from a single longitudinal case study, we identify different approaches for the case company to integrate their local supplier base into a multi-step process: first, the company attempted supplier base reduction by ‘cutting the tail’ off a vast supplier base. Second, they prioritised suppliers based on groupings and importance across the global supply network. Third, the case company tested supplier relationship management with a small selection of suppliers, resulting in improving their own delivery performance. Based on these insights, we propose a conceptual framework of global supplier base management. We discuss this framework in relation to the supply management and global operations literature. This paper contributes to the operations and supply chain management literature by offering an initial understanding for global sourcing strategies through integrating a previously localised supplier base into a globally consistent approach to managing the supplier base.