Sub-Supplier Management - Towards a Process Framework

Abstract

The multi-tier nature of supply chains (Mena et al., 2013), extending the boundaries beyond the direct supplier level upstream to sub-suppliers (Carter et al., 2015), receives increasing attention in the literatur. While the conversations address particularly supply chain transparency and the identification of risk or malpractices, much less attention is given on the range of activities companies perform to manage sub-suppliers - and what management of sub-suppliers actually means. Sub-suppliers characterize by their organizational distance to the buying organization: buyers lack a contract with sub-suppliers as they are contracted only by suppliers (or other sub-suppliers) which act as middleman (Grimm et al., 2016). In such settings, selecting or knowing sub-suppliers, monitoring their performance and influencing them requires processes that are different to those applied when dealing with direct suppliers. Business experience in managing sub-suppliers is largely limited to resolving immediate problems, in particular actual crises, or sectoral / collective approaches. Academic literature on managing sub-suppliers is scarce and scattered. This paper is based on fourteen case studies and six workshops with industry experts. It proposes a sub-supplier management framework, and suggests a set of business processes for sub-supplier management. This process framework may serve as a basis for future research in managing sub-suppliers.