Strategic Sourcing Research Articles

Strategic Sourcing and Vendor Management in the Food Industry: Leveraging AI, Blockchain and Transparency for a Sustainable, CarbonNeutral Future

Strategic Sourcing and Vendor Management in the Food Industry: Leveraging AI, Blockchain and Transparency for a Sustainable, CarbonNeutral Future

Strategic Procurement Practices and Performance of Export Processing Zone Firms in Machakos County, Kenya.

Export Processing Zones (EPZs) were established in Kenya to boost industrialization, attract foreign investment, and drive economic growth. However, despite significant government efforts, the performance of EPZ firms has been below expectations. This study investigates whether strategic procurement practices could improve the performance of EPZ firms in Machakos County, Kenya. Strategic procurement, which aligns procurement with organizational goals and emphasizes long-term value creation, was the focus. The study specifically explored the impact of strategic sourcing, strategic partnerships, strategic inventory management, and strategic contract management on the performance of EPZ firms in Machakos County. Using a descriptive research design, all 99 EPZ firms in Machakos County were surveyed through a census approach. Data was collected via structured questionnaires, with a pilot study conducted to ensure content validity and clarity. Both qualitative and quantitative data were analyzed, with results presented in tables and charts. The findings showed that the four strategic procurement practices adopted improved the performance of export processing zone (EPZ) firms in Machakos County. Strategic sourcing for instance significantly improved the operational efficiency and cost-effectiveness of EPZ firms. Firms that developed strategic partnerships with suppliers experienced enhanced product quality and supply chain reliability. Effective inventory management practices led to reduced waste and better resource allocation, positively impacting overall performance. Proper contract management was associated with improved compliance and reduced legal disputes, contributing to better performance metrics. The study concluded that adopting strategic procurement practices substantially enhances the performance of EPZ firms in Machakos County. By aligning procurement strategies with organizational goals and focusing on long-term value, firms can achieve greater efficiency, reliability, and cost savings. Policymakers should promote the adoption of strategic procurement practices within EPZs to boost economic performance.

A conceptualization and empirical investigation of strategic sourcing approaches for engineer-to-order manufacturers

Since supplier capabilities often are essential for the success of a new product, previous studies suggest manufacturers to integrate strategic sourcing into the early stages of their new product development (NPD) processes. However, the literature on this topic offers only limited guidance for manufacturers in the engineer-to-order (ETO) context, where late strategic sourcing can be inevitable due to, for example, uncertainty or changing customer requirements. To address this gap in the literature, this article first draws on the literature to conceptualize five distinct strategic sourcing approaches that ETO manufacturers can employ. The approaches differ in terms of the timing of three strategic sourcing activities during the NPD process: make-or-buy analysis, supplier selection and supplier collaboration. To investigate the approaches, we conducted an embedded single case study involving a large turbine manufacturer. The study supports the existence of all the strategic sourcing approaches and identifies distinct conditions associated with each of them. Thereby, this article extends the literature with additional clarity about strategic sourcing in the ETO context, as well as when different approaches occur.

BRalu Profile: the procurement strategy

Learning outcomes After completion of the case study, students will be able to understand BRalu Profile’s product range, customer base and historical developments; analyze how BRalu Profile’s procurement strategy evolved and its impact on business profitability; calculate and compare procurement costs and evaluate their role in decision-making for different suppliers; examine how market conditions (includes domestic and international dynamics) and pricing strategies influence procurement choices; assess the pros and cons of different procurement options and make informed recommendations based on supply chain principles; and identify potential procurement risks (e.g. currency exchange rates and supplier reliability) and propose strategies to mitigate them. Case overview/synopsis This case study explored the challenges faced by BRalu Profile, a prominent aluminum profile products company based in Ahmedabad, India. It focused on the critical task of supplier evaluation, selection and the complexities of maintaining relationships with existing suppliers. This case study delved into the intricate dynamics of procurement decisions within the supply chain and their direct impact on the firm’s overall performance. It also emphasized the supply chain’s susceptibility to disruptions and their consequences on company operations and supplier selection criteria. The protagonist, Dhaval Choladiya, had to navigate the complexities of cost-benefit analysis to identify the most suitable supplier, maximizing the firm’s net benefit while considering nonpricing parameters. This case study revealed the critical importance of maintaining strong supplier relationships in a competitive market and offered insights into the complexities of sourcing. Complexity academic level This case study is suitable for an undergraduate or graduate-level course on strategic sourcing or supply chain management or a risk management module in operations, strategy or finance course (e.g. how to deal with input cost fluctuations). Supplementary materials Teaching notes are available for educators only. Subject code CSS 11: Strategy.

E-Procurement Systems and Organizational Performance in Germany

Purpose: The aim of the study was to analyze the e-procurement systems and organizational performance in Germany. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The implementation of e-procurement has streamlined procurement processes, reducing costs and improving efficiency through automation and better supplier management. Organizations adopting e-procurement systems report enhanced transparency, reduced procurement cycle times, and improved compliance with procurement regulations. Additionally, the data-driven nature of e-procurement allows for better decision-making and strategic sourcing, contributing to overall organizational effectiveness and competitiveness in the market. Unique Contribution to Theory, Practice and Policy: Technology acceptance model (TAM), resource-based view (RBV) & institutional theory may be used to anchor future studies on analyze the e-procurement systems and organizational performance in Germany. Establish regular and comprehensive training programs tailored to the needs of procurement staff to ensure effective utilization of e-procurement systems. Develop a national policy framework that encourages e-procurement adoption in both public and private sectors.

Globalization and Local Procurement: A Study of Supply Chain Dynamics in Australia and Bangladesh

Purpose: The aim of the study was to analyze the globalization and local procurement: a study of supply chain dynamics in Australia and Bangladesh. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study on strategic sourcing's impact on cost reduction in Australia and Bangladesh manufacturing firms demonstrated significant positive results. It showed that strategic sourcing led to notable reductions in procurement costs, enhanced supplier management, negotiation, and risk mitigation strategies. The findings underscored the importance of aligning procurement strategies with organizational goals for sustainable cost reductions and competitive advantages in the sector. Unique Contribution to Theory, Practice and Policy: Resource dependence theory (RDT), transaction cost economics (TCE) & institutional theory may be used to anchor future studies on analyze the globalization and local procurement: a study of supply chain dynamics in Australia and Bangladesh. Businesses in both Australia and Bangladesh should prioritize building strong relationships with local suppliers to enhance supply chain resilience. Policymakers in both Australia and Bangladesh should create supportive regulatory frameworks that promote local procurement practices.

Strategic sourcing decisions: A Swiss bank responding to the dynamics of the core banking system market

This case examines strategic challenges encountered by Berner Kantonalbank (BEKB), a prominent regional Swiss bank. The bank adapts its sourcing decisions related to its core banking system amidst the evolving landscape of the core banking software market. The narrative unfolds against unfulfilled strategic goals in a changing IT industry, revealing the complexities and decisions that shape BEKB’s approach to core banking system sourcing. In 2010, BEKB outsourced its core banking solution to Hewlett Packard (HP). This encompassed the transfer of all employees of its former subsidiary, RTC. RTC had formerly developed and operated BEKB’s core banking solution. The strategic move to outsource aimed to leverage HP’s capabilities for cost-effective core banking system operations. BEKB anticipated enhanced core banking system capabilities at a reduced cost, while HP sought to establish itself in the core banking software market. However, instead of expanding BEKB’s core banking system customer base, clients increasingly migrated to other providers. The evolving circumstances placed BEKB and HP in a mutual dependency, reaching a critical juncture when the bank decided to terminate the contract, which yielded a spectrum of strategic options. The decision taken endured for a few years. Subsequently, another strategic reevaluation was necessary. This case delves into the intricate interplay between sourcing decision and IT software product dynamics, offering perspectives from client and vendor. It sheds fresh light on strategic sourcing decision-making within the evolving landscape of an increasingly complex IT services environment.

The Influence of Strategic Procurement on the Performance of the European Naval Defense Industry

ABSTRACT The naval defense industry plays a crucial role in national security, particularly in the context of global rearmament and shared threats. However, the industry’s performance in Europe has been hindered by factors such as decreased fleets, shrinking industry capabilities, and increasing production costs. This study of 102 large surface vessels (frigates and destroyers) from eight European countries found that production time is positively correlated with technical variables such as weight and speed. A small but significant learning effect also existed, with a 1.5-month decrease for each marginal increase of one unit in the batch. Regarding strategic sourcing, the study found no effect of the share of US subsystems on production time. However, European cooperation led to an increase in production time, likely due to higher coordination costs. Conversely, importing subsystems from a European ally tended to reduce production time. The study’s findings highlight the challenges facing the naval defense industry in Europe and suggest that strategies such as increasing batch size and cooperation with European allies can help to improve performance.

Sourcing from risky reverse channels: Insights on pricing and resilience strategies in sustainable supply chains

This study examines the resilience and sustainability of supply chains amid global disruptions, with a particular focus on the essential role of reverse logistics. Through a game-theoretic approach, we explore manufacturer decisions to source from either reliable but expensive raw materials or cost-effective yet riskier recycled or recyclable materials from the reverse logistics channel. Our analysis outlines three primary sourcing strategies: sourcing exclusively from suppliers (SS), sourcing solely through retailer reverse channel (RS), and a balanced dual sourcing (DS) approach. Our findings reveal the economic viability that recycling outsourcing is influenced by market demand and disruption risks. Notably, in scenarios of constrained market potential, the cost advantage of using recycled materials from less reliable reverse logistics channels surpasses the risks associated with supply chain disruptions, suggesting a complex cost-benefit landscape amidst supply uncertainties. Moreover, the stability of suppliers emerges as a pivotal factor in strategic sourcing decisions, underscoring the need to consider both economic efficiencies and supply reliability. The study also evaluates the dynamic competition between manufacturers and retailers, shedding light on how strategic adjustments driven by sustainability and resilience goals can enhance profitability and sustainability. It was found that despite the threat of disruptions, manufacturers benefit more from engaging with risky reverse channels under specific conditions, underscoring the nuanced decision-making required in uncertain supply scenarios. This research advances sustainable supply chain management by highlighting strategic complexities and the need for understanding economic efficiencies and supply stability, offering insights for navigating disruptions and fostering resilient, sustainable supply chains.

Value chain management practices and value creation in sub-Saharan African apparel firms

Purpose: This study explores value chain management (VCM) practices in the sub-Saharan African apparel industry, developing a strategic framework to enhance value creation.Design/methodology/approach: A quantitative research design was adopted, surveying 430 managers across the apparel value chain. Data were analysed using factor, correlation, and regression analyses to ascertain the impact of VCM practices on value creation. However, it is essential to notice that the study’s findings are limited to the sub-Saharan African context and may not directly apply to other regions.Findings/results: The analysis revealed a strong correlation between specific VCM practices, such as information sharing, incentive realignment, agile manufacturing, and value creation. These practices help firms to navigate the industry’s complexities and leverage regional opportunities.Practical implications: The study provides a valuable framework for managers, highlighting customer-centricity and strategic sourcing strategies. These strategies are crucial for enhancing operational efficiency and competitive positioning in the global market.Originality/value: The study offers original insights by empirically validating VCM practices and their contribution to value creation within the sub-Saharan apparel sector. The strategic framework fills a gap in the literature and aids the sector’s integration into the global value chain.

An Integrated Model of Digital Adoption, Strategic Sourcing, Inventory Management and Procurement Excellence Driving Firm Performance

An Integrated Model of Digital Adoption, Strategic Sourcing, Inventory Management and Procurement Excellence Driving Firm Performance

Strategic Sourcing and Performance of Lake Region Economic Bloc, Kenya

The devolved governments in Kenya undertake projects that make up over 50% of government spending and are important to the economy. To improve the performance of projects and efficiency in service delivery, Kenyan county governments commonly award bids using strategic sourcing. However, despite the adoption of strategic sourcing, the performance of devolved systems of government remains poor. The general objective of this study was to determine the effect of strategic sourcing on performance of devolved systems of government in the Lake Region Economic Bloc, Kenya. The specific objectives were to establish the effect of supplier relationship management, market research, analytics, and multiple sourcing on the performance of devolved systems of government in the Lake Region Economic Bloc, Kenya. The study is significant to the administration of County governments in the Lake Region Economic Bloc, the policy makers as well as other researchers and academicians. The study adopted a cross sectional research design. The target population of the study was all the 47 county governments in Kenya, which are categorized into 6 regional blocs. The target population of the study was all the 47 county governments in Kenya, which are categorized into 6 regional blocs. The respondents included heads of departments in finance, procurement, public relations and information and communication technology as well as their assistants in 14 Counties in the Lake Region Economic Bloc (LREB). A semi-structure questionnaire was used in the collection of data. Data was analyzed using qualitative data and quantitative methods. Qualitative data was analyzed using content analysis and the results were presented in a narrative form. Descriptive and inferential statistics were used in analyzing quantitative data with the help of the Statistical Package for Social Sciences (SPSS version 25) statistical software. Quantitative results were presented in the form of tables and figures. The study found that supplier relationship management has a positive and significant effect on performance in devolved systems of government in the Lake Region Economic Bloc, Kenya. The study also established that market research has positive and significant effect on performance in devolved systems of government in the Lake Region Economic Bloc, Kenya. The study further revealed that analytics has positive and significant effect on performance in devolved systems of government in the Lake Region Economic Bloc, Kenya. Also, the study found that multiple sourcing has positive and significant effect on performance in devolved systems of government in the Lake Region Economic Bloc, Kenya. The study recommends that County government should develop training programs and workshops for government procurement officers and suppliers to enhance their understanding of procurement processes, compliance requirements, and best practices. County governments should regularly update market information related to various goods and services required by the government. In addition, County governments should create a dedicated analytics department or unit within the government structure to focus on data collection, analysis, and interpretation. In addition, County governments should monitor supplier performance regularly and use data-driven insights to make decisions about contract renewals or terminations

Make Vs Buy Analysis In Automobile Industries

The make vs buy analysis is a critical decision-making process that organizations undertake to determine the most efficient and cost-effective approach to procuring goods or services essential to their operations. This explores the intricate interplay between cost, quality, and lead time in shaping sourcing decisions, delving into the multifaceted considerations and complexities involved in the decision-making process. Through a comprehensive examination of cost factors, quality considerations, and lead time dynamics, this study aims to provide actionable insights and practical recommendations for organizations navigating the complexities of strategic sourcing. By adopting a holistic approach to cost analysis, prioritizing quality assurance, and leveraging advanced planning and forecasting techniques, organizations can optimize their supply chain efficiency, enhance their agility in responding to market demands, and drive sustainable growth in an ever-evolving business landscape. This abstract encapsulates the key findings and insights from the thesis, offering a roadmap for organizations seeking to make informed decisions and achieve strategic alignment in their sourcing strategies. Key Words: Cost Analysis, Fixed Costs, Variable Costs, Quality Control, Lead Time, Scalability, Supplier Reliability, Flexibility, Risk Assessment.

Effective cost management strategies in global supply chains

This review paper explores effective cost management strategies within global supply chains, highlighting the necessity for businesses to adapt and innovate in response to complex logistical operations, economic fluctuations, and geopolitical risks. It delves into strategic sourcing and procurement, inventory management techniques such as Just-In-Time (JIT) systems, logistics and transportation optimization, and the pivotal role of technology and automation in enhancing efficiency and reducing costs. The paper identifies gaps in current literature, particularly the need for more research on sustainable practices and risk management strategies. Recommendations for practical implementation are provided, emphasizing flexibility, resilience, and the importance of leveraging technology. Future research directions are suggested to further understand the dynamics of global supply chain cost management and the integration of sustainability practices. Keywords: Global Supply Chain, Cost Management, Strategic Sourcing, Inventory Management, Supply Chain Technology, Risk Management.

Advancing financial transparency and ethical governance: innovative cost management and accountability in higher education and industry

Advancing financial transparency and ethical governance in higher education and industry is imperative for fostering trust, accountability, and sustainability. This review explores innovative cost management strategies and accountability measures to achieve these goals. In both higher education and industry, financial transparency ensures stakeholders have access to accurate, timely, and comprehensible financial information. This transparency is crucial for building trust among investors, donors, regulators, and the public. Moreover, it facilitates informed decision-making and enhances organizational efficiency. One innovative approach to advancing financial transparency is the adoption of cloud-based financial management systems. These systems offer real-time data accessibility, automated reporting, and customizable dashboards, enabling institutions to track expenditures, revenue streams, and budget variances more effectively. Additionally, blockchain technology holds promise in ensuring the integrity and immutability of financial records, reducing the risk of fraud and corruption. Ethical governance goes hand in hand with financial transparency, emphasizing integrity, honesty, and accountability in organizational practices. Robust governance frameworks establish clear lines of responsibility, codes of conduct, and mechanisms for oversight. In higher education, this involves empowering governing boards with diverse expertise and ensuring academic and financial decisions align with institutional missions. To enhance ethical governance, institutions can implement whistleblower protection programs and conduct regular ethics training for employees. These initiatives promote a culture of transparency and integrity, encouraging individuals to report unethical behavior without fear of retaliation. Cost management plays a pivotal role in financial sustainability and ethical governance. Traditional cost-cutting measures often focus on reducing expenses without considering long-term implications. Innovative cost management, however, emphasizes efficiency, value creation, and sustainability. Activity-based costing is one such approach that allocates costs based on the activities that drive them, providing a more accurate understanding of resource consumption. This enables institutions to make informed decisions about resource allocation and pricing strategies. Furthermore, strategic sourcing and vendor management help optimize procurement processes, negotiate favorable contracts, and mitigate risks associated with third-party relationships. Collaborative partnerships with industry stakeholders can also facilitate knowledge sharing, resource pooling, and cost-saving opportunities. Accountability mechanisms are essential for ensuring that financial resources are used responsibly and in alignment with organizational objectives. Performance metrics and key performance indicators (KPIs) provide benchmarks for evaluating financial and operational performance. These metrics should be transparent, relevant, and aligned with strategic goals. Advancing financial transparency and ethical governance requires a multifaceted approach encompassing technological innovation, robust governance frameworks, strategic cost management, and accountability measures. By embracing these principles, both higher education institutions and industries can build trust, enhance efficiency, and achieve long-term sustainability. Keywords: Financial Transparency, Ethical Governance, Cost Management, Accountability, Higher Education, Industry

Effects of Strategic Sourcing on Cost Reduction: A Case Study of Manufacturing Companies in Bangladesh

Purpose: The aim of the study was to analyze the effects of strategic sourcing on cost reduction: a case study of manufacturing companies in Bangladesh. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study on strategic sourcing's impact on cost reduction in Bangladeshi manufacturing firms demonstrated significant positive results. It showed that strategic sourcing led to notable reductions in procurement costs, enhanced supplier management, negotiation, and risk mitigation strategies. The findings underscored the importance of aligning procurement strategies with organizational goals for sustainable cost reductions and competitive advantages in the sector. Unique Contribution to Theory, Practice and Policy: Transaction cost economics (TCE), resource-based view (RBV) & contingency theory may be used to anchor future studies on analyze the effects of strategic sourcing on cost reduction: a case study of manufacturing companies in Bangladesh. Provide training and capacity-building programs for managers and procurement professionals in Bangladeshi manufacturing companies to enhance their understanding and implementation of strategic sourcing strategies. Advocate for policy reforms that support the development of a more transparent, competitive, and efficient supplier market in Bangladesh.

Retraction notice: Improving supplier performance and strategic sourcing decisions by integrating jobshop scheduling, inventory management and agile new product development

Retraction notice: Improving supplier performance and strategic sourcing decisions by integrating jobshop scheduling, inventory management and agile new product development

Vertical Coopetition: Effect of Supplier Relationship Management Strategies on Supplier Involvement in New Product Development

In the complex “vertical coopetition” relationship, this article aims to explore how manufacturers develop supplier relationship management (SRM) strategies to motivate supplier involvement in their new product development (NPD) activities. It investigates the influence of two competitive and cooperative SRM strategies (introducing competition for suppliers and holding supplier shares) on coinnovation performance which is the result of supplier involvement measured in a time-lagged manner. This article used the panel data on the Japanese automobile industry from 1994 to 2016 with fixed-effect negative binomial regression analysis. The results shed light on the inverted U-shaped effect of introducing competition for suppliers and the positive effect of holding supplier shares on coinnovation performance. They also indicate that holding supplier shares can weaken the curved role of introducing competition in coinnovation, but the inverted U-shape persists. Holding a high proportion of a supplier's shares and simultaneously introducing moderate competition for the supplier would be a relatively better strategy for increasing supplier involvement in NPD and coinnovation. The findings provide insights into strategic sourcing and contribute to the interfirm coopetition literature by focusing on vertical buyer-SRM strategies and their roles in supplier involvement in NPD.

The Intersection of Strategic Sourcing and Artificial Intelligence: A Paradigm Shift for Modern Organizations

The Intersection of Strategic Sourcing and Artificial Intelligence: A Paradigm Shift for Modern Organizations

Covid-19 and the South African pharmaceutical supply chain

This research aimed to identify the key drivers of the pharmaceutical supply chain during the COVID-19 pandemic disruption, focusing on the South African pharmaceutical industry. The study aimed to unveil the dynamic strategies and challenges experienced during the pandemic and suggest recommendations for resilient supply chain operations. The study drew on established supply chain management theories and integrated them with the unique and novel circumstances of the COVID-19 pandemic. It mainly referred to theories regarding pricing, strategic sourcing, ICT usage, product availability, and logistics management contextualised within the pharmaceutical industry. An exploratory research approach was adopted to uncover the five overarching themes that function as pharmaceutical supply chain drivers during the COVID-19 pandemic. Semi-structured interviews were used to acquire the primary data with industry supply chain professionals, supplemented with secondary data from industry reports and relevant literature. The findings revealed that the pricing of medications, strategic sourcing decisions, information and communication technology, the availability of pharmaceutical products, and logistics management played critical roles in the pharmaceutical industry's supply chain during the COVID-19 pandemic. Disruptions caused by the COVID-19 pandemic led to challenges such as price hikes, supply shortages, and logistical complications. The study provides crucial insights into managing supply chain disruptions amid a global health crisis. Implementing dynamic pricing mechanisms, developing resilient sourcing strategies, using ICT effectively, improving inventory management, and enhancing logistics management are recommended for robust supply chain operations. The findings contribute to academia by enriching the existing body of knowledge and offering practical solutions for industry supply chain professionals. The research is original and timely, offering a unique perspective on the South African pharmaceutical industry's supply chain during an unprecedented global health crisis. The results are valuable for academia and industry, shedding light on the adaptive strategies, challenges encountered, and lessons learned from navigating the pharmaceutical supply chain during the COVID-19 pandemic.