Strategic Sourcing Research Articles

The Perspectives Of Business And Of Cost Issues That Are Considered In Strategic Sourcing From Malaysian Organizations

This paper analyzes human resource management techniques, including human resource outsourcing, and the size of the human resources organization. One of HRM techniques is defined as "facilitation," "accumulation," and "utilization." To meet the needs of HR outsourcing, the data for the report was compiled from feedback from 232 entities, which included 113 organizations participating in the outsourcing process. The results indicate that companies focus on outsourced HR functions while they have an emphasis on employee empowerment and performance improvement through facilitative management strategies. Concurrently, companies use HR contracting, which often leads to a decrease in the scale of the HR staff. Therefore, it is of critical importance that the organisations conduct thorough and thoughtful exploration of outsourcing of HR within their organizations. The level of HR functions within the company is anticipated to be significantly diminished if HRM strategy is pursued as an Outsourcing helps their consideration of HR departments to get ahead of HRM strategies.

The effect of supplier innovation on supply chain agility: Evidence from coffee shops in Malang area

With the agility of supply chain, competitive advantage can be maintained by business people by responding to environmental changes quickly and facing uncertainty. This research investigates the impact of supplier innovation on supply chain agility with information sharing and strategic resource as a mediator. At the same time testing the effect of information sharing and strategic sourcing on supply chain agility. The research sample used 65 coffee shops which were obtained from the response of the owner or manager of the coffee shop in Malang Area, known as the city of a million coffee shops. The rapid development of coffee shops in Malang Area demanding coffee businesses to respond quickly to changing consumer trends by maintaining the supply of coffee beans from the highest quality suppliers. This study was analyzed using structural equation modelling methods. The results revealed that supplier innovation significantly influences information sharing, strategic resources and supply chain agility. In addition, information sharing and strategic resources have a strong influence on supply chain agility. Thus, managers and or coffee shop owners need to establish good and sustainable relationships, especially to deal with changes in the business environment.

Is dual sourcing a better choice? The impact of reliability improvement and contract manufacturer encroachment

This paper investigates the strategic sourcing choice of an original equipment manufacturer (OEM) in the presence of contract manufacturer (CM) encroachment and reliability improvement. In the absence of CM encroachment, the OEM prefers dual sourcing when the fixed ordering cost is small. In contrast, faced with CM encroachment, the OEM may switch its sourcing strategy from single sourcing to dual sourcing as the level of competition increases. Moreover, a higher reliability investment cost enhances the OEM’s propensity to choose dual sourcing strategy. Furthermore, the OEM is more likely to choose a single sourcing strategy when the initial yield rate is higher. Under certain specific conditions, both the competitive CM and the OEM are better off when the OEM chooses the single (dual) sourcing strategy, thereby establishing a win–win situation.

Sourcing under competition: The implications of supplier capital constraint and supply chain co-opetition

This paper investigates a manufacturer’s strategic sourcing and supplier financing strategies under downstream horizontal competition and co-opetition. When the manufacturer and the rival engage in a simultaneous-move game, we show that the manufacturer should always exclusively source from and offer finance to a cost-advantageous supplier if the latter is severely capital-constrained. If the supplier is moderately capital-constrained, however, the manufacturer’s preferred sourcing strategy depends on the type of the backup supplier, which leads to a horizontal competition or co-opetition structure. We also examine the robustness of the results by studying the sequential-move game.

Strategic sourcing in Africa: the case for the labor market

PurposeThis paper aims to describe the impact of the labor market on the integration of Africa into the global supply chain (GSC).Design/methodology/approachThe analysis of trends and comparison of data for 55 nations and territories in Africa using existing data from the World Bank and International Labor Organization, and government and nongovernment reports took place using qualitative content analysis methodology.FindingsAfrica’s labor market enhances the continent’s integration into the GSC despite challenges in other areas, with three pillars identifying the labor market’s strategic sourcing decisions.Research limitations/implicationsThe analysis is limited to trends analysis, some of which may have changed during the study.Practical implicationsThe findings will enable the global business industry and governments to envision the potential and design Africa’s labor market competitiveness across the African continent. The findings also establish the necessity and opportunity for enhanced infrastructure to attract additional foreign direct.Social implicationsThe social implication of this paper is beyond the potential of Africa’s labor market. The paper illustrates how the African is setting to become the next sourcing hub for the global supply chain, allowing scholars to close any prevailing global sourcing gap in research.Originality/valueThis paper describes the potential of Africa’s supply of low-cost labor market and its integration in the GSC.

Optimal Global Liner Service Procurement by Utilizing Liner Service Schedules

For global shippers (i.e., multinational manufacturers or retailers), strategic sourcing of container liner shipping services from ocean carriers is an important element of successful global supply chain management. We study how to utilize information about different ocean carriers’ liner service schedules so that shippers can optimize their sourcing decisions over the selection of carriers to transport container cargoes around the world through multiple shipping lanes. We first introduce a deterministic optimization problem, where cargo demands are given in advance and in which inventory holding costs are included to capture the impacts of liner service schedules on the total operating cost. We formulate the deterministic optimization problem as a mixed integer linear program, which can be simplified by exploiting a totally unimodular property, and can thus be solved directly by a general optimization solver. To further capture the impact of liner service schedules on shippers’ resilience to the uncertainties in cargo demands, we then introduce a two‐stage robust optimization counterpart of the deterministic problem based on a probability‐free demand uncertainty set. As the two‐stage robust optimization problem is challenging to solve, we derive some novel reformulations that can enable us to develop an effective solution method. By exploiting the information about liner service schedules, we show how our proposed models and solution method can help shippers to optimize their liner service procurement decisions.

Application of gray DEMATEL-ANP in green-strategic sourcing

The study aims to identify and prioritize the criteria and sub-criteria dimensions essentials for green strategic sourcing. Data were taken from the experts working in the automobile industry. By applying the novel Grey-DEMATEL-ANP (GDANP) approach, we identified the technology and environmental management system as the key sub-criteria dimensions to be considered while selecting the supplier. Besides, we also found quality and delivery time as the important factors to be considered while selecting a supplier for green supply chain management (GSCM). To present the useful application of our findings, we conducted an empirical study by taking the automobile industry of an emerging market as the case. The major contribution of the study is the application of variant D-ANP in identifying the important dimensions of supplier selection.

Digital supply chain to unlock new agility: a TISM approach

PurposeTraditional supply chain arrangements have failed to keep up with escalating customer demands and breakthrough innovations. The way forward is a flexible yet innovative network that leverages ecosystem partners and digital tools to unlock new agility. The paper aims at identifying and analyzing numerous critical success factors (CSFs) that may improve the efficiency of a digital supply chain.Design/methodology/approachTwelve CSFs are identified in this paper through an extensive literature survey. Expert opinion has been considered and the hierarchical structure built using total interpretative structural modeling (TISM) which highlights the interdependencies between these CSFs. Cross-impact matrix multiplication (MICMAC) is used to determine the driving and dependence power of each factor.FindingsThis study identified 12 CSFs through an extensive literature survey. The ISM model resulted in six different levels beginning from redesign organization at the bottom of the structure. The TISM model explained why redesigning the organization is pivotal to bringing about novel agility in the supply chain. MICMAC analysis confirmed that the following enhanced the success of a digital supply chain: Sales and Operation Planning Strategies, Strategic Sourcing Techniques, Smart Manufacturing Processes and Warehouse Management.Research limitations/implicationsVarious other components contributing to the 12 CSFs identified in this paper may be discovered and detailed in future research. Additionally, further research is required to expand the existing technology-based services structural model to a more empirical form.Practical implicationsThis study offers a comprehensive but not exhaustive list of CSFs essential to digital supply chain growth. It will enable market experts and leaders to concentrate on key factors leading to tactical decisions and maximum value for firms.Originality/valueThe paper seeks to add to the body of knowledge on real digitally-led supply chain transformation, which is still in its early stages. This study is one of the first, if not the first, to examine success factors critical to the improvement of the performance of the supply chain. It lays the foundation for further research in this field.

УПРАВЛІННЯ МАТЕРІАЛЬНО-ТЕХНІЧНИМ ЗАБЕЗПЕЧЕННЯМ ПІДПРИЄМСТВА НА ПРИНЦИПАХ СОРСИНГУ

Today, in conditions of increased competition, the company's advantages can be formed in any area of its activities. One of the promising areas of competitive advantage can be called the field of logistics, as a quality system of purchase and sale of goods can significantly minimize the costs of the enterprise and ensure the growth of its financial results. Effective logistics management is of particular importance for enterprises engaged in foreign economic activity, as the cost of logistics for such companies is higher compared to organizations operating exclusively in the domestic market. The article investigates the problems of management of the logistics system of the enterprise. The main scientific approaches to the management of the logistics system both in terms of classical management and from the standpoint of logistics are considered. The issue of strategic sourcing approach as an orderly process, covering all activities of the enterprise, which are part of the procurement cycle, from the development of product specifications to the receipt of finished goods and services and their payment is also considered. The article proposes an approach to improving the logistics of enterprises through the application of logistics concepts in its management and sourcing principles. The task is to generalize scientific views on the nature and sources of the benefits of effective management of logistics of the enterprise, to determine the conditions and general features of the mechanisms and the main directions of formation and implementation of effective management of MTZ in modern conditions. The object of study is the management system of logistics of the enterprise. The subject of the study is a set of theoretical and methodological principles and methods of management and organization that affect the management system of logistics of the enterprise. The practical significance of the obtained results is to substantiate the features of logistics management of the enterprise as an effective tool to ensure its competitiveness.KEYWORDS: INTEGRATED SUPPLY CHAIN MANAG

Use of Supply Chain Risk Management Approach for Achieving Firms’ Performance

Purpose -The purpose of this paper is to examine effectiveness use of supply chain risk management approach for achieving firms’ performance. Design/Methodology/Approach- A cross-sectional approach was adopted with primary data collected. The data yielded a response rate of 375 from electricity firms in Kenya. The data collected were put through rigorous statistical analysis to test content validity as well as reliability. Further, simple linear regression model was used to test relationships between strategic sourcing and firm’s performance. Findings- The finding proposes that a successful execution of supply chain risk management (SCRM) increases organizational performance through regular risk assessment and training of all stakeholders. Further, the paper reveals that majority of electricity firms were reluctant in sharing supply chain risk information. Research limitations/implications-The study provides managers with insightful understanding and the application of SCRM for achieving firm’ performance. Also, the study show that supply chain risk management generally increases the performance of electricity firms but not all SCRM approaches are covered in the study and therefore a similar study can done in different sector to validate the findings. Originality/Value The study provides a holistic approach in the application and use of SCRM for achieving firms’ performance. Also, the identified gaps provides future direction in research and encourage new techniques for combating SCRM for achieving firm’ performance.

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.

Influence of Strategic Procurement Management on The Performance of State Corporations in Kenya

Purpose: The purpose of the study was to establish whether strategic procurement management has contributed to the performance of state corporations in Kenya.Methodology: The study employed a descriptive research design; the researcher preferred this method because it allowed an in-depth study of the subject. The target population was all the 187 heads of procurement of the state corporations in Kenya. From the four strata, a sample of 127 was selected using simple random sampling. Semi-structured questionnaires were administered to collect qualitative and quantitative data. Once collected, data was analyzed using descriptive and inferential statistics. Quantitative data was analyzed using multiple regression analysis. The qualitative data generated was analyzed by use of Statistical Package of Social Sciences (SPSS) version 21.Results: In regard to inventory management system, the regression coefficients of the study show that it has a significant influence of 0.561 on performance of state corporations. Second in regard to strategic sourcing, the regression coefficients of the study show that it has a significant influence of 0.198 on performance of state corporations. With regard to supply base leveraging, the regression coefficients of the study show that it has a significant influence of 0.112 on performance of state corporations. Lastly, in regard to the fourth objective, the regression coefficients of the study show that it has a significant influence of 0.019 on performance of state corporations. Conclusion: Based on the findings, the study concluded that supply base leveraging, inventory management system, e-procurement and strategic sourcing have a positive relationship with performance of the state corporations. Policy Recommendation: The study recommended that public institutions should embrace strategic procurement management so as to improve performance and further researches should to be carried out in other public institutions to find out if the same results can be obtained.

Strategic Sourcing Under Severe Disruption Risk: Learning Failures and Under-Diversification Bias

Problem definition: We study sourcing behavior in severe conditions where supply disruptions are rare but carry the potential of wiping out several rounds worth of a firm’s profit. Academic/practical relevance: The tradeoff between scale economies from supplier consolidation and risk mitigation from supplier diversification is at the core of firms’ sourcing strategy and one that is empirically understudied. Methodology: We study supplier diversification through a behavioral lens and test theoretically derived predictions under controlled laboratory conditions. Results: Our data provide strong evidence for under-diversification. We posit that this pattern is partly because of the fact that investing in supplier diversification involves an upfront cost to achieve a delayed, and rarely encountered, benefit. Managerial implications: Under-diversification bias is costly, and its causes are difficult to overcome, presenting firms with the daunting task of devising debiasing mechanisms that reinforce a supplier diversification strategy when the rarity of disruptions almost always render supplier consolidation the ex post preferred strategy.

Systematic review of sourcing and 3D printing: make-or-buy decisions in industrial buyer\u2013supplier relationships

Additive manufacturing (AM) is regarded as a technology that has transformative and disruptive potential in nearly all industries. However, AM is not only about new production equipment and processes. Given the decreasing degree of vertical integration in many companies, suppliers add significant value to the finished product. AM might lead to the redesign of production networks, including a scenario in which the buyer uses AM to produce parts with data provided by suppliers. Overall, AM could have a major impact on the ways in which buyers and suppliers collaborate in the future. Nevertheless, research on AM in the field of industrial procurement remains scarce. This is surprising, given that AM is not only changing traditional procurement categories and creating new ones (comprising printers, powder raw materials, data and the associated engineering services) but AM’s widely discussed potential for decentralisation might also restructure the logistical aspects (transport, stocks) of supply chains. In addition, AM may resurrect the old procurement question of ‘make or buy’. Current research focuses on the logistical aspects of AM and concerns such issues of decentralisation (such as the diminishing need for transportation and the design of transport networks). In contrast, this research addresses the question of whether AM demands new answers to strategic sourcing questions. For this purpose, academic journal literature concerning procurement and AM search strings is reviewed. Selected articles are analysed using a fine-grained analytical framework of procurement strategies. The findings show that existing research lacks theoretical approaches and a systematic view of the topic. Specifically, the analysis reveals a number of distinct knowledge gaps, which present several potential directions for future research.

Impact of supplier innovativeness, top management support and strategic sourcing on supply chain resilience

PurposeThe purpose of this study is to explore the importance of supplier innovativeness (SI), top management support (TMS) and strategic sourcing (SS) in the development of supply chain (SC) resilience. The study also argues that organization culture (OC) strongly influences SI, TMS and SS in their importance in generating SC resilience.Design/methodology/approachThe study adopted a cross-sectional approach for collecting online-survey-based responses for evaluating the validity of the proposed associations. Respondents were chosen ensuring that they have sufficient exposure in SC operations in their respective designations. With two reminders, around 212 completed responses were received and analyzed using partial least squares in SmartPLS 2.0.M3.FindingsFindings suggested TMS as a positive enabler of SC resilience. However, although SI and SS had positive influences, they were not significant. The study argues that this may be attributed to the presence of OC as a strong precursor for SI, TMS and SS. The findings showed that OC is indeed a strong predictor of SI, TMS and SS.Originality/valueThe study has undersigned empirically the influence of OC in the development of SI, TMS and SS. The study is the foremost to acknowledge the influence of SI, TMS and SS on SC resilience.

Value first, cost later: Total value contribution as a new approach to sourcing decisions

AbstractFirms compete on value, not cost alone. However, sourcing decisions are often heavily weighted towards minimizing costs, even though these decisions also can affect revenue, risk, and other stakeholder values. To address this disconnect, we introduce a new approach to strategic sourcing, “total value contribution” (TVC). The TVC name by itself promotes attention to value. TVC's structured approach begins with the question: “what do our customers, current and future, value about our products?” The TVC approach builds on insights from the literature on individual and group decision‐making to offset human biases and organizational incentives that emphasize cost reduction. TVC builds on gains already achieved by “total cost of ownership” (TCO) sourcing methods, which broadened the list of factors considered in sourcing. We provide examples of TVC‐like thinking in real organizations and argue that such thinking would be more common with the dissemination of TVC. We also provide access to a version of this JOM Forum piece suitable to assign to students, and discuss a new teaching note which describes how to implement TVC in a popular strategic sourcing teaching case. We believe widespread implementation of TVC would improve both organizational and social outcomes.

Selection and Development of Language Resources in Subsidiaries: The Case of Japanese MNCs in Asia

Although there have been conceptual and theoretical works that describe how multinational companies (MNCs) can leverage the multilingual environment, we still know little about how MNCs deal with language diversity in their foreign subsidiaries. To address the research gap, we conducted a qualitative case study with 83 subsidiaries of Japanese MNCs in 9 Asian countries as a preliminary investigation and 34 subsidiaries of Japanese NNCs in China as a more in-depth examination. We found that in the MNCs’ multilingual environment that includes parent language, local language, and English as the three main language options for the subsidiaries, the subsidiaries select their functional language based on the strategic and knowledge sourcing perspectives. The subsidiaries then mobilize and allocate managerial resources to develop distinctive language resources. Based on the findings, we developed a model that integrates strategy-oriented language selection and incremental development process of language resources in MNCs’ foreign subsidiaries. The findings and the proposed model support the view that language diversity in MNCs can be valuable resources and provide the deeper understanding about how MNCs’ foreign subsidiaries develop distinctive language resources tuning to their strategic mission and knowledge source.

E-Procurement as a Strategic Sourcing Tool in the Beverage Industry in Zimbabwe

This study evaluated the impact of e-procurement as a strategic sourcing tool in the Beverage Industry in Zimbabwe. A quantitative survey of 57 respondents drawn from the key players in the Beverage Industry in Harare, Zimbabwe was conducted using a questionnaire. In line with the research objectives, descriptive statistics were calculated and cross tabulations were also performed in SPSS to produce outputs that provided answers to the research questions. The results show that through the use of e-procurement, companies are able to move towards partnership or lean supply with a smaller number of more technically proficient suppliers. The study concluded that there is a significant positive association between e-procurement and improvement in procurement efficiency. The study recommends that organisations develop adequate business processes to support e-procurement and the alignment of existing procurement processes with e-procurement procedures.

A data science and open source software approach to analytics for strategic sourcing

Data science has emerged as a significant capability upon which firms compete. Although many data scientists and the high-performing companies that employ them seem to have developed robust methods to employ data sciences practices to achieve competitive advantages, there have been few attempts at defining and explaining how and why data science helps firms to achieve desired outcomes. In this paper, we describe how data science, which combines computer programming, domain knowledge, and analytic skillsets to scientifically extract insights from data, can be used to help meet the growing demand of analytic needs across an organization’s value chain. This is done through the illustration of an applied data science initiative to a strategic sourcing problem via the use of open-source technology. In doing so, we contribute to the growing data science literature by demonstrating the application of unique data science capabilities. Moreover, the paper provides a tutorial on how to use a specific R package along with an actual case in which that package use used.

Strategic sourcing under recall loss sharing and product quality investment

Product recall has been a widespread practical operation risk in the production outsourcing. To remit even avoid product recall risk, this paper considers a two-echelon supply chain where the original equipment manufacturer (OEM) orders a critical component from one or two contract manufacturers (CMs) and uses it to produce finished product with potential quality defect. The CMs can decide investment level to reduce defect possibility and share recall loss with the OEM once product recall is implemented. When the recall loss sharing rate is fixed, the OEM may adopt the single sourcing strategy or the dual sourcing strategy which depends on the recall loss sharing rate. Moreover, if the sharing rate is relatively small, the single sourcing strategy is an optimal choice for the OEM. However, when the recall loss sharing rate is determined by the OEM, she prefers to adopt the dual sourcing strategy. Meanwhile, an increase of the recall loss sharing rate may not force the CM to improve product quality. By the numerical analysis, if the marginal recall loss is large or the wholesale price is relatively small, the OEM and the CMs can reach a win-win scenario. Finally, we examine an extension in which the CMs have pricing ability on wholesale price, and the result shows that the OEM can not obtain a cost-reduction benefit under the dual sourcing strategy.