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Article
Publication date: 21 February 2018

Andreas H. Glas, Florian U. Henne and Michael Essig

Performance-based contracting (PBC) is a business model for the adaptive and innovative delivery of product-service systems. In PBC, the provider is paid according to the…

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Abstract

Purpose

Performance-based contracting (PBC) is a business model for the adaptive and innovative delivery of product-service systems. In PBC, the provider is paid according to the service performance with the aim of providing monetary incentives to safeguard possible outcomes as much as possible for the PBC customer. Performance measurement and its management are crucial for PBC success and, in particular, for the pay-for-performance link. However, the literature on PBC performance management is rather sparse, and there has been no systematic review on the topic. Thus, the purpose of this paper is to fill that gap and to present a comprehensive and systematic review of performance measurement and management in the PBC context.

Design/methodology/approach

The paper builds on a literature review based on a sample of 102 subject-relevant articles from academic journals. The content analysis follows a two-step procedure. First, the articles are coded following a process-based research framework. Second, the content of each process step is assessed in a qualitative text analysis.

Findings

The results show a surprising scarcity of papers that explicitly address performance management topics in the context of PBC. Only the topics of performance specification and performance indicators are broadly addressed, whereas in all of the other areas, e.g., strategic alignment, data capture and reporting, only limited specific findings could be found.

Research limitations/implications

The paper concludes that future research on performance management in PBC should expand its theoretical framework and empirical efforts in four specific proposed directions.

Originality/value

The paper provides an up-to-date review that is focused on performance management and measurement in the emerging context of PBC.

Details

International Journal of Operations & Production Management, vol. 38 no. 11
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 24 October 2021

Matthias M. Meyer, Andreas H. Glas and Michael Eßig

The SARS-CoV-2 pandemic has had severe effects on economies worldwide and, in particular, on public institutions that must keep their operations running while supply…

Abstract

Purpose

The SARS-CoV-2 pandemic has had severe effects on economies worldwide and, in particular, on public institutions that must keep their operations running while supply chains are interrupted. The purpose of this study is to examine how public institutions act during a pandemic to ensure the security of supply.

Design/methodology/approach

The distinct focus is if, why and how public institutions have adopted additive manufacturing (AM) – a production technology colloquially known as three-dimensional printing in which a product is created by joining raw material layer by layer based on a digital model (computer-aided design [CAD] file) of the product – in reaction to supply disruptions caused by the SARS-CoV-2 pandemic. For this purpose, four cases within the context of the pandemic supply disruption are used as the units of analysis.

Findings

The findings are twofold: public institutions reacted, on the one hand, with a behavioral solution approach, trying to solve the supply disruption with new or changed forms of cooperation and collaboration. On the other hand, public institutions used a technical solution approach (TSA) as a supply disruption response and intensified their use of AM.

Research limitations/implications

This research derives an implications model that focuses on the TSA. Considering the ex ante and ex post phases of the disruption, several effects of AM on resilience are identified. The most relevant is the long-term learning effect (i.e. AM data created during this disruption might also help in a new disruption).

Practical implications

Practitioners who act under extreme pressure and uncertainty are informed by cases that have managed to close bottleneck situations with either a behavioral or TSA. Specific strategies are given for how public buyers could use AM within a pandemic situation to mitigate supply bottlenecks, such as increasing their robustness by localizing sourcing and increasing agility by combining traditional and additive supply sources. Additionally, insights are provided into how public organizations can increase their level of preparedness by including disruption paragraphs, establishing CAD databases, in contract clauses and keeping reserve contracts with AM service providers.

Originality/value

This research contrasts behavioral and technical solution concepts for a pandemic in the public sector. Thus, it provides insights into the relative benefits of AM and causes and effect with regard to how AM affects supply robustness and agility.

Article
Publication date: 6 March 2019

Andreas Herbert Glas, Clarissa Raithel and Michael Essig

In performance-based contracting (PBC), the provider is paid according to outcomes for its customer, and therefore assumes responsibility for customer risks. Previous…

Abstract

Purpose

In performance-based contracting (PBC), the provider is paid according to outcomes for its customer, and therefore assumes responsibility for customer risks. Previous studies have revealed that risk exposure is a fundamental influencing factor. Thus, the purpose of this paper is to analyze how previous experience with PBC influences the perception of risks.

Design/methodology/approach

This research is based on a cross-industry study. Factor analysis and discriminant analysis are used to reveal to what extent experience influences PBC risk factors.

Findings

It is confirmed that risk perception differs significantly according to previous PBC experience. Thus, significant learning effects are identified in the PBC context.

Research limitations/implications

Experiential learning in PBC can explain entry barriers to PBC faced by new buyers with low levels of experience. Although the internal validity of the sample is high, as all analyzed cases represent PBC buying companies, there are limitations related to external validity.

Practical implications

To manage risks this study provides a structure (12 risks, 3 aggregated factors), which could be used for risk evaluation and strategic and operative risk management. Other implications recommend, e.g., to collaborate with a PBC “veteran” when entering into PBC, as this boosts the level of PBC-related experience.

Originality/value

The findings of this study contribute to identifying PBC risks through the explorative statistical assessment of these PBC risk factors.

Details

International Journal of Productivity and Performance Management, vol. 68 no. 6
Type: Research Article
ISSN: 1741-0401

Keywords

Article
Publication date: 19 August 2021

Claudia Gesell, Andreas Herbert Glas and Michael Essig

The purpose of this paper is to examine how communication with suppliers influences performance during production ramp-up. Often, time, cost or quality targets are missed…

Abstract

Purpose

The purpose of this paper is to examine how communication with suppliers influences performance during production ramp-up. Often, time, cost or quality targets are missed in production ramp-ups while the number and frequency of ramp-ups is further increasing. The goal of this paper is thus to contribute a better understanding if and to which extend communication content or communication relationship is affecting ramp-up performance.

Design/methodology/approach

The research uses data from a dyadic survey (N = 160) in the German automotive industry. The data set comprises responses from buyers and suppliers. Constructs, namely, information and relationship quality, as well as communication satisfaction, are measured. The effect of communication is evaluated referring to cost, quality and time dimensions of performance. The analysis is applied with structural equation modeling methodology. This research is complemented by a multigroup analysis (MGA) especially comparing buyer and supplier respondent groups.

Findings

The results indicate that communication satisfaction positively influences ramp-up performance and that information quality is of higher relevance than relationship quality. Briefly, information exchange (what information to transfer) is more important than relationship management (how to transfer information). This finding contrasts previous literature focusing on relationship factors in communication settings. Furthermore, findings from MGA sustain the findings, because effects are also analyzed from a supplier’s or buyer’s viewpoint. Overall, the findings imply that supplier communication in production ramp-up must of course provide a high level of information quality. However, to optimize ramp-up performance also a high level of relationship quality is required.

Research limitations/implications

This study featured data from the German automotive industry from buyer’s and supplier’s perspective. This limits its generalizability, yet provides opportunities to test the findings through longitudinal studies, potentially gathering data from other sectors.

Practical implications

This research recommends managers deliver high information quality to improve communication satisfaction. Hence, this survey provides support for business communication o enhance ramp-up performance to achieve success in buyer–supplier relations.

Originality/value

Besides the original dyadic database, this research addresses production ramp-up as a very dynamic process. Plans and forecasts change often, thus supplier communication takes place in a stress situation. Then, communicators might overstate information quality and lose sight of relationship quality. The study contributes to this field of research and postulates that (automatic, autonomous) data exchange requires behavioral and relational support. The findings are useful for companies in stress situation (e.g. also a pandemic supply crisis) and will avoid that the optimization of information exchange disregards the relationship aspect.

Details

Journal of Business & Industrial Marketing, vol. 37 no. 5
Type: Research Article
ISSN: 0885-8624

Keywords

Article
Publication date: 2 February 2018

Andreas Herbert Glas and Michael Eßig

One of the major methods to promote small- and medium-sized enterprises (SMEs) in public procurement is to split tenders into lots. The basic assumption is that SMEs have…

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Abstract

Purpose

One of the major methods to promote small- and medium-sized enterprises (SMEs) in public procurement is to split tenders into lots. The basic assumption is that SMEs have better chances of awarding smaller or more specialized contracts. This paper aims to investigate whether this widely accepted assumption is correct.

Design/methodology/approach

This article examines four hypotheses about the factors that influence SME success in public procurement. The empirical analysis uses real data from 380 contract award files and logistic regression to test the hypotheses.

Findings

The results show that a higher number of lots in a tender does not significantly increase the success rate of SMEs, and other factors, including the type of public procurement procedure, the number of participating companies and the overall tender volume, significantly influence SME success.

Research limitations/implications

There are several implications for theory and practice, including the need to further strengthen the academic evaluation of public procurement policies, the suggestion to implement SME support instruments in public legislation with the utmost caution in practice and the managerial indication that SME competitiveness is more relevant to their success in public bidding than public support policies.

Originality/value

The findings stand in fundamental contrast to the legal regulations, which postulate that lots are the driving force for SME promotion in public procurement. This is also in contrast to public procurement policies that, for many years, have recommended splitting contracts into smaller lots to become SME-friendly.

Details

Supply Chain Management: An International Journal, vol. 23 no. 1
Type: Research Article
ISSN: 1359-8546

Keywords

Article
Publication date: 1 April 2017

Andreas H. Glas, Markus Schaupp and Michael Essig

In the EU and especially in Germany, public procurement is bound to a tight legislation that also sets and enforces strategic goals such as innovation or sustainability…

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Abstract

In the EU and especially in Germany, public procurement is bound to a tight legislation that also sets and enforces strategic goals such as innovation or sustainability. The purpose of this paper is to analyze whether different archetypes of public procurement organizations (centralized or decentralized; state-level or local-level) perceive and implement strategic goals differently. A survey with data from 104 entities is used for this purpose. The findings reveal that the implementation of strategy is different in centralized or state-level organizations compared with decentralized or local organizations. Centralized organizations give goals such as innovation, transparency, and sustainability a high priority, while local ones highlight regional development and SME support

Details

Journal of Public Procurement, vol. 17 no. 4
Type: Research Article
ISSN: 1535-0118

Article
Publication date: 1 March 2012

Florian C. Kleemann, Andreas Glas and Michael Essig

Faced with reduced budgets and rising service expectations, public authorities are increasingly cooperating with private businesses. This paper examines an alternative…

Abstract

Faced with reduced budgets and rising service expectations, public authorities are increasingly cooperating with private businesses. This paper examines an alternative procurement- and service delivery concept, Performance-based Logistics (PBL). It has been introduced by the US and UK armed forces. However, other nations, such as Germany, are still reluctant to follow. This article has two aims: First, to identify the conceptual characteristics of PBL, and second, to analyze potential reasons why although PBL is popular in some nations, others are so reluctant to introduce it. This will be done using a mixed method approach. The concept of PBL will be introduced by deductively developing a conceptual model of PBL using a business model framework. The analysis of PBL application will be performed using an in-depth case study from the German defense sector. This will be framed by a literature review and concluded by managerial recommendations.

Details

Journal of Public Procurement, vol. 12 no. 2
Type: Research Article
ISSN: 1535-0118

Open Access
Article
Publication date: 1 November 2021

Harri Lorentz, Sini Laari, Joanne Meehan, Michael Eßig and Michael Henke

In the context of the COVID-19 pandemic, this study investigates a variety of approaches to supply disruption risk management for achieving effective responses for…

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Abstract

Purpose

In the context of the COVID-19 pandemic, this study investigates a variety of approaches to supply disruption risk management for achieving effective responses for resilience at the supply management subunit level (e.g. category of items). Drawing on the attention-based view of the firm, the authors model the attentional antecedents of supply resilience as (1) attentional perspectives and (2) attentional selection. Attentional perspectives focus on either supply risk sources or supply network recoverability, and both are hypothesised to have a direct positive association with supply resilience. Attentional selection is top down or bottom up when it comes to disruption detection, and these are hypothesised to moderate the association between disruption risk management perspectives and resilience.

Design/methodology/approach

Conducted at the early phases of the COVID-19 pandemic, this study employs a hierarchical regression analysis on a multicountry survey of 190 procurement professionals, each responding from the perspective of their own subunit area of supply responsibility.

Findings

Both attentional disruption risk management perspectives are needed to achieve supply resilience, and neither is superior in terms of achieving supply resilience. Both the efficiency of the top down and exposure to the unexpected with the bottom up are needed – to a balanced degree – for improved supply resilience.

Practical implications

The results encourage firms to purposefully develop their supply risk management practices, first, to include both perspectives and, second, to avoid biases in attentional selection for disruption detection. Ensuring a more balanced approach may allow firms to improve their supply resilience.

Originality/value

The results contribute to the understanding of the microfoundations that underpin firms' operational capabilities for supply risk and disruption management and possible attentional biases.

Details

International Journal of Operations & Production Management, vol. 41 no. 13
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 13 April 2015

Michael Essig, Andreas H. Glas and Josef Gutsmiedl

Given the high importance of information systems for procurement, surprisingly there have been little efforts to analyze the process and the relevant reasons for the…

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Abstract

Purpose

Given the high importance of information systems for procurement, surprisingly there have been little efforts to analyze the process and the relevant reasons for the procurement decision of such systems from a stakeholder perspective. The purpose of this paper is to explore these aspects in the context of low-value (C-)parts.

Design/methodology/approach

Research is based on a case study in a pre-fabricator company in Germany and analyzes the process to procure a system for sourcing low-value parts.

Findings

As a finding, the procurement process and decision attributes have been integrated into a framework which supports corporate decision-making considering the procurement reasons of all involved stakeholders (internal departments, external customers and suppliers).

Research limitations/implications

Research is based on case study analysis. Findings are specific to case companies and the environment in which they operate. The framework should be tested further in different contexts.

Practical implications

The developed decision frame supports the evaluation of different sourcing information systems, including clearly measurable criteria but also qualitative or company-strategic decision attributes.

Originality/value

The combination of financial and other perspectives (operations, information technology (IT)-administration, system users, etc.), is used to evolve a robust ex-ante instrument for supporting buying decisions for procurement information systems. The case description also illustrates the findings and develops new insights about stakeholders and buying groups decision-making for information systems.

Details

Journal of Enterprise Information Management, vol. 28 no. 3
Type: Research Article
ISSN: 1741-0398

Keywords

Article
Publication date: 10 June 2021

Stephen Kelly, Donna Marshall, Helen Walker and John Israilidis

This paper aims to explore the supplier perspective on competitive tendering processes and build on an increasing and developing interest in supplier satisfaction with…

Abstract

Purpose

This paper aims to explore the supplier perspective on competitive tendering processes and build on an increasing and developing interest in supplier satisfaction with public sector procurement activities.

Design/methodology/approach

Qualitative data was collected from 20 interviews with a variety of suppliers to the UK public sector, which was then analysed using Nvivo and a series of empirically supported propositions developed.

Findings

The findings are combined into an integrated supplier satisfaction model, which explains how a multi-layered set of expectations (past and ideal) and quality dimensions (fairness, ambiguity, unnecessary information, tender focus, relationship irrelevance, unresponsiveness, outcome success) lead to dissatisfaction. This paper also establishes the implications of these judgments (non-response, poor quality and relationship impact) and that they are impacted by comparison to alternatives.

Practical implications

Supplier dissatisfaction can have serious ramifications for public sector buying organisations by reducing the pool of applicants, creating relationship barriers and a disconnect between the tender and the eventual services provided. This paper gives empirically derived advice to managers and policymakers on how to avoid these issues.

Social implications

Ensuring that as wide a pool of possible suppliers can respond to tender requests, means that the services that are provided by the public sector can make the most effective and efficient use of available resources. In addition, small to medium-sized enterprises may be encouraged to overcome their feelings of dissatisfaction and respond more frequently and readily to tender requests.

Originality/value

This paper contributes to the field of public sector procurement and in particular that which looks at increasing supplier satisfaction, by developing a supplier satisfaction model based on supplier generated data, which uses disconfirmation theory to explain the dynamics of how individuals make judgments by comparing perceptions of performance with a multi-layered set of expectations. This paper identifies service quality dimensions that influence satisfaction judgments and the implications of these judgments.

Details

Journal of Public Procurement, vol. 21 no. 2
Type: Research Article
ISSN: 1535-0118

Keywords

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