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Article
Publication date: 1 February 2001

Michael Quayle

The recent attention to purchasing decisions in a variety of commercial and government contexts has grown much faster than detailed understanding of how sourcing decisions are…

2717

Abstract

The recent attention to purchasing decisions in a variety of commercial and government contexts has grown much faster than detailed understanding of how sourcing decisions are made and their implications for organisations. This paper provides an overview of empirical research into sourcing decisions made in UK and Swiss organisations and will be of international interest to practitioners and academics in both purchasing and marketing. The research demonstrates in both countries that sourcing decisions are highly contingent situations and the variable is policy.

Details

European Business Review, vol. 13 no. 1
Type: Research Article
ISSN: 0955-534X

Keywords

Article
Publication date: 1 July 2006

Anette Brannemo

The objective of this paper is to present how two Swedish companies work, or plan to work, with sourcing decisions. The aim is furthermore to analyze if their decision process, or…

3018

Abstract

Purpose

The objective of this paper is to present how two Swedish companies work, or plan to work, with sourcing decisions. The aim is furthermore to analyze if their decision process, or parts of it, can be used as a base for building a rightsourcing decision model. In this paper rightsourcing is defined as; “the process to actively apply in‐and outsourcing strategically to be competitive now and in the future”.

Design/methodology/approach

Since the business environment is dynamic and the global aspects are increasing, companies tend to focus on what they do best‐their core competence. The concept of outsourcing has, therefore, been growing rapidly during the last decade. Many companies seem to have a vague understanding about the risks and benefits of outsourcing, except from a general idea that it will reduce cost. Many companies hence experience that sourcing decisions are complex and the need for a model supporting sourcing decision exist within many corporations. This is accomplished through a literature overview and a multiple case study.

Findings

The results indicate that a model for sourcing decisions ought to include, or be based on, following aspects, e.g. the companies overall strategy, the companies core competence, both qualitative and quantitative data and risk analysis. The sourcing process also ought to be made with a process approach, avoiding functional sub‐optimization. The results also indicated that financial evaluation and documentation of the decision is important.

Research limitations/implications

The multiple case study was conducted in one mechanical company and one engineering company from Sweden. The fact that the study only included two studies could affect the possibility to generalize the result.

Originality/value

This paper offers help to companies that consider sourcing decisions.

Details

Journal of Manufacturing Technology Management, vol. 17 no. 5
Type: Research Article
ISSN: 1741-038X

Keywords

Open Access
Article
Publication date: 9 February 2024

Thomas Koerber and Holger Schiele

This study aims to examine decision factors for global sourcing, differentiated into transcontinental and continental sourcing to obtain insight into locational aspects of…

Abstract

Purpose

This study aims to examine decision factors for global sourcing, differentiated into transcontinental and continental sourcing to obtain insight into locational aspects of sourcing decisions and global trends. This study analyzed various country perceptions to reveal their influence on sourcing decisions. The country of origin (COO) theory explains why certain country perceptions and images influence purchasing experts in their selection of suppliers.

Design/methodology/approach

This study used a two-study approach. In Study 1, the authors conducted discrete choice card experiments with 71 purchasing experts located in Europe and the USA to examine the importance of essential decision factors for global sourcing. Given the clear evidence that location is a factor in sourcing decisions, in Study 2 the authors investigated purchasers’ perceptions and images of countries, adding country ranking experiments on various perceived characteristics such as quality, price and technology.

Findings

Study 1 provides evidence that the purchasers’ personal relationship with the supplier plays a decisive role in the supplier selection process. While product quality and location impact sourcing decisions, the attraction of the buying company and cultural barriers are less significant. Interestingly, however, these factors seem as important as price to respondents. This implies that a strong relationship with suppliers and good quality products are essential aspects of a reliable and robust supply chain in the post-COVID-19 era. Examining the locational aspect in detail, Study 2 linked the choice card experiments with country ranking experiments. In this study, the authors found that purchasing experts consider that transcontinental countries such as Japan and China offer significant advantages in terms of price and technology. China has enhanced its quality, which is recognizable in the country ranking experiments. Therefore, decisions on global sourcing are not just based on such high-impact factors as price and availability; country perceptions are also influential. Additionally, the significance of the locational aspect could be linked to certain country images of transcontinental suppliers, as the COO theory describes.

Originality/value

The new approach divides global sourcing into transcontinental and European sourcing to evaluate special decision factors and link these factors to the locational aspect of sourcing decisions. To deepen the clear evidence for the locational aspect and investigate the possible influence of country perceptions, the authors applied the COO theory. This approach enabled authors to show the strong influence of country perception on purchasing departments, which is represented by the locational effect. Hence, the success of transcontinental countries relies not only on factors such as their availability but also on the purchasers’ positive perceptions of these countries in terms of technology and price.

Details

Journal of Business & Industrial Marketing, vol. 39 no. 13
Type: Research Article
ISSN: 0885-8624

Keywords

Open Access
Article
Publication date: 26 June 2023

Ricky S. Wong

Despite its significance, research on how attribute framing affects ordering decisions in dual sourcing remains insufficient. Hence, this study investigated the effects of…

Abstract

Purpose

Despite its significance, research on how attribute framing affects ordering decisions in dual sourcing remains insufficient. Hence, this study investigated the effects of attribute framing in a sourcing task involving certain and uncertain qualities of two suppliers and analysed the role of attention with respect to suppliers' information in framing effects.

Design/methodology/approach

The impacts of attribute framing on sourcing decisions were demonstrated in two online between-subject (2 × 2 factorial) experimental studies involving professional samples. Study 2 was an eye-tracking experiment.

Findings

In Study 1 (N = 251), participants presented with a “high-quality” rather than a “low-quality” frame made different sourcing decisions, opting for larger percentage of order(s) from a supplier under the “high-quality” frame. This pattern holds true for suppliers who differ in risk. This finding was replicated in Study 2 (N = 129). Attention asymmetry related to the information on supplier quality contributes to this effect. Attention directed towards information regarding the supplier's quality under a positive frame mediated the relationship between attribute framing and sourcing decisions.

Practical implications

Highlighting the positive attributes of a risky supplier is essential when ordering from the risky supplier is an optimal decision. It is advantageous for suppliers to highlight positive rather than negative attributes when describing the quality of their components against others.

Originality/value

This is the first study to examine the effect of attention on the relationship between attribute framing and dual sourcing. This presents a new behavioural perspective wherein managers' attention to information plays a vital role.

Details

International Journal of Operations & Production Management, vol. 43 no. 13
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 4 January 2022

Chris Ellegaard, Ulla Normann and Nina Lidegaard

The purpose of this paper is to create knowledge on the intuitive global sourcing process applied by small and medium-sized enterprise (SME) managers.

1521

Abstract

Purpose

The purpose of this paper is to create knowledge on the intuitive global sourcing process applied by small and medium-sized enterprise (SME) managers.

Design/methodology/approach

This study reports on qualitative inquiries with experienced sourcing managers from 10 SMEs in the textile industry. The study follows a three-step semi-structured interviewing process, allowing us to gradually unveil the detailed nature of the intuitive supplier selection process.

Findings

Nine of the 10 SMEs rely on a highly intuitive supplier selections process, where one supplier at a time is gradually taken into the exchange while testing the supplier’s behavior. The process consists of an early heuristics sub-process, which gradually switches over to a more advanced intuiting behavioral pattern-matching process.

Practical implications

Most OM/SCM research has treated global sourcing and supplier selection as a highly rational, analytical and deliberate optimization problem. This study uncovers a completely different, and frequently successful, intuitive process, which could inspire managers in companies of all sizes, faced with high uncertainty about global supplier selection decisions.

Originality/value

Intuition has recently been adopted in the global sourcing literature. However, this study is the first to offer detailed insights into a predominantly intuitive global sourcing process, specifically as it is managed by SMEs.

Details

International Journal of Operations & Production Management, vol. 42 no. 2
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 17 December 2019

Martin C. Schleper, Constantin Blome and Alina Stanczyk

The purpose of this paper is to develop taxonomy of sourcing decision-making (SDM) archetypes and explore how different contextual factors influence these archetypes when global…

1069

Abstract

Purpose

The purpose of this paper is to develop taxonomy of sourcing decision-making (SDM) archetypes and explore how different contextual factors influence these archetypes when global sourcing of complex components is considered a viable option.

Design/methodology/approach

A multiple case study approach with five in-depth cases is employed. In total, 19 interviews as well as publicly available and internal data from large buying firms headquartered in Austria and Germany were collected and analyzed.

Findings

The results reveal three different SDM archetypes which are described in detail (i.e. “consensus,” “argumentation” and “cabal”). Furthermore, it is found that these archetypes are mainly influenced by three contextual factors: sourcing maturity, product complexity and leadership style. The final model comprises six propositions which illustrate how these contextual factors determine companies’ SDM archetypes.

Research limitations/implications

The study contributes to theory development at the intersection of organizational buying behavior and the (global) SDM literature. Thereby, it answers the call for more rigorous investigation of the influence of contextual factors on SDM processes.

Practical implications

The findings enable practitioners to better understand and consequently manage SDM processes and their outcomes. By supporting decision-makers in identifying SDM archetypes, this study allows sourcing managers and teams to make better decisions by avoiding problems that occur in situations in which the preferred decision-making type would result in suboptimal decisions.

Originality/value

The study provides a first step toward taxonomy of SDM archetypes and is among the first that explores their underlying contextual factors.

Details

International Journal of Operations & Production Management, vol. 40 no. 2
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 20 November 2009

Frank Ulbrich

Frameworks on information systems‐sourcing (IS‐sourcing) decisions are frequently based on rational‐choice theory, neglecting such non‐quantifiable aspects as interpersonal…

1450

Abstract

Purpose

Frameworks on information systems‐sourcing (IS‐sourcing) decisions are frequently based on rational‐choice theory, neglecting such non‐quantifiable aspects as interpersonal conflicts. The purpose of this paper is to find out whether such interpersonal conflicts have a determining influence on an organization's IS‐sourcing decision.

Design/methodology/approach

An illustrative case‐study strategy is applied.

Findings

The following interpersonal conflicts had a determining influence on an organization's IS‐sourcing decision: tensions between personnel in the IS department and those in the users' departments; lack of capabilities on a personal level; power in and between departments; and face‐saving in the corporate group. Based on these empirical findings, a generic model is developed to illustrate how interpersonal conflicts enmesh with economic, business, and technical factors, and influence IS‐sourcing decisions.

Research limitations/implications

The generic model enables researchers to study IS‐sourcing decisions better. It enriches previous research on IS‐sourcing decisions and alerts researchers that they need to cope with non‐quantifiable aspects that can have an impact on IS‐sourcing decisions.

Practical implications

Once managers understand how interpersonal conflicts can influence an organization's IS‐sourcing decision, they can assess their own organizations more accurately and estimate outcomes of particular IS‐sourcing decisions more realistically. Thus, this paper enables organizations to make better IS‐sourcing decisions, thereby – in the long run – helping them to use IS more effectively in their attempts to improve their business performances and competitive advantages.

Originality/value

This paper extends previous research on IS‐sourcing and fills a gap in traditional frameworks on IS‐sourcing decisions. It illustrates how various types of interpersonal conflicts enmesh with economic, business, and technical factors, and influence IS‐sourcing decisions.

Details

Strategic Outsourcing: An International Journal, vol. 2 no. 3
Type: Research Article
ISSN: 1753-8297

Keywords

Article
Publication date: 17 May 2011

Ala Pazirandeh

Although noticeable improvements have been made in global health in recent years, the distribution is uneven throughout the world and many developing and low-income countries lack…

4029

Abstract

Purpose

Although noticeable improvements have been made in global health in recent years, the distribution is uneven throughout the world and many developing and low-income countries lack access to required medicine and vaccines. Thus, a model to strategically source vaccines for these nations can contribute a great deal. This paper aims to present an extensive review of strategic sourcing literature, and to identify the criteria and available models in making strategic sourcing decisions. The purpose is to develop a decision making framework for future empirical study of humanitarian aid networks, more specifically, sourcing and distribution of vaccines in developing countries.

Design/methodology/approach

A thorough review of several purchasing and supply chain management (SCM) journals was conducted to identify the strategic criteria in making sourcing decisions, hence “strategic sourcing”. In line with this, a number of sourcing strategies were reviewed to find the relevant strategic criteria. Secondary data from practice were also investigated for special characteristics of vaccine supply chains in humanitarian aid networks. Articles were then scrutinized and results categorized in order to develop a framework for future empirical studies.

Findings

The findings show the historical development of strategic sourcing and the criteria in making strategic sourcing decisions. More recent studies, while taking a look back in history, have revealed a mix of strategies for more flexible models. Quality has been noted to be a strategic criterion for sourcing vaccines and this has caused the supply market to be dispersed on a global scale.

Research limitations/implications

Considering the extensive number of academic publications, due to the focus of this study being sourcing within humanitarian aid networks, a number of academic journals in logistics/SCM/sourcing were reviewed.

Originality/value

A decision making framework is presented for sourcing vaccines within the humanitarian sector. The criteria in making strategic sourcing decisions are further re-evaluated and a base model proposed. The framework will be used for further research on sourcing in the humanitarian aid sector as well as practical implications.

Details

International Journal of Physical Distribution & Logistics Management, vol. 41 no. 4
Type: Research Article
ISSN: 0960-0035

Keywords

Article
Publication date: 26 January 2010

Timothy G. Hawkins, Michael J. Gravier and C. Michael Wittmann

The purpose of this paper is to explore how a sourcing professional arrives at a decision to use an electronic reverse auction (eRA) to source a particular requirement by…

2182

Abstract

Purpose

The purpose of this paper is to explore how a sourcing professional arrives at a decision to use an electronic reverse auction (eRA) to source a particular requirement by examining eRA appropriateness.

Design/methodology/approach

Past eRA research findings are synthesized into a summary table. From a comprehensive review of the literature, theories of technology adoption, social influence, referent‐dependence theory, and planned behaviour are discussed and synthesized into a model that explains the antecedents of eRA appropriateness. A case study methodology using structured interviews resulted in a refined model that sheds light on some of the controversial findings regarding electronic reverse auction appropriateness.

Findings

Expected savings, buyer confidence, and prior eRA sourcing satisfaction are identified as new constructs that help explain the decision to source via eRAs. Additionally, perceived eRA appropriateness is proposed as a new construct that mediates the influence of external, strategy factors on the decision to source via eRAs.

Research limitations/implications

Recent literature suggests that the benefits of reverse auctions are overstated and reverse auctions constitute a fundamentally coercive use of buyer power. Reconciling the conflicting supplier perceptions of reverse auctions as use of coercive power with buyer perceptions of cost savings requires an explanation for the factors that lead to the decision to source via eRAs.

Practical implications

The modern competitive supply chain environment entices businesses to explore all avenues for cost savings. Explaining the drivers of reverse auction use illuminates the advantages and pitfalls of reverse auctions as a strategic sourcing venue.

Originality/value

From an extensive review of the eRA literature and eight case studies, the authors propose a model that integrates and extends previous eRA research. Key insights from the model are the mediating effect of perceived eRA appropriateness and the integration of individual level variables with the strategic decision to source via eRA. Additionally, a table is provided summarizing the findings from relevant eRA research that reveals key insights into the phenomenon.

Details

Supply Chain Management: An International Journal, vol. 15 no. 1
Type: Research Article
ISSN: 1359-8546

Keywords

Article
Publication date: 29 June 2010

David D. Dobrzykowski, Oanh Tran and Monideepa Tarafdar

The purpose of this paper is to develop and illustrate a theoretically grounded framework capable of strategic guidance in making sourcing decisions.

2564

Abstract

Purpose

The purpose of this paper is to develop and illustrate a theoretically grounded framework capable of strategic guidance in making sourcing decisions.

Design/methodology/approach

Based on literature review and secondary data from the US operation of 7‐Eleven, a large international retailer, this study develops and supports a framework for understanding and undertaking business process sourcing decisions. The framework considers internal core competencies, as well as the role of external actors in value creation, in analyzing sourcing decisions for business processes.

Findings

Case analysis reveals that a firm's successful sourcing decisions can be explained by resource based view (RBV) and value co‐creation theories. RBV is shown to provide an internal view of the firm considering its core competencies, while value co‐creation illuminates the external perspective considering the role of customers when making sourcing decisions. Further, these theories can be decomposed and simplified, thereby providing scholars with new theoretical insights for this phenomenon and practitioners with a decision‐making tool for undertaking sourcing decisions.

Originality/value

This paper explains in granular detail how effective outsourcing decisions can be made. It employs a rarely considered perspective by combining nascent literature from the value co‐creation stream with established beliefs about RBV core competencies to make three contributions. First, it shows how sourcing decisions can be explained not only by the RBV perspective but also by the value co‐creation view. Second, in considering the role of value co‐creation with the customer, it introduces the perspective of the customer as a decision‐making consideration for sourcing. Third, it provides practitioners with a sourcing decision‐making tool.

Details

Strategic Outsourcing: An International Journal, vol. 3 no. 2
Type: Research Article
ISSN: 1753-8297

Keywords

1 – 10 of over 18000