Global sourcing strategy and structure: towards a conceptual framework

Intuitive global sourcing – a study of supplier selection decisions by apparel SMEs

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.

Disruptions in sourcing and distribution practices of supply chains due to COVID-19 pandemic: a sustainability paradigm

Purpose

The present research paper is an attempt to study how COVID-19 can affect the global sourcing practices of various supply chain intermediaries across the demand chain. This study aims to explore and is an attempt to understand the overall impact of COVID-19 on the sustainable operations of the firm such as sourcing, procurement, economic performance, social responsibility, consumption and distributions.

Design/methodology/approach

This study uses a quantitative technique using data collected from 708 respondents. Structural equation modeling (SEM) has been applied to test the proposed model and hypothesis.

Findings

The findings of the study suggest that sourcing practices, distribution and sustainability considerations of manufacturers, suppliers, distributors and retailers are affected by COVID-19 to a great extent but the pandemic has also led to making supply chain intermediaries understand the changing dynamics of the business scenario which can help them in their own strategic and business evolution.

Research limitations/implications

The current disruptions throughout global delivery chains caused by COVID-19 affect badly, the already poor-performing supply chains. Hence, the present study provides fresh insight on how organizations can limit the ill effects of COVID-19 by safeguarding some of their key sustainable operations in a post-pandemic business scenario.

Originality/value

The present study takes into consideration how core supply functions such as sourcing, distribution and manufacturing and various sustainable operations are disrupted by pandemic and its after-effects. This knowledge base can help business organizations to mitigate such problems/disruptions in the future.

Integration of the buyer–supplier interface for Global sourcing

While global sourcing often implies that the firm needs to, for example, redesign the procurement organization and make decisions on what to centralize and what to manage locally, global sourcing also has direct implications for management of the buyer–supplier interface. This study takes an organization design focus and addresses global sourcing organization design as well as provides illustrations on how to integrate the buyer–supplier interface for global sourcing. Integration is conceptualized as coordination and cooperation. The paper is based on an embedded unit case study of a global technical industrial product and service systems provider, TechInd (pseudonym). Data was collected from TechInd as well as from six of its suppliers. The findings indicate that the global sourcing organization structure, as well as the differences in the buyer’s sourcing and supplier’s sales organizations, pose requirements for management of the interface in terms of coordination and cooperation. Challenges arising particularly due to differences in geographical scope and level of centralization can be managed by introducing the key account role and alignment of incentives.

Archetypes of sourcing decision-making

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.

Achieving supply chain excellence through supplier management

Purpose

The purpose of this paper is to develop a supplier selection and management program to improve overall supplier performance.

Design/methodology/approach

Supplier performance is measured in terms of quality and delivery within a fast moving consumer goods (FMCG) business of a multinational company based in Thailand using a case study methodology. The quality and delivery related data were collected from daily deliveries at the manufacturing plant both before and after implementing the supplier management program.

Findings

Findings of the study suggest that the selection of suppliers based on their performance is important for manufacturing firms. Moreover, the supplier selection and management program can contribute effectively to improving suppliers’ performance.

Research limitations/implications

This case study has been conducted based on a single company within the FMCG industry. Hence, it limits the generalizability of the findings across industries.

Practical implications

The study provides a real-life tool for practitioners to learn about the importance of strategic decision-making process pertaining to the supplier selection and management program.

Social implications

This study demonstrates that through a transparent supplier evaluation process, the firms can develop trust and long-term relationship with their suppliers for pursuing the goals of product development and innovation.

Originality/value

Implementing a supplier management system is a critical step in enhancing an organization’s overall competitiveness. To develop an effective supplier management system firms must have objective measures and share those with their suppliers. Developing metrics for suppliers’ evaluation is the key to achieving continuous improvement as evidenced in this case.