Erik M. van Raaij

Performance outcomes and success factors of vendor managed inventory (VMI)

Purpose – The purpose of this paper is to seek to investigate performance outcomes of vendor managed inventory (VMI) from a buyers perspective and enablers for its successful application.Design/methodology/approach – Structural equation modelling through Partial Least Squares (PLS) is used to identify relationships between four enablers (information systems, information sharing, information quality, and relationship quality), perceived VMI success, and three outcomes (cost reductions, customer service, and supply chain control).Findings – Buyer‐perceived VMI success is impacted by the quality of the buyer‐supplier relationship, the quality of the IT‐system and the intensity of information sharing, but not by the actual quality of the information shared. Furthermore, VMI leads to three performance outcomes: higher customer service levels, improved supply chain control and, to a lesser extent, cost reduction.Research limitations/implications – Although theory stipulates a positive impact of high quality in...

The Implementation of a Market Orientation: A Review and Integration of the Contributions to Date

Purpose - The purpose of this paper is to review the market orientation literature from a managerial perspective and to discuss and integrate the implementation lessons that can be drawn from it. Design/methodology/approach - The paper starts with a review of the managerial implications of the market orientation literature. It then provides an overview of nine implementation approaches. It draws on an integrative model of marketing orientation to organize the implementation lessons from the literature into an actionable approach to implementing a market orientation. Findings - The paper finds that the literature offers a rich, yet fragmented, picture of what market orientation is, and how it can be improved. Research limitations/implications - The paper identifies a conceptual gap in the literature between market orientation and customer value generation and offers a model to bridge this gap that can serve as a guide for future theory development and empirical research. Practical implications - The paper identifies four design enablers and three development enablers that can guide managerial action to improve market orientation and offers practitioners a structured way to go about the implementation of a market orientation. Originality/value - Despite significant advances in the development of market orientation theory, there is still a void in the literature with respect to the implementation of a market orientation. This paper is the first to review the market orientation literature from a managerial perspective, to provide an overview of the implementation approaches published to date, and to integrate the managerial implications of the market orientation literature.

The implementation of customer profitability analysis: A case study

By using customer profitability analysis (CPA), firms can determine the profit contribution of customer segments and/or individual customers. This article presents an approach for the implementation of CPA. The implementation process is illustrated using a case study of a firm producing and selling professional cleaning products. The case study highlights specific issues related to CPA in an industrial setting, and the results provide examples of the possible benefits of implementing a process of regular CPA.

Tools without skills: Exploring the moderating effect of absorptive capacity on the relationship between e‐purchasing tools and category performance

Purpose – The paper examines the moderating role of a purchasing functions absorptive capacity (AC) on the relationship between the use of electronic purchasing tools and category level purchasing performance. The authors argue that an e‐purchasing tool may not in itself positively influence performance unless combined with AC as a human interface to maximise its information and transactional improvement potential.Design/methodology/approach – Survey data collected from 297 procurement executives of large companies in ten countries are analysed using confirmatory factor analysis (CFA) and hierarchical moderated regression.Findings – The results demonstrate few significant direct effects of e‐purchasing tools on category performance. All performance measures studied are enhanced when dimensions of AC and their interactions with the e‐purchasing tools are added. Specifically, buyer competence, manager competence and communications climate have performance‐enhancing effects. In some cases, AC on its own app...

A comprehensive assessment of measurement equivalence in operations management

This paper provides a comprehensive framework for treating equivalence both prior to data collection and during subsequent analyses, and assesses the extent to which equivalence is considered in survey research in six leading empirical Operations Management (OM) journals (Decision Sciences, International Journal of Operations & Production Management, International Journal of Production Research, Journal of Operations Management, Management Science and Production and Operations Management). Measurement equivalence of latent variables in survey data is an important condition that should be met in order to meaningfully pool and/or compare data stemming from apparently heterogeneous sub-groups. We assess 465 survey articles from a six-year period from 2006 to 2011 and document these articles in relation to the four main stages of our comprehensive framework: identifying sources of heterogeneity; maximising equivalence prior to data collection; testing measurement equivalence after data collection; and dealing with partial and non-equivalence. We conclude that pooling of data from heterogeneous sub-groups is common practice in OM, but that awareness and testing of equivalence remains limited. Given these findings, we further elaborate the best practices detected in those few OM studies that do address equivalence in some way. We conclude that to improve the quality of OM survey research, authors, editors and reviewers should pay greater attention to equivalence, and we provide a pragmatic checklist of measurement equivalence issues across the four stages.

Tools without skills

Purpose – The paper examines the moderating role of a purchasing functions absorptive capacity (AC) on the relationship between the use of electronic purchasing tools and category level purchasing performance. The authors argue that an e‐purchasing tool may not in itself positively influence performance unless combined with AC as a human interface to maximise its information and transactional improvement potential.Design/methodology/approach – Survey data collected from 297 procurement executives of large companies in ten countries are analysed using confirmatory factor analysis (CFA) and hierarchical moderated regression.Findings – The results demonstrate few significant direct effects of e‐purchasing tools on category performance. All performance measures studied are enhanced when dimensions of AC and their interactions with the e‐purchasing tools are added. Specifically, buyer competence, manager competence and communications climate have performance‐enhancing effects. In some cases, AC on its own app...

A Comparative Study of Formulas for Choosing the Economically Most Advantageous Tender

Choosing the best bid is a central step in any tendering process. If the award criterion is the economically most advantageous tender (EMAT), this involves scoring bids on price and quality and ranking them. Scores are calculated using a bid evaluation formula that takes as inputs price and quality, and their respective weights. The choice of formula critically affects which bid wins. We study 38 such formulas and discuss several of their aspects, such as how much the outcome of a tender depends on which formula is being used, relative versus absolute scoring, ranking paradox, iso-utility curves, protection against a winner with an extremely high price, and how a formula reflects the weights of price and quality. Based on these analyses, we summarize the (dis)advantages and risks of certain formulas and provide associated warnings when applying certain formulas in practice.

A New Approach to Preferred Provider Selection in Health Care

In January 2015 Zilveren Kruis, the largest health insurer in The Netherlands, engaged in a new three-year, unlimited volume contract with five carefully selected providers of cataract surgery. Zilveren Kruis used a novel method, designed to identify the top expert providers in a certain discipline. This procedure for provider selection uses the principles of Best Value Procurement (BVP), and puts the provider in charge of defining key performance indicators for health care quality. The procedure empowers the professional and acknowledges that the provider, not the purchaser, is the true expert in defining what is high quality care. This new approach focuses purely on provider selection and is thus complementary to innovations in health care reimbursement, such as value-based hospital purchasing or outcome-based financing. We describe this novel approach to preferred provider selection and show how it makes affordable quality the core topic in negotiations with providers.