Jakob Rehme

The risks of providing services: Differential risk effects of the service‐development strategies of customisation, bundling, and range

Purpose – The purpose of this paper is to examine the risks for manufacturing companies of extending their traditional goods offerings by the addition of different kinds of services.Design/methodology/approach – The study develops a conceptual framework of nine propositions (and corresponding diagrammatic representations) of the relationships between: three kinds of risk (operational, strategic, and financial); and three strategies for the provision of added service (customisation, bundling, and broadening the range of offerings). This conceptual framework is examined empirically by qualitative analysis of data gathered in a three‐year longitudinal study of managerial representatives from nine multinational manufacturing firms engaged in the addition of services to their traditional goods offerings.Findings – It was found that eight of the nine propositions are fully supported, and one receives equivocal support. In addition, several contextual factors are identified as moderating influences on the relati...

Vertical integration in supply chains: driving forces and consequences for a manufacturer's downstream integration

Purpose – Strategic concentration is a key issue for manufacturing companies when designing a supply chain. As a corporate strategy and a supply chain governance strategy, vertical integration relates to organisational economics and strategic supply chain management. Numerous explanations have been created for vertical integration, and transaction cost economics (TCE) provides a theoretical basis to help understand the process. However, the current popularity of vertical integration seems inspired by something more than altering industry structure and minimising cost, which are the traditionally accepted explanations for vertical integration This paper aims to explore the driving forces for vertical integration, particularly downstream integration of distribution, and the consequences of vertical integration in a manufacturer‐distributor‐reseller chain.Design/methodology/approach – This study adopted an exploratory case study approach to examine a Swedish‐based timber manufacturer that vertically integrat...

Proactive and reactive: drivers for key account management programmes

Purpose - Key account management (KAM) programmes are a way for companies to develop existing relationships and increase sales, thus being proactive and searching for opportunities (which is often ...

Outsourcing decisions – the case of parallel production

Purpose – The purpose of this paper is to investigate an underexplored aspect of outsourcing involving a mixed strategy in which parallel production is continued in-house at the same time as outsourcing occurs. Design/methodology/approach – The study applied a multiple case study approach and drew on qualitative data collected through in-depth interviews with wood product manufacturing companies. Findings – The paper posits that there should be a variety of mixed strategies between the two governance forms of “make” or “buy.” In order to address how companies should consider the extent to which they outsource, the analysis was structured around two ends of a continuum: in-house dominance or outsourcing dominance. With an in-house-dominant strategy, outsourcing complements an organizations own production to optimize capacity utilization and outsource less cost-efficient production, or is used as a tool to learn how to outsource. With an outsourcing-dominant strategy, in-house production helps maintain complementary competencies and avoids lock-in risk. Research limitations/implications – This paper takes initial steps toward an exploration of different mixed strategies. Additional research is required to understand the costs of different mixed strategies compared with insourcing and outsourcing, and to study parallel production from a supplier viewpoint. Practical implications – This paper suggests that managers should think twice before rushing to a “me too” outsourcing strategy in which in-house capacities are completely closed. It is important to take a dynamic view of outsourcing that maintains a mixed strategy as an option, particularly in situations that involve an underdeveloped supplier market and/or as a way to develop resources over the long term. Originality/value – The concept of combining both “make” and “buy” is not new. However, little if any research has focussed explicitly on exploring the variety of different types of mixed strategies that exist on the continuum between insourcing and outsourcing.

Logistics of low cost country sourcing

Increasing globalisation creates new possibilities for sourcing from low cost countries (LCC), but also comes with a range of logistics challenges and issues to be dealt with. The purpose of this paper is to investigate how logistics and its impacts are considered in LCC sourcing decisions. An exploratory multiple case study of industrial product companies engaged in distant LCC sourcing serves as an empirical base. Findings reveal that firms do not explicitly take logistics into account during LCC sourcing decisions. Even if logistics is considered, it is generally in a reactive way and takes a transactional cost focus. Instead, we propose a framework to proactively consider logistics factors in the early stages of LCC sourcing. This is done through identifying product and supplier related logistics factors and their impact on pre-transaction, transaction and post-transaction elements in the Total Cost of Ownership model.

Managing Supplier Relations with the Balanced Scorecard

As a consequence of increased outsourcing, companies become more and more virtual organisations and dependent upon external sources to reach their strategic objectives. Here, lacking supplier performance or commitment can result in failure of the outsourcing programme that significantly risks the financial results of the outsourcing company. Consequently, when outsourcing it is important to assure that the supplier performs as expected. This study uses a Balanced Scorecard (BSC) perspective for investigating performance measurements in outsourcing. The results illustrate the importance of a process perspective when outsourcing (securing volume, high quality at the right time). Formulating a BSC for a supplier, an outsourcing company could better control/steer the supplier on an output/performance level.

The Role of Logistics in Retailers' Corporate Strategy : A Driver for Growth and Customer Value

This article explores the role of logistics and supply chain management (SCM) in retailers’ corporate strategy and is based on reviewing multiple qualitative case studies of companies in the Swedish food retail sector. The article proposes that the role of logistics for what is referred to in this paper as modern retailers is twofold: to create profitability and to support growth and market expansion. International modern retailers are empirically compared with similar companies in the Swedish market. The dominating Swedish food retailers have taken command in the food supply chain but are primarily concerned with traditional logistics roles in cost cutting. This role is perfectly fine as long as the strategic intent of the companies is focused on market retention and not on geographical expansion and/or new marketing or store concepts. We argue that the success of modern retailers in terms of growth rate, profitability, and market expansion is explained to a large extent by the role of logistics in corporate strategy-when the role for supporting growth and increasing customer value from high-performance supply capabilities is a driver for market expansion. However, in many of our cases the traditional logistics roles of cutting costs and lead-times is still the dominating pattern that limits the possibility of expanding into new markets. Better knowledge of logistics’ role in retail corporate strategy can help companies develop and improve their strategic intent as well as redefine the role of logistics.

Coordinate to enhance third party logistics relationships

This article emphasises the importance of coordination in Third Party Logistics (TPL) and describes how coordination can be managed. This is inspired by Key Account Management (KAM) literature and supported by empirical evidence. Buyers of TPL services currently perceive KAM as focusing on making sales and on negotiating contracts. This article proposes that KAM may have a material impact on TPL relationships and that this function can be developed further, primarily by having a coordination role. The article contains a coordination model based on both internal and external coordination of activities within a dyad, divided into operational, functional, geographic, and development coordination. The model explains how these types of coordination can integrate functions and contents in different alliance phases to build successful TPL relationships.

Sales coordination and structural complexity : A national-international comparison

Purpose - The existing literature on key account management (KAM) has focused more on sales forces and management levels than on their evolution. The purpose of this paper is to explore how sales a ...

Public policy and electrical-grid sector innovation

Purpose – This paper aims to investigate the manner in which technological innovation in the European electrical-grid sector has developed by focusing, in particular, on the effect of public policy ...