Kostas Selviaridis

Performance-based contracting: a literature review and future research directions

This paper aims to provide a review and synthesis of the performance-based contracting (PBC) literature across academic disciplines. It also seeks to examine how the operations and supply management (OSM) discipline in particular relates to PBC studies in other study fields. The research is based on a systematic literature review of 241 peer-reviewed articles across disciplines, published between 1985 and 2014. A classification framework of PBC research is proposed, addressing key aspects of PBC design and management: performance specification and evaluation, the design of incentives and their impact on supplier behaviour and risks allocation depending also on the risk attitudes of buyers and suppliers. The comparative analysis of literature by discipline helps identify current empirical and theoretical limitations of relevant OSM studies. The paper concludes that future OSM research should expand its theoretical framework and empirical focus to better understand PBC design and management. Eight specific suggestions for future OSM research are offered, e.g. examining the potential of PBC as means for managing sustainability and innovation goals of supply chains. The paper helps advance OSM research in this area by providing a structured overview of definitions, theories, conceptual frames, methods and empirical studies from other disciplines.

Performance-based contracting in service supply chains: a service provider risk perspective

Purpose – The performance of service supply chains in terms of service levels and cost efficiency depends not only on the effort of service providers but also on the inputs of sub-contractors and the customer. In this sense, performance-based contracting (PBC) entails increased financial risk for providers. Allocating and managing risk through contractual relationships along the service supply chain is a critical issue, and yet there is scant empirical evidence regarding what factors influence, and how, provider willingness to bear PBC-induced risk. This paper aims to address this gap. Design/methodology/approach – The paper draws on agency theory and two cases of logistics service supply chains, in the food retail and automotive industries respectively, to identify key influencing factors. Data were collected through semi-structured interviews with 30 managers of providers and sub-contractors and review of 35 documents, notably contracts and target letters. Findings – Four influencing factors were found:...

Theoretical perspectives on information sharing in supply chains:a systematic literature review and conceptual framework

Purpose – The purpose of this paper is to explore what theoretical lenses have been used to analyze and understand information sharing in supply chains. The paper elaborates on the predominant theories and discusses how they can be integrated to research different aspects of information sharing. Design/methodology/approach – The paper carried out a structured literature review by using a combination of selected keywords to search for peer-reviewed articles in ten journals. Findings – The findings suggest that four out of ten reviewed articles explicitly apply one or more theoretical lenses. The predominant theories used include transaction cost economics, contingency theory, resource-based view, resource dependency theory and relational governance theories such as the relational view and social exchange theory. Research limitations/implications – These theories can be applied to analyze different aspects of information sharing. By using the theories in a complementary way, it is possible to increase our u...

Performance-based contracting for advanced logistics services:challenges in its adoption, design and management

Purpose – The purpose of this paper is to explore key challenges of adopting, designing and managing performance-based contracts (PBC) for advanced logistics services, as seen by providers. The shift toward performance-based solutions has proved challenging since providers often struggle to link performance to their payment. Despite such managerial challenges, empirical research in this area has been limited. Design/methodology/approach – A multi-case design was adopted. Three cases of logistics service providers were selected based on purposive sampling. Data were collected through 38 semi-structured interviews and review of 43 documents such as contracts and customer target letters. Findings – Key PBC adoption challenges include customer and provider intention to align their goals and incentives as well as their views on risk and reward sharing. Contract design challenges center around performance metric definition and weighting, designing performance monitoring systems that consider service co-producti...

Exploring information sharing in the extended supply chain: an interdependence perspective

Purpose – This paper aims to empirically explore demand-related information sharing in the extended supply chain. Design/methodology/approach – Through a single, embedded case design, a range of methods are used to collect data from companies representing three different supply chain tiers, including focal company, first-tier suppliers and first-tier customers. The collected data are analysed through the theoretical lens of interdependence. Findings – The findings indicate that the supply chain actors adapt information sharing to the pooled, serial or reciprocal type of interdependence. Information sharing is thus increased with key dyadic partners representing, for example, unique offerings and high market shares as percentage of total expenditure/sales. The study also unearths several barriers to information sharing beyond dyadic ties, including problems related to dis-aggregated, misinterpreted and/or incomplete information. Research limitations/implications – The study empirically contributes to the e...

Reverse resource exchanges in service supply chains: the case of returnable transport packaging

Purpose: The purpose of this paper is to understand how reverse resource exchanges and resource dependencies are managed in the service supply chain (SSC) of returnable transport packaging (RTP). Design/methodology/approach: A single case study was conducted in the context of automotive logistics focusing on the RTP SSC. Data were collected through 16 interviews, primarily with managers of a logistics service provider (LSP) and document analysis of contractual agreements with key customers of the packaging service. Findings: Resource dependencies among actors in the SSC result from the importance of the RTP for the customer’s production processes, the competition among users for RTP and the negative implications of the temporary unavailability of RTP for customers and the LSP (in terms of service performance). Amongst other things, the LSP is dependent on its customers and third-party users (e.g. the customer’s suppliers) for the timely return of package resources. The role of inter-firm integration and collaboration, formal contracts as well as customers’ power and influence over third-party RTP users are stressed as key mechanisms for managing LSP’s resource dependencies. Research limitations/implications: A resource dependence theory (RDT) lens is used to analyse how reverse resource exchanges and associated resource dependencies in SSCs are managed, thus complementing the existing SSC literature emphasising the bi-directionality of resource flows. The study also extends the recent SSC literature stressing the role of contracting by empirically demonstrating how formal contracts can be mobilised to explicate resource dependencies and to specify, and regulate, reverse exchanges in the SSC. Practical implications: The research suggests that logistics providers can effectively manage their resource dependencies and regulate reverse exchanges in the SSC by deploying contractual governance mechanisms and leveraging their customers’ influence over third-party RTP users. Originality/value: The study is novel in its application of RDT, which enhances our understanding of the management of reverse exchanges and resource dependencies in SSCs.