Michael Essig

Conceptual Framework of Supply Chain Safety

In today’s world, companies cannot afford to act on their own. According to a study conducted by AMR Research in 2006 the average company has 36 contract manufacturers. Out of this, 42 % of these companies report that more than 25 % of manufacturing output is produced by third-party contract manufacturers. Thus, it is evident from the study that outsourcing-related activities (predominantly concerning the functional areas of information technology, production, and logistics) not only result in a higher number of companies involved in the supply chain – this in turn explains the fact that the length and the depth of a supply chain have increased manifold. In addition, companies manage today more than five different supply chains because of the requirement to produce multiple products for multiple markets – supply chains can thus be characterized as networks. By consequence, companies experience a stronger mutual dependence on each other – the whole supply chain becomes more vulnerable to disruptions.

Designing a public procurement strategy: lessons from local governments

Public sector procurement faces competing priorities, such as cost-efficiency, legal conformity, the advancement of environmental protection and the promotion of innovation. In addition, procurement departments are moving away from being mere organizational servants to having a strategic function. This paper looks at current public procurement strategy research, revealing neglected aspects. The authors propose a new analytical framework and suggest avenues for future research.

Missing performance management and measurement aspects in performance-based contracting: A systematic process-based literature analysis of an astonishing research gap

Purpose Performance-based contracting (PBC) is a business model for the adaptive and innovative delivery of product-service systems. In PBC, the provider is paid according to the service performance with the aim of providing monetary incentives to safeguard possible outcomes as much as possible for the PBC customer. Performance measurement and its management are crucial for PBC success and, in particular, for the pay-for-performance link. However, the literature on PBC performance management is rather sparse, and there has been no systematic review on the topic. Thus, the purpose of this paper is to fill that gap and to present a comprehensive and systematic review of performance measurement and management in the PBC context. Design/methodology/approach The paper builds on a literature review based on a sample of 102 subject-relevant articles from academic journals. The content analysis follows a two-step procedure. First, the articles are coded following a process-based research framework. Second, the content of each process step is assessed in a qualitative text analysis. Findings The results show a surprising scarcity of papers that explicitly address performance management topics in the context of PBC. Only the topics of performance specification and performance indicators are broadly addressed, whereas in all of the other areas, e.g., strategic alignment, data capture and reporting, only limited specific findings could be found. Research limitations/implications The paper concludes that future research on performance management in PBC should expand its theoretical framework and empirical efforts in four specific proposed directions. Originality/value The paper provides an up-to-date review that is focused on performance management and measurement in the emerging context of PBC.

An organizational perspective on the implementation of strategic goals in public procurement

In the EU and especially in Germany, public procurement is bound to a tight legislation that also sets and enforces strategic goals such as innovation or sustainability. The purpose of this paper is to analyze whether different archetypes of public procurement organizations (centralized or decentralized; state-level or local-level) perceive and implement strategic goals differently. A survey with data from 104 entities is used for this purpose. The findings reveal that the implementation of strategy is different in centralized or state-level organizations compared with decentralized or local organizations. Centralized organizations give goals such as innovation, transparency, and sustainability a high priority, while local ones highlight regional development and SME support

Procurement of a supply information system: Lessons learned from the purchase of an inventory management system for C-parts

Purpose – Given the high importance of information systems for procurement, surprisingly there have been little efforts to analyze the process and the relevant reasons for the procurement decision of such systems from a stakeholder perspective. The purpose of this paper is to explore these aspects in the context of low-value (C-)parts. Design/methodology/approach – Research is based on a case study in a pre-fabricator company in Germany and analyzes the process to procure a system for sourcing low-value parts. Findings – As a finding, the procurement process and decision attributes have been integrated into a framework which supports corporate decision-making considering the procurement reasons of all involved stakeholders (internal departments, external customers and suppliers). Research limitations/implications – Research is based on case study analysis. Findings are specific to case companies and the environment in which they operate. The framework should be tested further in different contexts. Practi...

A COST INCREASE ANALYSIS OF WEAPON SYSTEMS USING THE PAACHE INDEX: CASES FROM THE GERMAN BUNDESWEHR

Abstract The media and the public often make claims regarding the excessive cost increases in the development and production of major weapon systems such as fighter planes, submarines or tanks. The purpose of this research is in assessing the cost increase of such weapon systems during their procurement periods with the help of the Paasche price index. In contrast to other approaches, which focus upon either the specific situations of single weapon systems or cost increases relative to planned budgets, we compare several projects of military services and their cost increases over time to reveal generalisable trends. For this purpose, we used a framework model that allows for performance and cost comparisons. This paper primarily emphasises the cost perspective by calculating a Paasche index for each chosen project. As a background case for our analysis, we have used the acquisition projects for major weapon systems in Germany. However, the framework model that this study employs is universally applicable. In contrast to the public perception of cost increases, we could not find any clear trend that would indicate that modern weapon systems have a significantly higher (or lower) cost increase than was the case for projects several decades before. To give brief insight into the empirical findings, the cost increase ratios of the Starfighter and Eurofighter jets have the same level, while cost increase ratios of other weapon systems (APC tanks, submarines) differ significantly (to the worse and to the better) over time. Our findings imply that there is no general trend that today the costs for weapon systems increase more/less than some decades ago. This paper calculates data only from the regarded seven cases therefore we could not question the causes for this observation on basis of our sample. However, it appears that, within a specific service or a specific vehicle type (tank, fighter jet, ship/boat), cost increases may be similar over time.

Public procurement through performance-based logistics: Conceptual underpinnings and empirical insights

Faced with reduced budgets and rising service expectations, public authorities are increasingly cooperating with private businesses. This paper examines an alternative procurement- and service delivery concept, Performance-based Logistics (PBL). It has been introduced by the US and UK armed forces. However, other nations, such as Germany, are still reluctant to follow. This article has two aims: First, to identify the conceptual characteristics of PBL, and second, to analyze potential reasons why although PBL is popular in some nations, others are so reluctant to introduce it. This will be done using a mixed method approach. The concept of PBL will be introduced by deductively developing a conceptual model of PBL using a business model framework. The analysis of PBL application will be performed using an in-depth case study from the German defense sector. This will be framed by a literature review and concluded by managerial recommendations.

Defense Management Research Capacities and Topics: Blind Spots in Defense Acquisition Management?

The financial crisis has put a strain on defense budgets worldwide and in particular across the 28 European Union (EU) member states. As public debts are likely to remain high, further cost-cutting measures are to be introduced in many EU member states to cope with the ongoing financial pressure. Cost-cutting measures seem to be appropriate in peacetime because the military must be cost efficient, but modern forces should be prepared for an unexpected crisis and mobilization, in which cost performance and cost effectiveness are all that matters. The need to efficiently and effectively allocate resources implies the importance of economic considerations in the field of defense management.

Targets and Components of Supply Chain Safety Management: Structure of the Book

Based on the introductory chapter, five elements can be distinguished that are all part of the concept of SCSM. First at all (1), since various concepts already exist in the literature, the necessity of developing a new concept for the management of risk and uncertainty factors in company spanning supply chains has to be emphasized. Then (2), risk and uncertainty factors threatening a supply chain’s safety have to be identified and analyzed. Following this, adequate action measures have to be taken: Preventive action measures aim at eliminating the source of risk and uncertainty factors and therefore make contribution to a supply chain’s protection (3). Reactive action measures, by contrast, aim at minimizing the detrimental impact resulting from risk and uncertainty factors that already have occurred and therefore make contribution to a supply chain’s resilience (4). Finally, a management process has to be implemented enabling a supply chain to improve it’s overall preparedness (5).