Stephan M. Wagner

Buyer-Supplier Collaboration in Product Development Projects

Previous research on supplier involvement in product development projects has produced contradictory results, with some studies showing a positive relationship, others no relationship, and still others a negative relationship between supplier involvement and project performance. Drawing on data from 124 managers, project leaders, buyer members, and supplier members pertaining to 28 product development projects, the authors find that buyer-supplier collaboration positively relates to product quality, adherence to product cost targets, adherence to development budgets, and adherence to development schedules. Furthermore, their analyses show that communication frequency and intensity has a curvilinear (inverted U-shaped) relationship with project development budget and product cost.

Supplier development practices: an exploratory study

Purpose – Seeks to provide a more differentiated view of supplier development activities currently applied by European firms.Design/methodology/approach – An exploratory empirical study was conducted based on a review of previously published research on supplier development and case studies with 12 industrial firms. The survey responses from 173 firms were factor‐analyzed to explore various dimensions of supplier development and their interrelationships. Furthermore, an industry‐level analysis was performed.Findings – Firms are reluctant to develop suppliers. Two dimensions of direct and four dimensions of indirect supplier development were observed. Providing human and capital support to suppliers (i.e. two dimensions of direct supplier development) is strongly related to formal supplier evaluation, structures and processes for evaluating suppliers as well as communication (i.e. three dimensions of indirect supplier development).Research limitations/implications – Future studies should incorporate the pe...

Research Opportunities in Purchasing and Supply Management

Purchasing and supply management (PSM) are crucial for the effective and efficient operation of manufacturing firms, now more than ever. The PSM function has evolved from being routine and mechanical to a function that can deliver true competitive advantage. The trend toward increased globalisation and outsourcing, along with a focus on innovation- and capability-driven supply management, has led to an increased reliance on suppliers. This has significantly enhanced the importance of PSM for manufacturing companies. The heightened significance in practice has been paralleled by an increasing attention of researchers in developing theories and chronicling best practices. At the same time, the rapid rate of change represents both daunting challenges and exciting opportunities for research in PSM. It is the goal of this article to highlight such challenges and discuss ensuing opportunities in PSM research. This objective is accomplished via the nominal group technique involving a panel of leading scholars in the purchasing and supply management field. As such, the article presents a synthesis and discussion of important research themes, poses a set of intriguing research opportunities, and serves as a motivation for future investigation.

Supplier development: communication approaches, activities and goals

Operations managers rely on the purchasing function to obtain production inputs from suppliers and to ensure supplier performance. The link between supplier development activities performed by buying firms with their suppliers, in terms of operational outcomes and impact on competitive advantage for the buying firm has been well documented. However, a buying firm should, prior to setting up a supplier development program and investing in supplier development activities, establish goals it wants to achieve and determine how to achieve these goals. Until now, supplier development goals in general and their relationship with supplier development activities have received little research attention. The results from this empirical study suggest that the relationship between the goal to improve a suppliers capabilities and knowledge transfer from the buyer to the supplier firm is moderated by the degree of human interaction. Buying firms pursuing the strategy to improve supplier capabilities rely more intensively on training and co-location of buyer and supplier employees to leverage the knowledge transfer to the supplier firm.

Supplier default dependencies: Empirical evidence from the automotive industry

Common ways to mitigate the detrimental consequences of supplier bankruptcies are to install redundancy and to pursue a multiple-sourcing strategy. This is based on the assumption that the adverse event of one supplier going out of business is largely independent from the default of other suppliers. However, this implicit assumption does not hold in all cases. This study - based on empirical data from automotive suppliers - reveals that default dependencies among suppliers do often exist and can have significant consequences. We use copula functions, a method of representing joint distribution functions with particular marginals, to capture the default dependence between automotive suppliers and to simulate various default dependence scenarios. We also conduct a comparative static analysis illustrating the significant impact of default correlation in a supplier portfolio. Our findings should spur managers to analyze their supplier portfolios with respect to default dependencies, and to take this phenomenon into consideration when making sourcing decisions.

Supplier switching decisions

Abstract In order to maximize profit, a buying firm should continuously search for and access sources which offer more favorable prices. While the literature is replete with works on the formation and development of buyer–supplier relationships, there is surprisingly only scarce research on the termination of such relationships and supplier switching. Using the concept of switching costs in a principal-agent framework, we at first analyze whether a firm switches the entire or a partial quantity to an alternative supplier when there is either symmetric or asymmetric information about the alternative supplier’s cost structure. Information asymmetry results in inert supplier switching decisions. Subsequently, we extend our model and take competitive reactions of the incumbent supplier and economies of scale effects into consideration. We find conditions under which ‘no’, ‘partial’ and ‘complete’ switching occurs, which depend on the buying firm’s beliefs about the alternative supplier’s unit costs, switching costs, the price offered by the incumbent supplier, and refinements of the price offered by the incumbent supplier due to competitive reactions and economies of scale. Broader implications for supplier relationship management and sourcing strategy decisions are also provided.

A comparison of supply chain vulnerability indices for different categories of firms

Given the high vulnerability of todays supply chains to disruptions, measuring and managing supply chain vulnerability has become critical. In the attempt to support practice in reducing supply chain vulnerability, we (1) discuss and define the concept of supply chain vulnerability and (2) measure and compare supply chain vulnerability for various categories of firms. Normal Accident Theory and High Reliability Theory provide the theoretical foundations for the empirical study, and graph modelling is the method used to construct a measure for supply chain vulnerability. The empirical data largely confirm that there is a negative relationship between supply chain vulnerability and supply chain performance, a positive relationship between structural categories (firm size and production type) and supply chain vulnerability, and a positive relationship between supply chain vulnerability and managerial categories (logistics importance, supply chain risk planning, and supply chain risk management).

Multiple Informant Methodology: A Critical Review and Recommendations

The value of multiple informant methodology for improving the validity in determining organizational properties has been increasingly recognized. However, the majority of empirical research still relies on single (key) informants. This is partly due to the lack of comprehensive methodological narratives and precise recommendations on the application of this important methodology. Therefore, the authors have developed a critical review and derived clear recommendations for the key challenges that researchers face in using multiple informants: (1) Which and how many informants should be considered? (2) How should the consensus among the informants be judged? (3) How are multiple responses combined into a single, organizational response to conduct further data analyses?

Supplier development or supplier switching

We study a firms cost-based sourcing decision of whether to invest in an incumbent supplier or switch to an alternative supplier in order to realise lower purchasing costs. In isolation, it can be shown that the development of an incumbent supplier (i.e., a cooperative investment) becomes more attractive, the higher the uncertainty about the price the buying firm can realise on the market and the incumbent suppliers cost. Likewise, switching to an alternative supplier becomes more attractive, the higher the expected value of and the uncertainty about the buying firms market price. For comparing these two sourcing strategies simultaneously we provide a profit-maximising framework for the buying firm that shows that switching is less recommendable the higher the variance of the incumbents cost and if the uncertain maximum demand is negatively correlated with the uncertain incumbent suppliers cost. Overall, our study substantially expands the frequently followed approach of basing supplier development versus supplier switching decisions merely on strategic and qualitative considerations.

Supplier development for sustainability: contextual barriers in global supply chains

Purpose – The purpose of this paper is to explore contextual barriers to supplier development for sustainability (SDS) in global supply chains and managerial remedies to mitigate such barriers. Design/methodology/approach – A dyadic case study design was adopted with a Western European buyer and six of its Chinese suppliers. The database consists of 41 interviews and 81 documents. Findings – Contextual barriers to SDS in global supply chains derive from complexities in the sustainability concept, socio-economic differences, spatial and linguistic distance, as well as cultural differences between buyers and suppliers. Partial remedies include effective joint communications, an open organizational culture, and the fostering of cross-contextual understanding. Research limitations/implications – The findings contribute to theory development at the intersection of sustainable and global supply chain management research. They help to explain why scarce sustainability-related progress in global supply chains has...