Intuitive global sourcing – a study of supplier selection decisions by apparel SMEs

PurposeThe purpose of this paper is to create knowledge on the intuitive global sourcing process applied by small and medium-sized enterprise (SME) managers.Design/methodology/approachThis study reports on qualitative inquiries with experienced sourcing managers from 10 SMEs in the textile industry. The study follows a three-step semi-structured interviewing process, allowing us to gradually unveil the detailed nature of the intuitive supplier selection process.FindingsNine of the 10 SMEs rely on a highly intuitive supplier selections process, where one supplier at a time is gradually taken into the exchange while testing the supplier’s behavior. The process consists of an early heuristics sub-process, which gradually switches over to a more advanced intuiting behavioral pattern-matching process.Practical implicationsMost OM/SCM research has treated global sourcing and supplier selection as a highly rational, analytical and deliberate optimization problem. This study uncovers a completely different, and frequently successful, intuitive process, which could inspire managers in companies of all sizes, faced with high uncertainty about global supplier selection decisions.Originality/valueIntuition has recently been adopted in the global sourcing literature. However, this study is the first to offer detailed insights into a predominantly intuitive global sourcing process, specifically as it is managed by SMEs.

Modern mediators: intermediaries’ informational roles in sourcing from China

Purpose Sourcing intermediaries, commonly known as agents or trading companies, represent a useful organisational solution for assisting companies to manage supply risks and to overcome the liability of foreignness. However, the landscape of global business is experiencing rapid and fundamental changes, which leads us to ask whether intermediaries will continue to play a role in global sourcing. This paper aims to understand how sourcing intermediaries ensure a lasting position in the changing setting of global sourcing and information sharing. Design/methodology/approach This paper investigates the operations of both Chinese and Nordic (Finnish and Swedish) intermediaries in sourcing from China by analysing qualitative data collected over a period of four years. Findings Through the lens of information asymmetry, this paper identifies four distinct informational roles that are used by intermediaries to reduce information asymmetry between suppliers and buyers located in different countries. The paper also examines intermediaries’ signalling activities under these roles in a cross-border triad. Originality/value The paper contributes to the scientific debate on the usefulness of intermediaries by underlining intermediaries’ informational advantage, which provides a new explanation for the survival of intermediaries in a rapidly changing business context. Additionally, this study contributes to research on intermediation strategies by empirically examining both Chinese and Western intermediaries, highlighting the importance of institutional contexts in affecting intermediaries’ informational roles.

Value Analysis and Value Engineering on the Sustainability of Global Sourcing Competitiveness

In this research, the sustainability and global sourcing competitiveness of international cruise ships is studied. The sustainability and competitiveness is just like two sides of a coin. On one hand, reducing the pollution and raw material waste is not only to protect our precious nature resources, but also to bring the cost down. On the other hand, a good global sourcing decision could deliver the cost saving and also keep the cruise ship industry towards the sustainable way. Therefore, in order to reach the goals of sustainability and competitiveness, the cruise ships may apply the current common practice of value analysis and value engineering to identify the possible global sourcing opportunity. This short exploratory paper outlines some of the characteristics of value analysis and value engineering, as illustrated by sustainability of global sourcing competitiveness. Eventually, the discussion of this paper provides some implications for international cruise ship companies. JEL classification numbers: F16, F60, Q23. Keywords: Value Analysis, Value Engineering, Sustainability, Global Sourcing.

Is COVID-19 a turning point in stopping global sourcing? Differentiating between declining continental and increasing transcontinental sourcing

Purpose This research aims to investigate the impact of the current COVID-19 pandemic (C19, Corona) on trends of transcontinental sourcing as an extreme form of global sourcing. This study starts by observing that the sideward movement of international trade in the past decade can be differentiated into an increase in transcontinental sourcing and a relative decline of intra-EU sourcing. By differentiating between continental and transcontinental sourcing, this study gains insights into global sourcing trends and conducts a fine-grained analysis of the impact of COVID-19. Design/methodology/approach After analysing Eurostat statistics, the authors conducted 21 semi-structured interviews with companies from multiple industry sectors affected by a high share of transcontinental suppliers. Using the Gioia method, data from the interviews were structured. By examining the identified motives, challenges and solutions, the authors analyse the impact of COVID-19 on transcontinental sourcing. Findings The COVID-19 pandemic seems not to represent a turning point stopping global sourcing. The authors did not find evidence for a trend reversal. Most of the interviewed companies share the opinion that transcontinental sourcing will remain important or slightly increase in the future. Based on the analysis of their specific motives for transcontinental sourcing, it became clear that factors supportive as well as detrimental to transcontinental sourcing are levelling each other out. Originality/value To the best of the authors’ knowledge, this is the first study explicitly differentiating between continental and transcontinental sourcing as different types of global sourcing. While in European sourcing, a decreasing trend is already evident, as shown by our data analysis, there is a lack of investigations addressing transcontinental sourcing. In this study, the authors concentrated on motives, challenges and solutions of transcontinental sourcing. Extending beyond the immediate COVID-19 impact assessment, findings suggest that purchasing would benefit from treating transcontinental, remote sourcing as a distinct process from continental sourcing, particularly intra-EU-sourcing.

Impacts of big data analytics management capabilities and supply chain integration on global sourcing: a survey on firm performance

Purpose This study aims to show that management with big data analytics capability can achieve more advantages of the global sourcing process. Furthermore, this study using its conceptual attitude model aims to show that big data analytics management capability leads to an increase in firm performance by the mediating role of integration. Design/methodology/approach Using an online questionnaire, 158 managers from 13 Iranian companies taking advantage of the global sourcing process were surveyed. The validity of the hypotheses was evaluated using partial least squares based on structural equation modeling (PLS method). Findings The results of the study showed that big data analytics management capability has a positive impact on global sourcing and firm performance directly, and by the mediating role of integration. Originality/value Previous studies have carefully addressed the role of big data and big data analytics in firms. However, this is among a few studies addressing the role of big data analytics capability, especially management capability, in improving firms’ performance. The results of this study shed light on the fact that how global sourcing takes the best advantage of big data analytics management capability for better accomplishment of organizations’ duties. The results of this study also disclose how big data analytics management capability helps organizations with their performance and bring benefits to their units.

Integration of the buyer–supplier interface for Global sourcing

While global sourcing often implies that the firm needs to, for example, redesign the procurement organization and make decisions on what to centralize and what to manage locally, global sourcing also has direct implications for management of the buyer–supplier interface. This study takes an organization design focus and addresses global sourcing organization design as well as provides illustrations on how to integrate the buyer–supplier interface for global sourcing. Integration is conceptualized as coordination and cooperation. The paper is based on an embedded unit case study of a global technical industrial product and service systems provider, TechInd (pseudonym). Data was collected from TechInd as well as from six of its suppliers. The findings indicate that the global sourcing organization structure, as well as the differences in the buyer’s sourcing and supplier’s sales organizations, pose requirements for management of the interface in terms of coordination and cooperation. Challenges arising particularly due to differences in geographical scope and level of centralization can be managed by introducing the key account role and alignment of incentives.