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Research Activities

In progress

Contracting in Services Outsourcing Triads: An Optimization Perspective
Cosponsored by ASU’s Center for Services Leadership
Investigators: Mei Li, John Fowler, and Thomas Y. Choi

A service outsourcing triad is composed of three nodes – the service buyer node, the service supplier node and buyer’s end customer node and three links: the buyer-supplier link, the buyer-end customer ink, and the supplier-end customer link. Research shows that omission or mismanagement of any link can lead to deadly consequences for a service buyer firm such as cost overrun, customer defects and even expensive lawsuits. However, little is known about the interdependences among the three links. This research sets out to explore these interdependences and make recommendations on the most efficient contractual terms to manage the service outsourcing triad and maximize the buyer firm’s outsourcing objectives.

Assessing a Supplier’s Innovation Performance
Investigators: Tingting Yan, Kevin Dooley, and Thomas Y. Choi

As a buyer, how do you know which suppliers are likely to provide innovation value to you? The goal of this project is to create a survey tool and key performance indicators that buyers can use to assess a supplier’s innovation potential. Innovation potential will be assessed based on a supplier’s historical performance and their capacity to innovate. We will use literature review and CAPS Research member interviews to identify the most common innovation indicators currently used by industry and academic researchers. Once a draft set of indicators is selected, the project will engage CAPS Research members in two rounds of review and revision, ensuring that the tool developed is practical and has broad stakeholder support.

Supply Management Costing Strategies — Establishing and Achieving Cost Savings Targets
Investigators: Lisa Ellram, Wendy Tate, and Thomas Y. Choi

CAPS research is sponsoring a study to develop an understanding of how companies establish goals for costs savings or reduction in purchasing, and what approaches are the more successful. In the last five years, we have seen the emergence of business analytics and more data availability. Companies may be taking advantage of this changing landscape and are developing new approaches to setting cost saving targets, for both materials (i.e. raw materials, parts, modules, etc.) and services (i.e. backroom, maintenance, legal, etc.). We are investigating the cutting-edge approaches to setting and achieving cost saving goals and targets in multiple categories. We will also offer an assessment of the relative effectiveness of different strategies.

Managing Entrepreneurial Suppliers
Investigators: Stephan M. Wagner, Stefan Kurpjuweit, and Thomas Y. Choi

Buying firms traditionally work with established firms that are characterized as ones with stable financial conditions, well-recognized certifications, and track records of high performance. Conversely, entrepreneurial (start-up or new venture) firms can be flexible, dynamic, and innovative, are seen as incubators for product and market innovation, making them also attractive suppliers. This study focuses on how established firms can identify, leverage, and integrate the capabilities of innovative entrepreneurial suppliers. The goal of this case study-based research is to articulate how best these entrepreneurial suppliers should be managed.

Emerging Procurement Technology Landscape: Data Analytics and Cognitive Analytics
Investigators: Robert B. Handfield, Thomas Y. Choi, and Jaikishen Venkitaraman

As volume of data emerging from the “internet of things” expands, there is a growing opportunity to mine this data. Procurement is entering into a new world fueled and powered by analytics, including the areas of big data, cognitive computing, , real-time information, artificial intelligence, and predictive analytics. With many emerging sources of data and platforms under development, chief procurement officers are often overwhelmed by the number of new applications and are unsure as to how to formulate a technology strategy that will enable the right outcomes and marry them to their business strategy.

This research seeks to explore the different sources of data in the emerging procurement technology landscape, and develop a taxonomy of analytic and cognitive technologies that can be mapped to specific procurement strategic objectives. The report will offer a forecast of the projected technology roadmap of analytic and cognitive approaches relative to the likelihood of adoption in the procurement community, with a set of recommendations for executives to consider in plotting their approach to technology investments.

Supply Base Cyber Security: Understanding Threats and Corresponding Security Practices
Investigators: Mohan Gopalakrishnan, Victor Benjamin, and Gail-Joon Ahn

Cyber security has become one of the most critical issues threatening business and industry. In particular, supply bases are increasingly vulnerable to cyber-based threats due to growing reliance of Internet-enabled systems and technology. However, little is known about what areas of supply base are most vulnerable, which cyber-based threats present the biggest challenges, and what proactive measures can be taken to mitigate risk. This study examines the critical issue of supply base cyber security by gathering information from leading buying companies across a number of industries. Information gathering includes interviews, documents, and observations concerning security and their current security practices and mitigation strategies. Several research questions guide our investigations, including:

  • To what capacity is security currently considered when making supply base decisions? Does a firm’s industry affect perspectives on supply base security?
  • What types of cyber-based threats are there? Could they be detected and prevented ahead of time?
  • What threats cannot be stopped, but risks may be mitigated through recovery management plans? How can such plans be implemented?
  • Can a set of best practices be developed for both generalized and industry-specific contexts?

Understanding these issues can help CPOs make more informed decisions regarding supply base security while fulfilling business needs. This proposal intends to focus on this issue.

The Role of Supply Management in Mergers and Acquisitions: Separation and Integration

Investigators: Kevin Linderman and David Wohler

Firms increasingly engage in mergers and acquisitions (M&A’s) to improve performance and enhance competitiveness. However, M&A’s often end in failure or don’t deliver the intended benefits. In these situations, firms may have made a poor decision to undertake the M&A in the first place or failed to manage the post integration process that involves both separation and integration of various functions. Successful M&A’s require understanding the firms’ supply chains. This research investigates when to include supply chain in making an M&A decision, what supply chain activities they should separate and integrate, and how they should separate and integrate them. We propose to investigate these issues and how these decisions may vary in different situations across different industries. We will identify best practices and propose a framework for how to engage the supply chain in an M&A.

Under consideration

Currency and Procurement

Information for creating an account in Knowledge Central
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About CAPS Research Membership
Are you interested in benchmarking to better understand your industry and move your organization forward? Or sales-free peer-to-pear learning experiences to glean best practices and work through challenges? For this, full access to all our research, and more, consider becoming a member company. For more information about CAPS Research membership:

Contact Rick Boyle >>

Futures Study 2020
Investigators: Thomas Kull, Thomas Y. Choi and Rama Srinivasan

This report addresses the major issues and initiatives the supply management profession can expect five years into the future. Building on past CAPS Research “futures” studies, the results of this study should help supply management professionals understand potential factors that will impact their business models and change expectations for the supply function. Ultimately, the study should give valuable information that supply management professionals can use in discussion with the leadership of their company when developing and deploying supply strategies for the coming years.

Futures Study 2020 video link

Supply Chain Financing: Funding the Supply Chain and the Organization
Investigators: Dale Rogers, Rudolph Leuschner, and Thomas Choi

This report recognizes an opportunity for supply professionals to expand their role into financial issues, as they can significantly alter how relationships with suppliers are managed. The study highlights areas of collaboration, especially involving the corporate finance function and treasury, in addition to suppliers and even customers. Some of the tools presented in this report can bring significant value to the organization because they provide access to liquidity, which is often difficult to access otherwise.

Supply Chain Financing video link

Supply Chain Financing study overview video (long version)

Feasibility Study of Nexus Supplier Index: Identifying and Categorizing Nexus Suppliers through Business Analytics
Investigators: Ben Shao, Michael Shi, and Thomas Choi

Nexus suppliers are a new kind of critical supplier. Their criticality comes from their structural positions in the multi-tiered supply network of a focal buying firm. Nexus suppliers may have a profound impact on a buyer’s performance, due to their network characteristics rather than their internal capabilities or knowledge.

The objective of this feasibility study is to develop and assess a data-driven business analytics model for Nexus Supplier Index (NSI) through which we can identify and categorize nexus suppliers in a focal buying firm’s supply network.

Nexus Suppliers and Analytics video link

Sourcing Cloud-Based Services: Underlying Issues and Strategies
Investigators: Sriram Narayanan, Yu Huang, and Thomas Choi

Despite high awareness of cloud-sourcing, buying firms are still in the process of developing more mature cloud strategies to better leverage the potentials. Procuring cloud-based services is taking on increasing salience for CPO’s today. More firms are considering outsourcing various forms of IT-related activities to suppliers that provide cloud-based services. However, effectiveness in cloud sourcing still remains elusive for many buying firms. This CAPS Research project was commissioned with the intention to better gain insights into strategies and risks of cloud sourcing for procurement managers. As firms are increasingly migrating to the cloud, understanding how the cloud can be leveraged for business growth, while minimizing the risks from pursuing cloud sourcing is critical. To facilitate this process, this report identifies cloud sourcing enablers; risks of cloud sourcing; risk mitigation and contract negotiation and governance issues in cloud sourcing.

Sourcing Cloud-Based Services video link

Learn more about these studies
To learn more about this study, please visit CAPS Research Knowledge Central. Anyone can create an account for free, and access the project overview page, but please note that only CAPS Research member companies’ personnel can access the executive summary, brief and full research study.

Go to Knowledge Central >>

About CAPS Research Membership
Are you interested in benchmarking to better understand your industry and move your organization forward? Or sales-free peer-to-pear learning experiences to glean best practices and work through challenges? For this, full access to all our research, and more, consider becoming a member company. For more information about CAPS Research membership:

Contact Rick Boyle >>

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